Time-off-in-Lieu of Public Holidays
Updated: Apr 19, 2022
Workplaces are changing and evolving, thanks to technology. Employees can be online and productive in the blink of an eye, wherever they are. Working hours are becoming fluid, and employees are expected to work as required rather than fixed working hours.
At the same time, a new generation of workers is demanding flexibility from their employers. Traditional roles within homes and family are changing. And more emphasis is being placed on life/work balance. To attract and retain great talent, employers need to respond innovatively. It’s not always a case of the highest pay cheque being the winner.
When it comes to public holidays, cultural and religious celebrations may not be regarded with the same solemnity of past eras. Modern employees want the flexibility to decide when to take their time off.
Employment law established to protect employers and employees
As mentioned in our blog 2021 Public Holidays Entitlement HR Guide in Malaysia, all employees are entitled to 11 days of Statutory Holidays on a yearly basis in Malaysia. According to the Holidays Act, in the event that a Statutory Holiday falls on a Sunday, the following working day, Monday, is designed as a Statutory Holiday in substitution. In Sabah and Sarawak, employment is regulated by their respective Labour Ordinances. In Sabah, employees are entitled to 14 paid public holidays a year. This is 16 days in Sarawak, with four fixed holidays on National Day, Yang di-Pertuan Agong’s Birthday, the State Governor’s Birthday and Labour Day. In states and territories with a Saturday–Sunday weekend, if a holiday falls on a Sunday it is deferred to the next working day. In Johor and Kedah, holidays falling on Fridays are replaced by Sunday or the next working day. And in Kelantan and Terengganu, holidays that fall on Saturday are deferred to Sunday or the next working day.
For example, if employees are working a 5-day week, Saturday will be a non-working day and Sunday will be a rest day. In the case whereby the public holiday falls on a Saturday, employees should either get a public holiday off-in-lieu or salary in lieu. If the public falls on a Sunday, the following working day, Monday, will automatically be a paid public holiday.
If an employee has to work on a holiday for business reasons, they can be given another day off or paid double their ordinary wages. Overtime work on holidays must be paid at triple rates. Where it is specified in their contract, employees are entitled to a travelling allowance for working holidays (but no additional food or housing allowances depending as per contract). This may prove quite costly in the long run for businesses operating in Malaysia as Malaysia ranks quite highly in the world for paid public holidays.
This has been the normal practice for Malaysian businesses and HR practitioners for years where a business entity would require their staff to work on holidays. However, nowadays there is another option that businesses can consider adopting with JustLogin’s cloud-based HR software; a new time-off-in-lieu feature which allows employers to apply a time-off-in-lieu rule to all employees, a subset or a single employee. The system also allows administrators to set an expiration date for time-off-in-lieu days, so you can restrict employees to take the time off within the same month or the timeframe that the company has set, for example, rather than letting the time-off-in-lieu accumulate.
Time-off-in-lieu isn’t reserved for just public holidays. Sometimes employees may work or attend training over a weekend or after hours. Instead of being paid overtime, they can be offered time-off-in-lieu during regular work hours (for wage earners above RM2000 or more). This option may be more cost-effective in the long run as businesses can avoid paying double or triple rates for their workers to work on holidays, as well as prevent a large portion of the workforce being on-leave at any given time. It would also be great for employee morale, as employees have the option of adjusting their leaves to suit their schedules.
Benefits for Employees
The time-off-in-lieu system is a step towards treating employees like the empowered adults they are. Time off can be used at their discretion. They no longer have to divulge the details of their private lives to justify time off to take a family member for medical treatment, for example.
Time-off-in-lieu also offers employees a better work/life balance. It can help to prevent burn-out – something paying them overtime doesn’t solve. And if their contract of employment doesn’t cater for overtime pay, expectations of excess hours can increase stress, build resentment and destroy staff morale.
Time is an increasingly valuable commodity, especially at the high end of the pay scale. After a pressured period of work, employees with stressful jobs often appreciate time off over financial remuneration. Especially when you consider remuneration is taxed and time off isn’t.
Benefits for Employers
For employers, time-off-in-lieu offers an opportunity to keep operations running as usual. Public holidays can be disruptive, and for some industries, the holidays mean extra work, not the reverse. Essential services and the hospitality industry are prime examples.
Time-off-in-lieu doesn’t impact the bottom line in terms of profitability the way overtime payments do. So it’s a good option when money’s tight. Employees can perform the work necessary to get a business back into the black without affecting the financials.
The most qualified, valuable employees often seek flexibility from employers. And they can demand it. Offering time-off-in-lieu can make you a preferred employer.
It makes sense for your roadmap to becoming an employer of choice to include a time-off-in-lieu policy. Give thought upfront to the possible scenarios that may evolve and how you want to deal with them. Employees get frustrated and resentful when policies are rolled out, and the details only become apparent in dribs and drabs.
Administering time-off-in-lieu with expiry on JustLogin
To adjust for time-off-in-lieu days with JustLogin, first go to Leave Menu and select Configuration. Under Advanced Settings, check ‘Enable adjustment with expiry date’ and click Save to activate this feature.
To assign time-off-in-lieu with expiry, go to the Leave Menu and select Administration. Click on the tab for Adjustments and complete the form as follows;
Leave Type: PH in lieu (for Public Holiday in Lieu)
Adjustment Type: Credit (to add days)
Adjustments Days: The number of days applicable
Effective Date: The date the in-lieu transaction relates to.
Expiry date: The date the days expire.
Remarks: This is a free field to add your notes.
Employees: Indicate which employee/s the adjustment applies to.
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