How to Craft a Sick/Vacation Leave Policy for Your Contracting Business

One of the things that the pandemic highlighted for businesses is that they really need a leave policy, particularly for sickness but also for vacation. If you don’t have a way of determining how you will take time off, you’ll have a hard time establishing a protocol for employees as well. Here are a few factors to consider as you create a policy.

Mandatory Leave Requirements
Before creating a leave policy, you should start by investigating the laws in your area. Leave requirements are usually set by the state, but they may also be dictated by the city, industry and in some cases, the project. For example, the state of California requires that employers provide at least a few days of paid sick leave per year. Any limits that you set must meet all minimum guidelines.

Reasonable Leave Expectations
Once you know the minimum requirements, you can start to come up with ideas for the amount of leave that seems reasonable. Laws dictate a bare minimum, and many companies choose to offer more. Use your own experience as a guide, but be wary of assuming that everyone has the same health and obligations that you do. You should also keep in mind that many employees may need to take leave in order to care for sick members of their family, especially children. Offering them a few more days than required can help to ensure that while they are working, you have their full focus.

Flexibility vs. Predictability
Ultimately, your leave policy should balance flexibility with predictability. Flexibility means that you can allow employees to take time off when they need it. Predictability means that you know you will be able to work on a project on any given day. Of course, people cannot always anticipate when they are likely to need sick leave. But you can feel free to set reasonable limits on other types of leave, as long as they meet local laws. For example, you may choose to require employees to request leave a certain number of days in advance. Then, if someone has an unusual situation, you can handle it on a case-by-case basis.

Leave Accrual and Tracking Systems
Your leave accrual and tracking system can only be as effective as you are willing to invest in it. If you allow employees to accrue six days of paid sick leave per year, you must keep track of it. When they use a portion of those hours, you must track that as well. Remember that there are also laws dictating the limits you can set on the amount of leave that employees can accrue. In some cases, you may be required to compensate employees who leave the job with hours remaining. If you have a few employees, it may not be too difficult to keep track of it in-house or even on your own time. Once you expand beyond that, or if you are struggling to keep ahead of it, it may be worth investing in an automated system.

Published Guidelines
Once you finalize your leave policy, you may want to hire a lawyer with experience in this aspect of employment to review your documentation and confirm that everything meets current state, local and industry-specific guidelines. A lawyer can help you clarify your language so that it is easy to understand and unambiguous. Then, the last step you have to take is to make your leave policy easily accessible to employees. For example, you can hand it out when someone accepts a job. You can also keep a handbook of company policies that employees can review whenever they need to. This step provides transparency and may help employees answer their own questions.

Leave policies are becoming more popular, especially as employers realize that allowing sick employees to stay home can help their bottom line. These policies are sometimes hard to negotiate, but you’ll be glad you put in the work. For more guidance on the things you need to run a successful contracting business, contact CSLS today!