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Sick Leave Policy: A 6-Step Guide For Employers

  • Workforce Management Software
  • 10 min read
  • February 21, 2024

Sick Leave Policy

A well-structured sick leave policy is essential to keep your workforce safe and ensure maximum productivity. Developing a sick leave policy, where the attendance expectations and the pay eligibility are clearly defined, helps establish trust between the employer and the employee.

An intelligent policy not only provides evidence of your concern for your workers’ well-being but also forces employees to have an honest work ethic while ensuring high attendance standards.

Ask local employment laws in your area, seek a legal review of the policy, and ensure proper communication on the policy is given. As necessary, the policy must be updated to offer a suitable pattern of annual sick pay. Through this guide, you can create a promising approach for your organization.

Here’s all you need to know about establishing India’s best sick leave policy.

What is Sick Leave?

Sick leave is a type of leave that allows employees to take time off from work when they are not okay, ill, or injured. Sick leave is typically provided by companies as part of their benefits package and is intended to ensure that employees can take the necessary time off to recover from illness. It ultimately helps employees rest and doesn’t hamper productivity.

Sick leave policies vary depending on the employer. They may include provisions for paid or unpaid time off, the amount of sick leave accrued or allotted per year, and any documentation required to substantiate the need for sick leave, such as a doctor’s note.

What Are The Sick Leave Rules For Private Company Employees?

Sick leave policies in private companies typically entail the accrual of leave days per pay period or year, intended for an employee’s illness, or medical appointments. In this case, a prescription, such as a doctor’s note, may be necessary for extended absences or specific illnesses.

Whether sick leave is paid or unpaid varies among companies, with some providing it as a benefit and others requiring the use of vacation or personal time. Legal requirements concerning sick leave also influence policies, dictating minimum amounts of leave and whether it must be compensated.

6 Steps to Establish the Sick Leave Policy

6 Steps to Establish the Sick Leave Policy

1. Define The Policy Coverage

The first step would be to identify employees who are eligible for paid and unpaid leaves based on sick leave rules in India. The regular employees get sick pay payments, but the part-time and nonpermanent employees do not. On the other hand, local leave laws may require you to offer paid sick leave for part-time and temporary workers. The paid sick leave policy must be in accordance with the sick pay legislation that is applicable in your area.

Download Sick Leave Policy

Note: You can download directly from here and edit as per your need.

2. Determine The Number Of Paid Sick Leaves Policy Options

Second, establish the number of paid sick days that a full-time employee can take in a year. One of the traditional practices is providing 5-10 days of paid leave/days of sick leaves per annum on a paid basis. When choosing a number, consider benchmarks in your industry and location. According to the local sick pay laws, there is a minimum number of paid sick days that you will have to give. The policy you adopt should be equal or higher than the given minimum.

Make it clear to explain the process of sick day accrual. One way is for employees to accumulate one sick day for every month of service. In other words, sick days may be given in full annual amounts at the start of each year.

Designate any conditions on the transfer of unused sick days into subsequent years. In addition, also indicate if employees are paid for days that were left unused and they leave the moment their employment is ceasing. Some companies also provide an unlimited sick leave policy for the employee.

3. Define Usage Rules Of Sick Leave

Define specific rules on the possible use of sick days. For example, mandate workers to alert managers an hour to the start of their shift. Deny the employee to use sick time for any other reason other than for a legitimate sick day, injury, or medical appointment.

Explain what kind of medical certification is necessary while on a leave that lasts longer than 3 days. Prevent the use of sick days on days before or after holidays without a doctor’s note.

4. Explain Pay Calculation

Take a look at the manner in which employees’ sick pays are computed. Typical sick pay is the amount received instead of the base wage which is the hourly rate multiplied by the work hours lost due to sickness of the person.

The employees need to use sick time in hourly units that correspond to their actual absence. The pay does not encompass any overtime or any bonus. You can check out a generic sick leaves policy template to know what to include in yours.

Read more : How To Manage Different Types Of Leave Easily With HRMS Software?

5. Address Excessive Absenteeism

Your policy should be used to control abuse of sick leave. The measures that can be used as a disciplinary action include verbal and written warning, probation in the form of absence, sick leave, and ultimately termination of service.

Demand a doctor’s note for each absence if the employee is suspected of abuse of absenteeism.

