Click on Settings > Configuration > Attendance > Days in Lieu Policy > Add New to Setup Policy for days in lieu and name the policy under the Policy Name section as shown below

Define whether the employees can request extra hours or not by enabling/disabling the toggle button and enter the number of hours that make a day in lieu for an employee, as highlighted below

Assign employees to the days in lieu policy. Click on the employee name on the left-hand side to assign him/her to the policy

Note: At a time, a single employee can be assigned to only one days in lieu policy. You will see the tag Unavailable besides the employee name if he/she has already been assigned to some other days in lieu policy as shown above.

Review and click on Save