What is TOIL leave and why do you need to know?
There are a lot of different types of leave available for employees, but one that often raises a lot of questions for small business owners is Time Off in Lieu (TOIL).
TOIL is a form of paid leave that employees can take instead of overtime pay.
TOIL leave gives small businesses a way to manage their workload without heaping on additional financial burdens, which can add up quickly with extra overtime pay. This can be a huge benefit for small businesses and startups where money is tight.
Understanding TOIL and how it works can save your small business money.
I have a bit of hands-on experience with TOIL. My customer-facing team requires that a certain number of advisors be on standby at all times, in case a customer needs assistance. The team members who cover non-working hours then get time off in lieu to make up for that extra time they’ve worked.
Based on my team’s experience, I’d like to get into TOIL in-depth, how it works in UK law, how to calculate it, and what the benefits of TOIL are for employees and employers alike.
What is TOIL and how does it work?
TOIL is a form of paid leave that employees can collect over time when they work pre-approved overtime, and they prefer to get more time off instead of extra pay.
Instead of receiving additional pay for the hours they worked, they can choose to take time off at a later date.
How does TOIL work in practice?
Usually, it starts with managerial approval both for the overtime hours worked and for the time taken off later.
If you’re a startup founder or a small business owner, TOIL leave offers you two benefits:
- Cost-effectiveness: TOIL allows businesses that are having bandwidth issues to manage their workloads without having to pay for overtime
- Flexibility: Giving your employees the option to take time off when they need it can improve job satisfaction. That gives your employees a reason to stick around when it’s crunch time and things get hard
The legal framework of TOIL in the UK
The Working Time Regulations 1998 govern working hours in the UK.
One of the key points is that no employee can be forced to work more than 48 hours per week without a prior agreement. However, individual countries may apply rules that are more favourable for workers.
Minimum wage is important here as well. Even with TOIL, workers must earn minimum wage over the total average of overtime hours worked.
As per UK government guidelines on weekly working hours, employee contracts should specify whether they offer TOIL or overtime pay.
For this reason, having a documented TOIL policy is important. Having one in your business documents and making it accessible is a good business practice, but also needed for legal compliance.
Calculating TOIL: a step-by-step guide
Calculating TOIL can become messy quickly, but it doesn’t have to.
The basics are simple enough: one hour of TOIL is accrued for each hour of pre-approved overtime.
However, there are a few special cases to consider:
- Overtime rates: You may choose to offer a higher TOIL rate for any overtime worked during holidays or weekends
- Expiry dates: Employees need to use TOIL within a certain date or it will expire. That ensures that TOIL can’t accrue indefinitely and cause you staffing challenges. For example, members of our team need to book TOIL within one month of the overtime work occurrence.
Benefits of implementing a TOIL policy
Offering TOIL leave isn’t just money out of your pocket or a pair of hands out of your team. If you think through your TOIL policy carefully, it gives you these benefits as a small business owner:
Cost-saving benefits
For one thing, TOIL can save your company money, in the long run.
Offering TOIL means you avoid paying overtime rates, which would be significantly higher than normal pay. This is especially helpful for a small business owner on a tight budget.
Flexibility for employees
TOIL isn’t just a boon for your employees, but it’s a good thing for you too. A TOIL leave policy can let employees extend their weekends and take care of personal matters, or just recharge their batteries.
That leads to better employee satisfaction, higher employee engagement, and better employee retention.
Operational efficiency
When things get busy, employees can work extra hours or on weekends to help you get things done, then use their TOIL to take time off when the dust settles.
That way, productivity remains consistent, you meet deadlines, and you achieve your goals with your entire team.
Legal benefits
Having a TOIL policy is also important for legal compliance. A clear policy helps you avoid legal disputes and stay compliant with UK employment laws.
How Charlie makes TOIL management simple
Managing TOIL can be a tricky proposition in between calculating overtime hours and making sure you have enough staff on hand at any given time.
The Charlie platform makes TOIL management simple for both you and your employees. The Charlie time-off feature can track all time off, including TOIL leave. It can also help manage TOIL requests in the following ways:
1. One-click TOIL requests
No more email chains. No more bulky paper forms. Team members can request TOIL leave in Charlie with a few button clicks to start the approval process.
2. Managerial notifications
Charlie will notify you whenever an employee makes a TOIL request. From there, you can decide whether to approve or deny the request and then go about your day.
3. Automated pro-rata calculations
Calculating TOIL by hand used to be an arduous and error-prone task. Not anymore, not with Charlie. The platform will automatically calculate TOIL based on your company’s policy, making sure requests and TOIL leave granted are accurate.
Remove the HR toil of a TOIL policy with Charlie
TOIL can be an important strategic tool that makes your company a good place to work and benefits you as a small business owner in the long run.
Understanding how TOIL works is important for any small business to manage its resources effectively and well. Knowing how it can impact your business will save you money, make sure you have enough staff on hand when you need it, and keep you on the right side of the law.
Start a free trial with Charlie, and make the complications of TOIL leave management a breeze.
