Drafting a Sick Time Policy for Your Small Business

Does your business offer sick time to employees? One study showed that having a paid sick time policy can help reduce turnover by 50%. If you want to attract and retain top talent, boost productivity, and reduce the spread of sickness in your workplace, consider drafting a sick time policy for small business.

What should you include in your sick time policy?

A sick time policy outlines guidelines and procedures for staff on sick time eligibility, how it accrues (if applicable), what they can use sick time for, and how to request it. Sick time is typically earned by employees as they work.

Sick leave is generally a longer period of time. It is time off an employee can take if they or a family member are sick. Oftentimes, sick leave and sick time go hand in hand.

Although sick time off policies vary from business to business, they typically include the following sections:

Employee eligibility Accrual rate Uses Sick time requests Unused sick time rules Employee eligibility

In this section, clarify which employees are eligible for paid sick time. Eligibility for sick time can depend on:

The employee’s role Number of hours the employee works How long the employee has worked for the company

Based on your state, you may be able to limit sick time to employees with certain job roles and duties (e.g., service workers). And depending on the state your business is in, employees may need to work a certain number of hours to qualify for paid sick leave.

In addition, you can require employees to work for the business for a certain number of days before they’re eligible. For example, you may require employees to work for your business for 90 days before they can be eligible to begin accruing paid sick time.

Accrual rate

Your policy should include how much sick time or leave an employee can accrue and how the accrual process works.

Sick time generally accrues based on the number of hours an employee works. Some states require paid sick time accrual for employees. Accrual rates, caps, and laws vary from state to state. For example, in Arizona, employees at eligible businesses accrue one hour of paid sick leave for every 30 hours worked.

If you offer sick time to employees outside of mandatory paid sick leave, determine an accrual rate, cap, and how long employees have to wait before using earned sick time. You should also decide if you want sick time to accrue gradually or offer it as a lump sum at the beginning of the year.


You don’t want your employee to be able to use sick time all willy nilly. They have to have a legitimate reason when they use it.

When drafting your policy, include a section that lists out what employees can use sick time for. Here are a few examples of uses for employee sick time:

Common cold / flu symptoms Stomach bug / food poisoning Taking care of an ill family member (e.g., spouse, parent, or child) Mental health Doctor’s appointment Other illnesses or medical issues

Along with having a list of reasons for using sick time, include what sick time can’t be used for. Don’t forget to include disciplinary actions you will take if an employee misuses sick time.

Sick time requests

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