What is in lieu days and how to implement them in your business?

8 of February, 2021

Time in Lieu is a simple but potentially more complex principle mostly found in UK-US working environments. It is a significant indicator of the way the modern working day is organised that lieu days and Time in Lieu are becoming fundamental concepts. Indeed, with remote working becoming a more and more sought after solution, the requirement to understand how Time in Lieu works, how to monitor it properly and how to allocate in lieu days is more and more important.

Time in Lieu, used effectively, can be a fantastic tool for any budding employer who needs employees working overtime some days for an upcoming project and then can afford them to be absent during less busy periods. With an app that can track your employee’s time at work this becomes much more easier to manage.

What is Time Off In Lieu and in lieu days?

Time Off In Lieu or “TOIL” refers to the expression “In Lieu” which means “instead of”. Basically Time Off In Lieu allows you to compensate extra hours of work done with time off rather than more income. Extra hours were traditionally marked up as being allocated as overtime pay. If you worked overtime, a certain percentage of the hourly rate as a worker would increase. This can be costly for the company though, and sometimes employees would rather simply have more time than more money. For example, they could work overtime one day to be able to take the next one off as it suits their schedule better. This is where Time Off In Lieu is important.

Lieu days refer to the unit of measurement when the employee works enough overtime hours or days off to be awarded subsequent days off.

How can I implement a lieu day?

For implementing a day in lieu, you need an adequate recording system of who is doing what on what day. This is especially a problem in your HR department. Monitoring the hours manually using a ledger, or an Excel spreadsheet template, was the old fashioned way of doing things. Nowadays you must ensure a more smooth, error-free process when taking into account which employees have worked how many extra hours, and what that means in terms of their allocated lieu days. Use a time logging system within an app like Sesame to have a better overview of who has what is called “banked time” or “banked hours” – hours to spare when.

You also need to draft a contract between you and the employee so that each party is aware of the conditions for implementing in lieu days. It is very rare for in lieu days to be enforceable by the employer. It is often up to the employee to implement the system they prefer for overtime work. They may prefer overtime pay if the law entitles them to this. Make sure this document is available to both parties as part of the contract between you and the employer.

What are the advantages of having in lieu days?

Time Off In Lieu is often ideal for companies with high stress, short-term projects that need extra hours for completion followed by less stressful periods. It helps them not have to pay out overtime hours or extra labour costs and in return they are subject to a fair deal for their employees between hours put in and hours the latter are allowed to take off. Put simply, for the modern working day, time off in lieu can be sometimes essential!

In terms of costs, it has been shown that in lieu days can have a positive impact in keeping labour costs down. Paying employees overtime might mean your labour costs go over budget, so awarding them time off instead might be an interesting idea for your company.

Lastly in lieu days may increase worker satisfaction in your company as they feel they have more freedom in their schedule and don’t perceive themselves to be underutilised.

Before you go ahead and use the system though, remember the following about in lieu days :

• If employees are working remotely you must implement a monitoring system to make sure there is no fraud in terms of hours banked working. To avoid any fraud you can set limits to in lieu days.
• You are subject to regulations depending on where you are set up. In the US contract law can be quite light and you have more flexibility than in the EU, where you are subject to the EU’s Working Regulations. In the UK you are subject to the UK Working Time Regulations.