It’s no secret that everyone needs a break now and then.   

You wouldn’t want to keep an engine going 24/7 without ever stopping, would you? Just like vehicles need to rest, so do your people. 

Whether it be to recharge from work or just go out and do something fun, all businesses offer some type of time off to their employees. However, for your leave policy to actually be successful and benefit both parties, establishing a leave policy is incredibly important. Keep reading to learn more and download your own free Leave Policy Template. 

The Importance of a Leave Policy 

When an employee needs to take leave, the purpose of a leave policy is to help provide clarity and set expectations.  

Hence, a leave policy essentially helps establish a pre-determined period where an employee can be absent from work for a host of reasons. A leave policy also allows employers to retain valuable employees in situations where, without an approved leave of absence, an employee’s only option might be to resign or find alternative employment. 

This can be bereavement, vacation time, being sick, or maternity-related. At its most basic level, the term leave policy represents a set of rules governing the time frame surrounding when employees in your business are allowed to take time off from their job. 

6 Types of Leave to Include in Your Leave Policy

Some of the most commonly offered types of leaves (also included in our leave policy template) are as follows: 

Casual Leave/Paid Time Off

The foundation of all leaves, paid time off helps to address the needs of those things that come up in everyday life. It allows employees to take time off for vacation, family events, and just their personal time. Giving your employees paid casual leave will allow them to prioritize their private life when required. This makes them feel appreciated in the company and boosts engagement. 

Most companies give a maximum of 8 to 15 PTO days off per year. However, this differs greatly based on which part of the world you are located in. 

Sick Leave

Sickness policies are crucial to allow employees to take time off and rest without losing their pay. Sick leaves are a mandatory requirement in most countries to ensure the well-being of their staff, however employees often feel pressured to not take them. 

A 2023 study revealed that nearly 25% of U.S. adults did not take any sick days in the last 12 months. For those who did take sick days, the most common number was two to three days. Similar patterns were observed in countries like South Korea, Japan, Estonia, France, the United Kingdom, and Canada, where up to 51% of people having not taken sick days in the last year.  

Maternity Leave 

Ease the transition into motherhood for your female employees by creating a maternity leave policy they can rely on.  

Given that giving birth to a child is one of the world’s most miraculous events, it seems appropriate to view time off in the same light. Stay prepared by offering maternity leave following your country’s local laws. Ideally, most leaves are around 14 weeks long (just enough time to take care of their newborn for 3 months.) 

Paternity Leave

Paternity leave is also a great way for dads to spend some time with their newborns.  

Unlike maternity leaves, new dads usually get 2 weeks of leave to take care of their newborn kids. Many companies do not offer paid paternity leave for the birth of their child because it’s not mandated by law. However, HR teams must recognize the stresses of adjusting to the newborn and taking care of the child in their first few days and grant them this time off. 

Bereavement Leave 

Needless to say, losing a loved one is traumatizing. Bereavement leave is given to employees who are experiencing grief due to the loss of a loved one. 

A bereavement leave policy can be of any length, but depending on the country, region, or company culture this period might vary from person to person. Most countries allow between two and five days of paid time off, but companies can choose to offer more to their team. 

Unpaid Leave 

Lastly, if employees have used all other types of leave but still need time off, they can opt for unpaid leave. Common examples include FMLA, sabbaticals, and furlough––which is initiated by the employer. 

This leave is pretty self-explanatory — any leave taken outside of an employee’s paid leave allowance will ultimately result in a pay cut. Make sure you’re transparent with your employees about how much they will lose per unpaid day and remind them of their remaining eligible leave days. 

Other Factors to Consider

When creating a leave policy, there are additional points to consider beyond just the types of leave and number of days off employees receive. These include how time off is accrued, how unused days are handled, and how the employee’s responsibilities will be managed while they are on leave. Let’s dive into these important considerations below. 

PTO Accruals

PTO accrual is the accumulation or gradual increase of your paid time off hours during the year.  

Accrued PTO is the type of leave employees earn over time, based on the number of days or hours they’ve worked. In other words, you build it up, little by little, so you can use it when you build enough for desired time off. Employees can use that time for vacation days, sick leaves, or personal time. It’s really up to them to use it however they’d like. 

