Overtime and time off in lieu
Time off in lieu of overtime and how to avoid owing too much time at the end of the year.
An alternative to paying for overtime is to offer time off in lieu (TOIL). The practice is particularly common among higher-paid staff who work overtime.
Workers must agree to TOIL. They must also arrange to take it at a time that is convenient for the employer.
As with all forms of reward for overtime, TOIL needs careful management, and the ground rules should be set out clearly. One of the main problems with TOIL arrangements is the accumulation of owed time, which can amount to several weeks by the end of a year.
TOIL and employment contracts
This can be overcome with wording in the employment contract such as:
"No more than seven hours may be accumulated in any one month, and the time off must be taken in the following month. No entitlement can be carried forward without prior agreement. Any entitlement not taken will be lost."
In some businesses, time off is given in addition to overtime payment, especially for work on statutory holidays. You may also want to set out the minimum amount of time that can be recorded, eg 15 minutes. Again, the written terms and conditions or a company handbook should spell out what employees can expect.