What is Time Off in Lieu?

What is time off in lieu?

When your employees work overtime, usually they would expect to be paid by the hour. But with time off in lieu, they can exchange the time that they have worked outside of their contracted hours for additional holiday. By doing this, you can maximise the productivity of your workforce without having to pay extra for it.

For example, if an employee is contracted to work 20 hours over 4 days, they can work those 20 hours over 2 days, and take the remaining 2 days off as time off in lieu.

This means that you can get more work done when it matters and you can provide your employees with a form of flexible working.

How can you implement time off in lieu?

Any time off in lieu must be agreed upon by both parties beforehand. Any time that you offer time off in lieu, you must emphasise the fact that it will be used as an alternative to paid overtime.

What if you can’t afford time off in lieu?

Because you are their employer and time off in lieu isn’t counted as a part of your employee’s annual leave, you get to decide when they can take their time off in lieu. A good way to implement time off in lieu is during the busier periods of the year. For example, if you allow your employees to work overtime during Christmas, you can give them time off in lieu as if it was an additional holiday later on in the year.

By doing this, you can make sure that you’ve got enough staff to cover the busy periods while keeping a reasonable amount on board at any one time while they take their well-earned time off.

Is time off in lieu written into your employees’ contracts?

You are responsible for writing time off in lieu into your employees’ contracts. The best thing to do in this situation is to write in a clause about time off in lieu and the guidelines that it can be used in into their contracts.

Even if you have an employee that has no intention of taking time off in lieu, there might come a situation where it is beneficial for both of you that the option is available. You need to remember things like rolling over earned to me off into a new year, how much time off they can accrue at any one time, and the lengths of time that they can take off at once.

The risks of time off in lieu

If you don’t write what we mentioned above into your employees’ contracts then they might have a different idea of what their time off in lieu would look like when they agreed to work overtime. In order to avoid any conflict, you should have as many open and honest discussions with your employees about time off in lieu as they need before you come to a mutual understanding of what it will look like and how it should be implemented.

Additionally, you should keep a record of any time off that your employees have taken from their accrued time off in lieu and their annual leave. Because these are two different kinds of holiday with different entitlements, it is always a good idea to keep a track of them.

We can help

If you are looking for advice on whether your business would benefit from offering time off in lieu, get in touch with our team. We ware more than happy to discuss what it would look like for your business financially and whether it is the right choice for your business.

Call us today on 01235 768 561 or drop us an email to enquiries@pantheraaccounting.com – we’ll be back in touch with you shortly.