Think of it as an employee benefit that’s just like your money in the bank. Hence, PTO is earned, saved, and spent as if it were cash in a bank account.  

If accruals will be part of your leave policy and you’re intimidated by the thought of calculating them, here’s how you can automate the entire system with Vacation Tracker:

Rollover Days

To put it simply, PTO rollovers are extra vacation days that get carried forward from the previous year.  

A PTO rollover basically means that you can use those extra days at a later time in the next year. As a result, you can decide what to do with these days depending on your personal schedule and needs. If you want, you can take all your rollover days in one week. Or, spread them out throughout the entire year. This may also depend on your company’s policy on rollovers, so consider reaching out to HR first! 

PTO Coverage

It’s important to consider how employees’ work will be covered during their time off. PTO coverage ensures that tasks are delegated or managed in a way that prevents disruption to the team. This often involves redistributing duties among other team members. It’s important for employees to know if coverage is their responsibility, or their managers. Are they expected to present a plan to manage their absence  

Including PTO coverage guidelines in your policy helps maintain business operations while employees enjoy their leave without worrying about their workload.  

To ensure appropriate staffing, try Vacation Tracker! Managers can easily see who is on leave and when, making it simpler to delegate tasks or adjust workloads in advance. Additionally, both users and managers are automatically notified when someone else from the same department is taking PTO, helping to avoid overlapping absences that could strain resources. The software ensure that all team members are informed of upcoming PTO, allowing for better coordination and planning to prevent disruptions. 

What Should You Include in Your Leave Policy? 

Having a leave policy does not guarantee that every employee who requests leave will be approved. Instead, it allows for an honest conversation between the employee and the employer. 

Therefore, creating a leave policy varies greatly based on your workplace’s individual needs and the nature of the job. However, there are some common points to follow. 

All employers should always include the following things when creating a leave policy: 

• Terms of eligibility  
• Minimum and maximum lengths of time for a leave of absence 
• How often employees can take different leave types 
• What requirements do they need to comply with to ask for a leave 
• The process of requesting a leave 
• If approval is required 
• Whether you will allow negative balances 
• The unit you measure a leave type in 
• If it’s paid or unpaid 

Your Free Leave Policy Template

This article aims to serve as a resource where you can download a leave policy template for your company. Not only will you be able to edit this leave policy template, but you can also choose to incorporate other details into it, including: 

• The length of leaves, depending on your own requirements and needs 
• Your company’s policies on a certain type of leave (E.G. unlimited PTO) 
• HR policies on the procedure of requesting leaves 
• Maintaining employee records of leave 
• Or anything else you deem fit 

We have included the 5 most common leave types in our leave policy template. Keep scrolling to read them all! 

Vacation Leave Policy Template

Sample Leave Policy Template Disclaimer: This is a sample policy that can be adapted for your workplace needs. Suggestions are given about what to include. However, items can be added or removed to suit your individual workplace needs. 

____________________________________________________________________________

Policy: Vacation Leave Policy 

Policy #

Approver: 

Effective (insert date): 

Revised on: 

____________________________________________________________________________

PURPOSE: This policy outlines our company’s provisions to provide paid vacation for employees to take time for rest and recuperation.

POLICY STATEMENT: The amount of vacation to which an employee becomes entitled is determined by their length of service as of his or her employment anniversary date. Vacation accrual starts at the beginning of the anniversary/calendar year, i.e. [date].

SCOPE: This company vacation leave policy applies to all our employees (full-time, part-time, or contract) who have been with our company for at least 6 months. It accumulates at __ hours every ___. The company will offer at least the minimum benefits mandated by law and this policy is merely complementary to the existing legal guidelines.

