How to Create Your Employee Leave Policy

Andrew Buck August 5, 2021

A leave policy is one of the most important parts of your company’s HR department. Whether your business is big or small, office or remote, your staff will eventually need leave for some reason or another. When this happens, it’s essential that you have a clear policy that gives the employee all the information they need to know in relation to taking time off.

Without a clear leave policy, the chance of confusion and miscommunication rises dramatically, as does the risk of accusations of unfairness and bias.

This post will delve into the intricacies of your company’s leave policy. We’ll explain what a leave policy is, its importance for your business, and what to include in your policy.

What is a Leave Policy?

A leave policy lays out everything employees need to know in relation to taking time off. It is a set of universal rules that apply across your business, to all employees.

Your leave policy will include things like the total number of vacation days allowed, different reasons employees can take leave, and the process required to request and take leave.

The leave policy for your business should be introduced during the employee onboarding process, and be easy for employees to find and refer to when necessary.

Why Your Leave Policy is Important

The point of a leave policy is to maintain fairness, understanding, and ease of communication in your company’s HR processes.

You can save a long back and forth between staff and department managers or HR when employees can simply refer to the company leave policy to know when, how, and for how long they can request leave.

More importantly, clear policies are your company’s protection against accusations of bias or unfairness.

Whenever it’s necessary to decline leave or discipline staff as a result of too many absences, you can always refer to the company leave policy. Without this, there is the risk of being seen as inconsistent, or being pressured to increase leave allowances or change the rules.

A clear policy also gives employees the peace of mind to know which situations will be covered by paid time off, and help them plan ahead by knowing where they stand in terms of how many days off they have available.

What to Include in Your Company Leave Policy

Every company’s leave policy may look a little bit different. It’s up to you, as the HR manager, department manager or business owner, to figure out what you include in your leave policy.

Generally, a leave policy will communicate the following:

Consider all these points when creating your leave policy. If any other situations come to mind that may arise, include these in your policy too.

Here are some of the leave types you should include in your policy:

You may also choose to include special circumstances such as jury duty, military leave or leave for self-isolation. If you don’t know how to treat these in your leave policy, insert a catch-all like “leave for any situations not covered in this policy will be assessed on a case-by-case basis”.

For more about the different types of leave you should consider offering your staff, check out this article.

Further Considerations

Here are some more things you should think about when creating your company’s leave policy, in order to ensure it’s fair, effective, easy to understand, and unlikely to cause any HR or legal issues in the future.

Laws and regulations

You need to consider all applicable laws related to leave and paid time off when you write up your leave policy.

Consider things like minimum time off requirements, what kind of leave you have to offer your staff, and anything else covered by employment law in the area your business operates.

This is particularly important for leaders of remote teams to take note of, as you may have regulations in multiple countries to consider, if your staff are located across the world.

Clarity

It’s important your leave policy is clear and easy to understand. While one function of your leave policy is to protect your business legally and against accusations of bias, it’s also necessary to make the leave request and approval process as smooth as possible.

That’s why it’s in your interest to ensure the policy is clear, and easy for all staff to understand. There shouldn’t be any confusion about how many days off they are allowed, or what must be provided if an employee asks for sick leave or bereavement leave.

This will reduce time lost to confusion between staff and HR managers, and help keep your employees happier.

Consistency

Finally, your leave policy should be fair and consistent.

Consistency comes in a couple of ways. First, making sure your leave policy is consistent and fair for all staff. You could run into issues if you’re allowing the sales team significantly more time off than support, or staff in New Zealand double the holidays of US employees.

It should also be consistent in that it’s not changing constantly. This will present confusion, and also risks making staff upset.

That being said, it is a good idea to review your leave policy and update it to make sure it stays current. For example, in recent years attitudes have changed towards types of leave like paternity leave and mental health leave, so some businesses may want to update their leave policy to make sure these leave types are included. Also, pandemic-related leave may be something to consider now, such as a special category of leave for employees forced to self-isolate.

Final Thoughts on Creating a Fair and Effective Leave Policy

Your company’s leave policy is an important foundation for your HR processes. This policy will help your staff know exactly when, why and how they can take leave, and set expectations should you need to enforce them at any time.

Take some time to make sure your leave policy is clear, consistent and comprehensive, and includes all necessary types of leave, from vacation days and sick leave to leave for parental duties and self-isolation.

A little work to make sure your leave policy is complete will save you a lot of headaches once your business begins to grow.

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