Time-in-Lieu | Meaning and Definition

What is Time-in-Lieu?

In lieu means “in place of”. Time-in-lieu refers to the time an employee is granted off from work for working overtime, i.e., beyond scheduled weekly working hours. Instead of receiving payment for their work beyond usual working hours, they are allowed rest from work on working days.

Modern-day employees expect flexible working hours at the workplace, which facilitates them in maintaining a robust work-life balance. Furthermore, in such an environment, they are less likely to experience stress or burnout, which seriously impacts the efficiency and productivity. When negotiating about working overtime and compensation for that time, time-in-lie emerges as a useful tool.

Time-in-lieu is commonly seen in enterprises where a worker may need to work on weekends, weekdays, or when a job is fairly stressful. Thus, employees in such a scenario benefit more from compensation given in the form of time off from work instead of overtime pay.

The amount of time-in-lieu offered to an employee is incumbent on the number of hours an employee worked over the normal working hours stipulated in the contract. So, for instance, if a worker grinds for 8 hours per day in a 5-day workweek, which equals 40 hours of work/ week. Now, if an employee worked for about 44 hours in a particular week, he/ she must be granted 4 hours, which implies half a day. Employment and labor regulations regulate and limit regular and overtime working hours, which an employer needs to abide by.

How to calculate time off in lieu?

There are different ways to calculate time off in lieu. Some of the ways are:

1. Recording a day in lieu

During peak business days it is often expected to work overtime in order to meet the deadlines on time. In those peak days an employer can provide either extra pay or time-in-lieu in order to compensate their overtime.

2.  Administering TOIL

Once there is a system to calculate the overtime it is easily to calculate TOIL. For example if an employee is entitled to work 5 days but he works for 7 days. He is entitled for two days time off in lieu. 
If they were contracted for 30 hours to work but they work for 35 hours they are entitled to 5 hours of TOIL.

3. Noting the parameters of overtime

TOIL can also be measured by noting down the parameters of overtime. For example- employee takes very short rest time as compared to normal break hours during peak business days. These
parameters helps to calculate TOIL.

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