Skip to the content

The leave policy checklist: questions every small business should answer

Most arguments about leave are not really about leave. They are about a rule nobody wrote down. "Can I carry my days into next year?" "Does Friday count if I take Thursday and Sunday?" "Do I need a doctor's note for one day?"

When the answer depends on who you ask, people feel treated unfairly, even when nobody meant to be unfair.

A clear leave policy fixes that. It does not have to be long. It has to answer the questions people actually ask. Below is a checklist of those questions, grouped by topic. Use it to write a new policy or to check the one you have.

A note before you start: leave entitlements and rules are set by law in many places, and they can differ by sector and type of worker. This article does not give legal numbers or advice. Check your local labour law and get advice from a qualified adviser before you finalise your policy.

1. Which types of leave do you offer?

  • Which types do you offer? (For example: annual or earned leave, casual leave, sick leave, maternity leave, unpaid leave, and any others your business uses.)
  • Who is each type for? All staff, or only permanent staff after a probation period?
  • Is any type paid differently from the others?
  • Is there a type for special cases, such as bereavement or a family wedding, or do those come from another balance?

List every leave type by name, and use the same names everywhere: on forms, in letters, in conversation.

2. How do balances build up?

  • Is the full balance given on the first day of the year, or does it build up month by month?
  • What happens for someone who joins in the middle of the year? Do they get a proportion?
  • When does the leave year start: January, the joining date, or your financial year?
  • Who can adjust a balance by hand, and do they have to record why?

This is where many disputes start.

Write a short worked example in the policy: "Karim joins on 1 April. By 30 June he has…". Examples prevent more arguments than rules do.

3. What happens to unused days?

  • Can unused days be carried over to next year?
  • Is there a limit on how many?
  • Do carried-over days expire if not used by a certain date?
  • Can any unused leave be paid out, and when? (This is an area where law often applies. Take advice.)

4. How much notice is needed?

  • How far in advance must people apply for planned leave?
  • Is the notice period different for longer leave?
  • What about emergencies? Who should the person tell, and how quickly?
  • Are there periods when leave is not usually approved, such as stock-taking, year end or a peak season? If so, name them in advance.

Blackout periods are fair only when people know about them before they make plans.

5. Are half days allowed?

  • Can people take half a day? For which leave types?
  • What counts as a half day: morning or afternoon, or a set number of hours?
  • How does a half day show in the balance?

6. What evidence is needed for sick leave?

  • Is a document needed for sick leave? From how many days?
  • What kind of document is accepted?
  • Can it be submitted after the person returns?
  • Who sees it, and where is it kept? Medical information is personal. Keep it private and share it only with the people who need it.

7. How do holidays and weekends count?

  • What is your working week? (Many businesses here use Friday and Saturday off, others work six days. Write yours down.)
  • Which public holidays do you observe, and do you add any company holidays?
  • If someone takes leave on both sides of a weekend or holiday, do the weekend days count as leave?
  • If a holiday falls during someone's leave, is that day counted?

Publish your holiday calendar at the start of the year so people can plan.

8. Who approves leave?

  • Who approves first: the line manager, a department head, HR?
  • Is there a second approval for longer leave?
  • Who approves when the usual approver is away?
  • Who approves managers' and senior staff leave?
  • How quickly should approvers reply?
  • Does a rejection need a reason?

We recommend that every rejection comes with a reason. It is fairer, and it stops the same request coming back next week.

9. Can approved leave be cancelled or changed?

  • Can an employee cancel leave after it has been approved? Up to when?
  • Does a cancellation need approval too?
  • When cancelled, are the days returned to the balance straight away?
  • Can the business ever call someone back from approved leave? Under what circumstances?
  • What happens if someone returns early or extends their leave?

10. How will people know their balance?

  • Where can an employee see their current balance?
  • Can they see pending requests separately, so they do not book the same day twice?
  • How often are balances checked and corrected?
  • Who do they ask if they think a balance is wrong?

A policy that people cannot check against their own balance will not be trusted.

Writing it up

  1. 1

    Write it in plain language

    Short sentences, one rule per line. Avoid "notwithstanding".
  2. 2

    Add two or three worked examples

    A new joiner, a half day, a cancellation.
  3. 3

    Have it checked

    Ask your adviser to review it against your local law.
  4. 4

    Share it and ask people to acknowledge it

    Keep a record of who has read it.
  5. 5

    Review it once a year,

    and record what changed in each version.

Once you have answers:

A quick checklist

  • [ ] Leave types named and who they apply to
  • [ ] How balances build up, including for new joiners
  • [ ] Carry-over rules and limits
  • [ ] Notice periods and blackout periods
  • [ ] Half-day rules
  • [ ] Sick leave evidence and privacy
  • [ ] Working week, holidays and how they count
  • [ ] Approvers, backups and reply times
  • [ ] Cancellation and changes after approval
  • [ ] How employees see their balance
  • [ ] Reviewed by an adviser, shared and acknowledged

Putting your policy into practice

A written policy is the first step. The second is applying it the same way every time. In PeopleMotive HR you set up each leave type with your own rules (accrual, carry-over, half days, notice, documents for sick leave), add your holiday calendar and blackout periods, and every balance keeps a full ledger. Employees see their balance before they apply, and you can publish the policy itself in the policy library and track who has acknowledged it. If that would help, you can start free.

Ready to spend less time on HR admin?

Set up your company in a day and bring your team in when you’re ready.

Start freeBook a demo