PROCEDURAL REQUIREMENTS:

• Notification of vacation leave: Employees must notify their immediate supervisor of their planned vacation dates using manager specified procedure, at least 2 weeks prior to the leave 
• Vacation accrual: The maximum amount of vacation hours you accrue is determined by your rate of accrual. Employees must ensure that they have enough accrued leave available to cover the time off requested.
• Rollover to next year: We encourage employees to use their available vacation time. If the available vacation time is not used by the end of a calendar year, accrued, unused leave may carry over to the next year. 
• Vacation pay: Vacation will be paid at the employee’s base rate at the time the leave is taken.
• Upon return to work the employee must complete a signed employee absence record and submit it to their immediate manager in order to keep track

NON-COMPLIANCE: Non-compliance with this policy will be brought to the attention of the appropriate supervisor or HR manager for further action. All leaves will be handled with discretion.

Sick Leave Policy Template

Sample Leave Policy Template Disclaimer: This is a sample policy that can be adapted for your workplace needs. Suggestions are given about what to include. However, items can be added or removed to suit your individual workplace needs. 

____________________________________________________________________________

Policy: Sick Leave Policy 

Policy #

Approver: 

Effective (insert date): 

Revised on: 

____________________________________________________________________________

PURPOSE: This policy outlines our company’s provisions for employees who become sick and need to be absent from work.

POLICY STATEMENT: Sick leave can only be used by ill employees. Sick leave accumulates at __ days per month as per the employee’s employment contract. The company will offer at least the minimum benefits mandated by law and this policy is merely complementary to the existing legal guidelines.

SCOPE: This company sick leave policy applies to all our employees (full-time, part-time, or contract) who have been with our company for at least 6 months. It is separate from other types of leave.

PROCEDURAL REQUIREMENTS:

• Notification of sick leave: Employees must notify their immediate supervisor of their inability to work using manager specified procedure 
• Return to work from sick leave: Employees must notify their manager when reporting to work following their sick leave. Employee must provide a medical practitioner signed proof of illness notification for absences longer than 3 working days 
• Family health days: Each employee will be allowed a maximum of 10 days from their sick leave credits for tending to family illness concerns. Family is defined as, an employee’s parent, step-parent, child, step-child, brother, or sister 
• Medical appointments: Time off to attend personal medical appointments is allowed 
• Upon return to work, the employee must complete a signed employee absence record and submit it to their immediate manager in order to keep track

NON-COMPLIANCE: Non-compliance with this policy will be brought to the attention of the appropriate supervisor or HR manager for further action. All leaves will be handled with discretion.

Maternity Leave Policy Template

Sample Leave Policy Template Disclaimer: This is a sample policy that can be adapted for your workplace needs. Suggestions are given about what to include. However, items can be added or removed to suit your individual workplace needs. 

____________________________________________________________________________

Policy: Maternity/Paternity Leave Policy 

Policy #

Approver: 

Effective (insert date): 

Revised: 

____________________________________________________________________________

PURPOSE: This policy outlines our company’s provisions for all employees who are expecting a child and/or require time to care for and bond with their newborn.

POLICY STATEMENT: The eligibility of an employee will be assessed according to legislative guidelines and leave lasts upto ___ weeks. It falls to the company’s discretion to grant paid maternity leave or unpaid maternity leave for an employee deemed legally ineligible.

SCOPE: This company parental leave policy applies to all our employees (full-time, part-time, or contract) who have been with our company for at least 6 months. Individual circumstances will be considered.

PROCEDURAL REQUIREMENTS:

• Notification of parental leave: Employees must notify their immediate supervisor of their planned leave dates using a manager-specified procedure, at least 1 month prior to the leave. They must complete forms or submit a document stating the date of the expected childbirth and the desired beginning date of maternity leave (it must not be earlier than a specified number of weeks before childbirth)  
• Tenure: Depending on the legislation, an employee can begin their maternity leave prior to or after the expected date of childbirth
• All pregnant employees can utilize reasonable paid time off for any kind of prenatal care including but not limited to medical examinations
• All new mothers can petition for an extension of unpaid maternity leave on grounds of medical or other reasons that are subject to the company’s judgment (e.g. complications during pregnancy or childbirth may be cause for extension)
• Job responsibilities: The positions of employees and the benefits associated with them will not be affected during the maternity leave. However, the company may temporarily replace the position during that time
• Upon return to work the employee must complete a signed employee absence record and submit it to their immediate manager in order to keep track

NON-COMPLIANCE: Non-compliance with this policy will be brought to the attention of the appropriate supervisor or HR manager for further action. All leaves will be handled with discretion.

