In the wake of the pandemic, many employees have grown comfortable working from home. However, the reality is that enabling all employees to work remotely is often unfeasible. This raises the question: what about the 94% of employees who prioritize work-life balance?
In Singapore, where overwork is prevalent, addressing this issue is crucial. While granting remote work to all employees may be difficult, offering time off in lieu can help strike a better balance. Taking action now can prevent valued employees from resigning due to employee burnout.
Time off in lieu (TOIL) allows employees to take time off work for extra hours performed. Understanding and implementing TOIL effectively can help rejuvenate your workforce, leading to improved results and positive work environment.
What is time off in lieu?
Time off in lieu refers to the practice where an employee takes time off of work for additional hours they have worked beyond their regular working hours. Instead of receiving monetary compensation for overtime, employees accrue hours they can use as paid time off. It gives them the flexibility to manage work-life balance and can be particularly beneficial if they prefer time off rather than additional pay.
For example, if an employee works extra hours in a particular week, he is entitled to take equivalent time off in the future. It typically depends on the employer’s approval and clauses mentioned in the company policy. Employers can use time off in lieu to reward their hardworking employees without taking the burden of additional payroll costs for overtime.
What is the difference between TOIL and paid overtime?
When dealing with overtime, both time off in lieu and paid overtime offer solutions, but their compensation methods differ. With TOIL, employees trade extra hours for future paid leave, whereas paid overtime compensates employees with additional pay for each hour worked beyond their regular schedule.
TOIL offers greater flexibility in managing work-life balance, as employees can choose when to use their accrued time off. Conversely, paid overtime provides immediate financial compensation for the extra hours worked. Each approach provides its benefits and is suitable for various circumstances, depending on the needs and preferences of the employees and organization.
Who is eligible for time off in lieu in Singapore?
When it comes to determining eligibility for time off in lieu in Singapore, there are a few considerations:
Employment Act coverage
Part IV of the Employment Act entitles employees who are earning up to S$2,600 per month and workers performing manual labor earning up to S$4,500 per month to time off in lieu if they worked on a rest day or public holiday. Employees can choose to receive either:
- 1 day of TOIL for up to 4 hours of work
- 1 day of TOIL + overtime pay for more than 4 hours of work
It is important to note that employees not covered in Part IV such as managers and executives are not automatically entitled to TOIL. However, there are other ways to provide entitlements to these groups of individuals.
Employment contract
For individuals not covered in Part IV of the Employment Act, the employment contract is the go-to to determine specific TOIL provisions and entitlements for working overtime, on weekends, or on public holidays. It’s important to specify all these conditions within your employment contracts to ensure compliance.
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Mutual agreement
Regardless of the Employment Act coverage or employee contracts, employees can always negotiate TOIL provisions with employers in exchange for extra working hours. This should be a mutually agreed arrangement where both parties are aware of the terms including numbers of hours worked and the corresponding time off provided.
It’s also crucial to note that the act provides 11 public holidays to employees in Singapore. What if your peak working days fall between any of these holidays? That’s where you ask employees to put in the additional hours for time off in lieu or paid overtime, as they see fit.
Do employees get time off in lieu if a public holiday falls on a rest day or non-working day?
As per the Ministry of Manpower guidelines, if the public holiday falls on a rest day, the following day will be a paid public holiday. If the public holiday falls on a non-working day, employees are entitled to time off in lieu or an extra day’s pay.
For example, Nathan works 5 days a week. In this case, Saturday is his non-working day and Sunday is his rest day.
For public holidays that fall on Saturday, Nathan is entitled to either a day off or salary in lieu at the gross rate of pay, which includes the basic rate of pay and allowances.
For public holidays that fall on Sunday, Nathan will receive a paid public holiday on Monday.
Struggling to understand and calculate public holiday pay in Singapore?
For employees who work on a public holiday, employers by default are required to pay an additional day pay. However, by mutual agreement, employees can choose to receive either:
- A public holiday in lieu
- Time off in lieu (only for employees not covered under Part IV)
How to calculate time off in lieu?
Accurately calculating time off in lieu is crucial to ensure you are accurately compensating for the number of hours worked beyond regular working hours. Here are some tips:
Recording time off in lieu earned
Your company policy or employment contract should clearly state a specific conversion rate between overtime hours worked and time off earned. You then multiply the overtime hours worked by the agreed-upon conversion rate to calculate the equivalent time off earned by employees.
For example,
Conversion rate: 1.5 Hours of TOIL for 1 hour of overtime
Total overtime logged by employee = 10 hours.
Time off in lieu entitled = 10 hours x 1.5 = 15 hours
Omni Tip: Maintaining accurate records of time off in lieu is crucial to clearly indicate the dates or periods for which TOIL is earned. This practice helps remove unnecessary confusion.
Administering time off in lieu
Proper administration of TOIL is pivotal to prevent potential misuse. It is important to ensure that TOIL aligns with company policies and procedures, including clear guidelines on how employees can request TOIL in advance.
You should clearly state the number of days of advance notice required from employees and outline the approval process from managers. Additionally, maintain accurate records of TOIL balances, showing the total accumulated TOIL hours and any time taken off in lieu.
When employees request time off in lieu, deduct the corresponding number of TOIL hours from their balance. Encourage employees to take TOIL within a reasonable timeframe to prevent excessive accruals.
Utilization of Time Off in Lieu
Now that we’ve covered the basics of calculating and administering time off in lieu, it is necessary to impose limitations on usage of TOIL. This includes setting a cut-off date and refraining employees from using TOIL during peak periods.
Setting a cut-off date
Setting a cut-off date for TOIL offers several benefits for both employers and employees.