6. Integrate With Other Policies

Establish the integration with similar attendance policies like the vacation, paid time off, and FMLA leaves. Sick pay usually comes from your general pool of paid time off. Make it clear that sick pay is paid in parallel with any short-term disability insurance benefits. Work with your FMLA policy on the longer-term medical leave when it is appropriate.


Establish the best sick leaves policy for professional excellence.

Click here to start your workplace policy enhancement process now!

You can download the document from the HR toolkit as well, and get HRMS for your business.

How to Educate Your Workforce About the Sick Leave Policy

Workforce About Sick Leave Policy

From answering the common FAQs like “how to apply for sick leave”, to the HR basics of a sick leave policy in India, here’s what you need to keep in mind!

Describe Confidentiality Practices

Clarify how medical information privacy is protected. It should be noted that direct supervisors may be aware of use of sick days and may be requested to keep track of the pattern of absences. Note that medical records will be kept in a restricted confidential file that can only be accessed by members of HR.

How To Apply Sick Leave In Company?

Elaborate on the proper steps that must be followed by employees when applying for a sick day. Specify the lead time given for an advance notice, manager/supervisor, who needs to be informed, and indicate if the form or note from the doctor is needed.

Share protocols for communicating with symptoms in quarantine to facilitate infection control. You can also check out employee sick leave policy sample from free HR Toolkit ideas for more details.

Specify Contact Information

Indicate who employees should contact when they have inquiries regarding your policy on sick leave.

Include the contact information of the HR department, administrative support staff, and managers. Ensure that employees know what to do if they have to call in sick.

Promote The Policy

After you decide on sick leaves, please communicate it to the employees in a positive way. Stress the policy in the employee manual and orientation materials for new employees.

Place key information on office bulletin boards, company intranet, and other websites often visited. Prior to the flu season, it is advisable to send messages to employees as a reminder of the policy.

Train Managers

Train managers and supervisors in the appropriate way of implementing the sick leave procedures. Provide training on monitoring sick time, addressing attendance issues, and addressing requests for sick pay.

Train leaders to make the verification of medical staff necessary from their employees whenever it is required. Ensure that the managers are educated on different types of sick leaves options. You can include a sick leave policy template for better understanding.

Allow Sick Leaves Donation

The idea of giving away sick time as a donation to keep staff healthy may be considered. It is possible that employees may donate some of their sick days that are still unused until their colleagues who have serious disease or have been injured. This provides them with the opportunity to receive full sick payment while on leave.

Employee Sick Leave Policy Sample

Sick Leave Policy Sample

Employee Sick Leave Policy Template

Sick Leave Policy Template

How To Calculate Sick Leave On Payroll?

Calculating sick leave in payroll involves tracking accrued leave, and working hours counting and determining compensation. First, establish the sick leave policy, typically based on hours worked. Then, monitor accrued sick leave balances for each employee. When an employee takes sick leave, record the duration of absence and calculate their sick leave pay, adhering to company policy and legal requirements. Subtract the used sick leave hours from the leave balance and update records accordingly.

Accurate calculation is crucial for fair compensation and regulatory compliance. Utilizing payroll software or spreadsheets can streamline the process and minimize errors. By implementing leave and time tracking and calculation procedures, employers can effectively manage sick leave entitlements, ensuring employees receive appropriate compensation while adhering to company policies and legal obligations.


Automate the monitoring of absenteeism and use of sick days through your payroll system. Check for trends in repeated absences, persistent illnesses, and overutilization by specific staff members. Contact employees who you believe are abusing sick days to try and correct the issue through warnings! But most importantly, establish the sick leaves policy that’s a perfect fit for your business.

Looking for HRMS software that’s equipped with a large, medium, and small enterprise startup HR toolkit? Look no further than Superworks! From an employee sick leave policy template to leave management, get it all in one place with us. Reach out to us today for more details! Switch to the best workforce management software with Superworks today!

Written By :

Alpesh Vaghasiya

The founder & CEO of Superworks, I'm on a mission to help small and medium-sized companies to grow to the next level of accomplishments. With a distinctive knowledge of authentic strategies and team-leading skills, my mission has always been to grow businesses digitally. The core mission of Superworks is Connecting people, Optimizing the process, Enhancing performance.


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