Parental Leave Policy Template

Sample Leave Policy Template Disclaimer: This is a sample policy that can be adapted for your workplace needs. Suggestions are given about what to include. However, items can be added or removed to suit your individual workplace needs. 

____________________________________________________________________________

Policy: Parental Leave Policy 

Policy #

Approver: 

Effective (insert date): 

Revised: 

____________________________________________________________________________

PURPOSE: This policy outlines our company’s provisions for all employees who are new parents expecting a child and/or require time to care for and bond with their newborn.

POLICY STATEMENT: The eligibility of an employee will be assessed according to legislative guidelines and leave lasts up to ___ weeks. It falls to the company’s discretion to grant paid maternity leave or unpaid maternity leave for an employee deemed legally ineligible.

SCOPE: This company parental leave policy applies to all our employees (full-time, part-time, or contract) who have been with our company for at least 6 months. Individual circumstances will be considered.

PROCEDURAL REQUIREMENTS:

• Notification of parental leave: Employees must notify their immediate supervisor of their planned leave dates using a manager-specified procedure, at least 1 month prior to the leave. They must complete forms or submit a document stating the date of the expected childbirth and the desired beginning date of parental leave (it must not be earlier than a specified number of weeks before childbirth)  
• Tenure: Depending on the legislation, an employee can begin their leave prior to or after the expected date of childbirth
• All pregnant employees can utilize reasonable paid time off for any kind of prenatal care including but not limited to medical examinations
• All new parents can petition for an extension of unpaid parental leave on grounds of medical or other reasons that are subject to the company’s judgment (e.g. complications during pregnancy or childbirth may be cause for extension)
• Job responsibilities: The positions of employees and the benefits associated with them will not be affected during parental leave. However, the company may temporarily replace the position during that time
• Upon return to work, the employee must complete a signed employee absence record and submit it to their immediate manager in order to keep track

NON-COMPLIANCE: Non-compliance with this policy will be brought to the attention of the appropriate supervisor or HR manager for further action. All leaves will be handled with discretion.

Paid Time Off/Annual Leave Policy Template

Sample Leave Policy Template Disclaimer: This is a sample policy that can be adapted for your workplace needs. Suggestions are given about what to include. However, items can be added or removed to suit your individual workplace needs. 

____________________________________________________________________________

Policy: Paid Time Off/Annual Leave Policy 

Policy #

Approver: 

Effective (insert date): 

Revised: 

____________________________________________________________________________

PURPOSE: This policy outlines our company’s provisions for the amount of time off we offer to our employees per calendar year or month. Paid time off can be considered equivalent to vacation time, but employees can use it in any way they want.

POLICY STATEMENT: We offer __ hours of Paid Time Off to our employees. These employees can use their PTO from the beginning of the year, without having to wait to accrue it. Part-time employees will also receive PTO on a pro-rata basis in the same fashion. 

SCOPE: This company annual leave policy applies to all our employees (full-time, part-time, or contract) who have been with our company for at least 6 months.

PROCEDURAL REQUIREMENTS:

• Notification of leave: Employees must notify their immediate supervisor of their planned leave dates using a manager-specified procedure, at least 2 weeks prior to the leave. 
• PTO accrual: The maximum amount of PTO hours you accrue is determined by your rate of accrual. Employees must ensure that they have enough accrued PTO available to cover the time off requested.
• Rollover to next year: We encourage employees to use their available PTO. If the available PTO is not used by the end of a calendar year, accrued, unused leave may carry over to the next year. 
• PTO pay: All PTO will be paid at the employee’s base rate at the time the leave is taken.
• Upon return to work, the employee must complete a signed employee absence record and submit it to their immediate manager in order to keep track

NON-COMPLIANCE: Non-compliance with this policy will be brought to the attention of the appropriate supervisor or HR manager for further action. All leaves will be handled with discretion.

Snigdha Gupta

An avid writer and aspiring marketer, Snigdha is a student at Concordia University’s John Molson School of Business.