Lie Down is an action performed by pressing the appropriate button when available.
The need of sleep will rise over time and will grow faster if hunger or thirst are high. If the need for sleep rises a certain point, you will encounter the Sleepiness negative status effect, and the hominid will get sleepy which gets indicated by a screen slightly fading black on and off again as if the hominid was struggling to keep its eyes open.
While the screen fades black during the negative status effect, hearing will also be impaired, and the "ping" sound for successful completion of tasks will not be heard anymore (or will be dampened).
Lie Down on a Sleep Spot and the Evolution action will appear. Press the appropriate button and the menu will open.
The icon for Lie Down doesn't always appear. The choice will be there but not always the icon.