Common pitfalls of Time Off in Lieu (TOIL) policies and how to avoid them in summary:
Time off in lieu (TOIL) can be a flexible way to reward extra hours worked — but without clear policies and consistent management, it can create confusion, legal risk, and employee dissatisfaction. HR teams should ensure TOIL arrangements are transparent, compliant, and carefully monitored.
5 common TOIL policy pitfalls to avoid:
- No clear TOIL policy
Failing to define eligibility, accrual rules, and expiry dates can lead to inconsistent application. - Poor record-keeping
Without accurate tracking, businesses risk disputes over hours worked and leave owed. - Unclear approval processes
If overtime isn’t authorised in advance, disagreements can arise later. - Ignoring Working Time Regulations
TOIL must still comply with UK working time and rest break requirements. - Allowing excessive TOIL build-up
Large accrued balances can create operational disruption and financial risk.
When managed properly, TOIL supports flexibility. When managed poorly, it can quickly become an HR headache.
A major project is running late and the team will have to put in extra hours if it is to be delivered on time. A key member of staff has gone down sick and getting peers to pitch in and stay late is the only way to cover the work.
There are always times when companies need people to work over and above their standard hours and giving them Time Off in Lieu (TOIL) to compensate is standard practice. It’s an approach, however, that needs managing carefully if it’s not going to lead to knock-on problems with resourcing, cause bad feeling among employees or add to the administrative burden.
So where does the average TOIL policy go wrong and what steps can you take to ensure it is managed successfully?
1. It’s an unofficial policy
It might seem nonsensical, but it’s not uncommon to find that TOIL policies are hidden away. A manager asks their team to work at a weekend to meet a pressing deadline, or gets a part-time worker to cover for a sick colleague at a time when they wouldn’t normally be working.
It’s not straight-forward for them to get sign off for an additional payment, so they let the employee take Time Off in Lieu instead. The manager gets the cover the business needs, and the employee is happy with the extra time. In principal, it’s fine. But, hidden TOIL can have a negative impact on the whole organisation, obscuring wider resourcing issues and – if too much time is worked – resulting in legal implications.
2. The rules are not clearly outlined
HR needs to maintain an ongoing dialogue with line managers about how they manage short-term resourcing pressures and overcoming broader absence management challenges. Where TOIL forms part of that approach, it’s important to explain why formalising the process protects both operational continuity and compliance. Often, already stretched managers worry about added administration or ‘red tape’.
Having clear, simple policies and an easy way to record TOIL online, can help overcome these objections. Make sure there is no room for confusion or ambiguity in whatever rules the organisation decides to set. Employees need to be clear about the process for approving and recording overtime and how any extra time they put in will be rewarded. There’s nothing worse for an employee than looking forward to an injection of extra cash only to find that paid overtime isn’t forthcoming – or to assume they’re building up holiday entitlement only to find they’ve overshot the period when it can be taken.
Make sure the staff handbook or HR portal is clear about exactly how much TOIL can be accumulated each month, when it has to be taken by and whether it can be carried forward from one holiday or calendar year to the next. This will help to avoid issues of TOIL stacking up to unacceptable levels – and will ensure employees feel fairly treated and are willing to go the extra mile when you need them to. When drawing up your policies, remember to check local legislation. As this guide from Taylor Wessing shows, employees’ rights to paid time off vary hugely from country to country, and this extends to TOIL.
3. Overtime gets out of control
The purpose of Time Off in Lieu (TOIL) should be to cover exceptionally busy periods when the workload temporarily increases – end of year, for example, or when a time sensitive project is close to deadline. If you find that people are regularly having to work extra hours, however, it should raise some alarm bells. Is a particular team or department under-resourced? Or are there issues with productivity and efficiency that need to be tackled? If staff are consistently taking TOIL it ends up creating a domino effect.
People take extra holiday to compensate for the overtime they’ve worked – and colleagues have to work longer hours to pick up the slack, building up TOIL themselves. It makes efficient resourcing impossible and can lead to a sense of entitlement among employees, who feel they should be able to work extra hours and take time back whenever it suits them.
It’s easy to slip into a situation, for example, where employees manipulate the system, deliberately taking longer to complete work that could be accommodated in their normal working day because they are short of holiday and want to bank up some extra hours.
Putting this right can take time and diplomacy, especially if employees are regularly making up their salary or their holidays this way. Having a good handle on the data makes it easier to demonstrate that the situation has got out of hand and that the business needs to regain control.
4. The process breaks down
Managing Time Off in Lieu (TOIL) can be a real headache. In a busy environment, it’s difficult for managers to keep track of who has worked how many extra hours, whether the overtime was approved and when TOIL has to be taken by. Hours get wasted on manual processes and mistakes are easily made. Luckily, HR software with integrated absence management is now available to help streamline the process and ensure it is implemented consistently and transparently across the business.
Cezanne HR’s absence management software module, for example, allows employees to request authorisation for overtime via their HR system. When managers approve or decline the request, an email to the employee is automatically triggered, so that it’s always clear exactly what has been agreed.
The system then automatically updates the employee’s holiday entitlement to include the extra time, together with information about expiry dates. TOIL data can also be integrated with data about paid overtime, putting all the information about overtime in one central, easily accessible place and making it easier for the business to make budgeting and resourcing decisions.
Erika Lucas
Writer and Communications Consultant
Erika Lucas is a writer and communications consultant with a special interest in HR, leadership, management and personal development. Her career has spanned journalism and PR, with previous roles in regional press, BBC Radio, PR consultancy, charities and business schools.