For employers, accumulating large amounts of unused TOIL can create significant financial liabilities, especially when employees choose to take their time off simultaneously. A cut-off date encourages employees to utilize their accrued TOIL within a reasonable time frame, reducing potential financial burdens.
On the flip side, encouraging employees to use their TOIL within a specific time frame helps them maintain a healthy work-life balance and avoid potential burnout from accumulating unused leave.
Limiting TOIL during busy periods
Busy periods often require all hands on deck. Allowing employees to take TOIL during this time could potentially disrupt productivity due to understaffing. By limiting the usage of TOIL during peak periods not only ensures sufficient workforce availability when it’s needed the most but also, reduces workload and associated costs for HR departments to process and manage TOIL requests.
What to include in your time off in lieu policy?
Your time off in lieu policy should clearly outline eligibility criteria, accrual rates, maximum limits, request procedures, appropriate tracking methods, and other relevant details. Let’s delve into these aspects in detail.
Eligibility
The policy should clearly specify who is eligible for TOIL. As mentioned above, employees are entitled to TOIL based on the Employment Act or employment contract. However, the policy can further clarify eligibility based on:
- Employee category and employment status: define which categories of employee are eligible. Specify eligibility based on employment status (permanent or probationary).
- Job roles: clarify eligibility based on job roles or positions. Consider responsibilities, work hours, or classification within the organization. For example, positions requiring frequent overtime should be eligible for TOIL.
These are just some examples of eligibility criteria for your TOIL policy. It is crucial to focus on implementing fair and equitable criteria across the organization.
Accrual and maximum limits
Accrual in a TOIL policy determines how employees accumulate time off based on additional hours worked in a given period. The accrual rate can vary based on different factors.
For example, the hour-for-hour method accrues TOIL based on each additional overtime hour worked, ensuring employees receive equivalent time off. However, some organizations may prefer a fixed accrual rate, where employees receive time off based on a predetermined rate, regardless of actual overtime hours.
To prevent excessive accumulation of TOIL, setting a maximum limit on TOIL accrual can be beneficial. This ensures employees do not accumulate excessive time off, which could disrupt company productivity and operation. The limit should strike a balance between providing enough rest time for employees and maintaining operational efficiency, while also complying with relevant regulations.
Usage
Your time off in lieu policy should clearly state the process for requesting time off, including how and when employees can take their accrued time off. This should include a formal procedure for submitting requests, such as through employee self-service portals, email or written form, along with any required documents or approvals.
Additionally, the policy should specify advance notice requirements to facilitate effective absence management and ensure sufficient time for planning during absences. It should also define limitations on when TOIL can be taken based on staffing levels and peak periods to avoid disrupting organization operations.
Lastly, ensure transparency by empowering employees to easily access and track their real-time accrued TOIL balance, allowing them to plan time off effectively.
Recordkeeping
Investing in an HRIS can help manage TOIL accrual, usage, and balances for both employers and employees. Employees should have access to a dedicated employee portal to view their TOIL records, enabling them to schedule time off effectively.
However, it is essential to prioritize data security and confidentiality by ensuring that only employers and relevant employees have access to this information.
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Review and updates
Regularly review your TOIL policy to align with your organizational changes, legal developments, and employee feedback. Consider various metrics like utilization rates and compliance with accrual limits to gauge employee engagement and satisfaction.
Collect feedback from relevant stakeholders, including HR professionals, managers, and employee representatives, and update the policy as needed.
Communicating the policy
Transparently communicating any changes to the TOIL policy to employees using clear and simple language through various channels such as email, newsletters, bulletin boards, and team meetings.
Ensure the TOIL policy is clearly outlined in a document or include it inside your employee handbook, emphasizing key points such as eligibility criteria, accrual methods, maximum limits, and request procedures.
Additionally, HR professionals and managers should be readily available to address any TOIL-related inquiries.
Additional considerations
Some additional considerations to strengthen your TOIL policy are as follows:
- Carryover policies
While some employees are excited to take time off, others may not utilize it as frequently. Clarify in your policy whether accrued time off in lieu hours can be carried over from one year to the next. Some organizations permit this while others require employees to use all accrued TOIL within a timeframe. If carryover is allowed, specify any limitations or conditions.
- Loss of TOIL
What happens to the accrued TOIL in case of resignation or termination? Either the employee receives the payout of unused TOIL hours, or it is fortified. Your company policy should tackle the same while complying with labor laws and regulations.
- Compliance with labor laws
Ensure your TOIL policy complies with relevant labor laws, regulations, and industry standards governing time off, overtime and compensation in your jurisdiction. This includes adhering to minimum wage requirements, overtime regulations, and specific TOIL provisions. For example, in Singapore, employees covered under the Employment Act are entitled to 11 public holidays. If they work extra hours, TOIL and additional pay policies must be followed.
Time Off in Lieu Management Made Simple with Omni
Time off in lieu offers a flexible approach to balancing employee workload and ensuring fair compensation for extra hours worked. A robust leave management system can streamline the process, making it easier to track, approve and manage TOIL accrual and usage.
Omni’s time off management capabilities help managers and HR teams swiftly navigate employee leave management. Omni’s platform allows you to approve time off in lieu on the go and keep track of who’s in and out of the office with at-a-glance scheduling.
Our employee self-service portal empowers employees to submit their time off requests, which automatically routes to the appropriate manager thanks to customizable approval workflows. Omni seamlessly integrates with your team’s favorite work tools such as Slack, enabling managers to manage time off approvals with a simple push of a button. With automated calculations, employees and managers can easily view TOIL leave balances in real-time, and track how many vacation days they have left without having to go through HR.
Ready to take your TOIL management to the next level?
If you’re not quite ready to take the leap, try leveraging some free tools to simplify your leave management efforts for free. Download Omni’s Employee Time-off Request Form Template to easily gather the information you need to manage employee time and attendance.
