Time in lieu (also referred to as TIL or TOIL), is an agreement between an employer and employee to replace overtime payments with leave accruals that the employee can take at a later date.
In this article we will cover the following;
- Viewing An Employee's Time In Lieu Accrual Balance
- Accruing Time In Lieu
- Taking Time In Lieu
- Converting Time In Lieu Back To Overtime
- Paying Out A Time In Lieu Balance
- Ad-hoc Time In Lieu
Viewing An Employee's Time In Lieu Accrual Balance
Employee leave balances including Time in lieu can be viewed from the Employee profile Leave tab. for a guide on how to access this please see our Employee Options (Full Detail) guide.
The entitlement is recorded in the system as an hourly leave accrual.
The current entitlement balance can also be viewed from the reporting using the Leave Entitlements (Base Rate) report, and the accrual and taken can be tracked using the Leave Entitlements Tracking (Opening Balance, Pro Rata) report.
The system also provides the option to grant employees to view their entitlement balances from the ClockOn GO app and Employee Portal. To enable this check the Employee Access Group settings.
Accruing Time In Lieu
As stated in the introduction, time in lieu is a replacement for overtime, as such it requires overtime triggers to accrue in the system. Overtime can be triggered on several different items, some common examples include;
- Over a set number of hours within a period,
- After a specified number of hours worked in a shift\day,
- At specific times worked in a day.
These settings are enabled in the employees attached ruleset and more information on these can be found in the Rule Set - Overtime Configuration article.
IMPORTANT NOTE: Making changes to the rulesets will also apply to all other users that are linked to the same ruleset when generating payroll. If this change is only for a single or set group of employees then the suggestion is to create a copy of the ruleset and apply it to the relevant employees prior to making the changes. With the overtime regulations established, the subsequent action is to confirm that Time In Lieu is activated. This can be configured to accumulate based on either a 1 to 1 ratio of hours worked or according to the overtime percentage rule rates; for instance, 1 hour worked at a 1.5 OT rate would result in an accrual of 1.5 hours.
ClockOn recommends referring to your industry award or employee agreement when determining the appropriate settings for your use.A full listing of the options available for this can be found in the Rule Set - Leave Configuration article.
Employees Taking Time In Lieu Hours
Time in lieu hours can be assigned for payroll by using the leave option on the time sheet details screen.
By adding this, the payroll will automatically assign this as paid splits of time in lieu at payroll.
A common question that we have had in the past is why is my employee accruing Time in lieu in a period that they are also taking Time in lieu!
The explanation for this is that the accrual time allocated to the employee is essentially a delay in the payment for hours they have already worked, which will be recognized as standard hours at a future date. This signifies that the employee remains entitled to the benefits associated with those hours that have been accrued previously, and will still qualify for penalty rates, overtime triggers (and consequently time in lieu), as well as leave accruals.
To demonstrate this, the diagram below depicts an employee who has worked 1 additional day of 7.6 hours beyond his full-time hours of 38, thereby triggering an overtime condition for Time In Lieu.
In the first example, this was accomplished solely based on the worked hours, whereas in the second, some of the employees' typical worked hours were replaced with hours taken as time in lieu.
| Normal Hours | TIL Taken | OT converted TIL Accrued | Total Hours | |
| Example 1 | 38 | 0 | 7.6 | 45.6 |
| Example 2 | 30.4 | 7.6 | 7.6 | 45.6 |
The outcome is that the employee retains the same net hours and benefits provided to them.
Converting Time In Lieu Back To Overtime
Hours that have been assigned to accrue as time in lieu can be overridden to be converted back to paid overtime from the payroll screen.
To do this expand the the time in lieu costing, right click on it and select Convert time in lieu to overtime?
As shown above, this can also be reverted back to a time in lieu costing using the same method.
Paying Out A Time In Lieu Balance
Employers can elect to pay out balances not taken by employees rather than see the entitlements extend out of control, or if there is a award or agreement requirement to do so beyond a set time frame. This is done through the payroll screen by expanding the Leave Payouts section, Time in lieu and entering the amount of hours in the Paid field.
Doing this they system will calculate the amounts using the employee's base hourly rate and add the amount to the Gross payment total and re-calculate the payrolls tax and super requirements.
Ad-hoc Time In Lieu
While we are able to convert existing time in lieu items back to overtime, there is currently no way to do the opposite when an existing OT trigger is not included or the ruleset time in lieu settings are disabled.
If you have a situation where this is needed outside of the automated systems ability, this will need to be handled as a manual adjustment to the employee's hours with timesheet notes (to prevent an over-payment) and manual adjustments to the employee's leave balance on their employment profile.
Once added the balance will show in payroll and if enabled ClockOn GO and the employee Portal.
Please note that by doing this process manually the leave tracking reports will reflect the change from your next payroll process, however, the manual adds will not show as leave taken row items.