Green’s Dictionary of Slang

(US prison) a pass allowing a sick prisoner not to work.

1977		B. Jackson Killing Time 186: [A lay-in is a document from an official or medical officer saying an inmate doesn’t have to work in the fields.] I never did sell any pills, but I did sell lay-ins.
2000		Other Side of the Wall: Prisoner’s Dict. July 🌐 Lay-In: A pass or chrono allowing a sick prisoner not to work.