How to Create Attendance Policy for Your Small Business

Many small business owners don’t want to create an attendance policy because it seems complicated. Everything is fine when you have fewer employees. You can manage them without those dreaded documents.

But an attendance policy isn’t simply a set of rules used to fire tardy employees. Instead, it helps employees understand their responsibilities and the consequences of policy violations. It helps you improve attendance and punctuality in your business so that productivity is not compromised.

Once your business starts to grow and you hire more staff, a proper attendance policy in place will be useful. Start thinking about it now!

In this post, we’ll show you how to create an attendance policy for your small business.

What is an attendance policy?

An attendance policy guides how your business deals with aspects related to employee attendance such as:

• Tardiness
• Leave and time off
• Job abandonment
• Early clock-outs
• No-call, no-shows

Policies are created to let staff know what they should and shouldn’t do. Business owners also know what actions to take whenever facing attendance issues.

How to create an effective attendance policy

Choose the right policies for your business

The right policies will depend on:

• The industry you’re in
• Business type
• Company culture
• Employees
• Job requirements

List out the policies you think are necessary for your business at the moment. You can always add or remove them later on.

Define tardiness and absences

You need to be clear about what tardiness and absences mean. Write out the definitions so employees know what they are.

For example, employees who are not present within 10 minutes after the official starting time of the shift will be considered late.

Create a system for tracking attendance

This system will include:

• How employees can clock in and clock out
• What methods you’ll use to track their attendance
• How you check if the clock-in/clock-out time is precise

Some businesses let employees punch in/punch out on their time cards. It’s simple and quick, but employees may forget their cards and you can’t check the preciseness of the punched time.

Some companies let the security guard record staff attendance. This may result in human mistakes or buddy punching. It’s hard to check the accuracy if you use this method.

A more reliable solution is to let employees clock in and out using digital devices. You can purchase digital time clocks or subscribe to attendance tracking apps. These solutions require your staff to record their attendance using GPS or fingerprints, so it’s more precise and reliable.

Specify situations in which last-minute absences are approved and documentations required

Specify the situations that last-minute absences are approved. Doctor visits, car accidents, for example.

It’s important to list out what documents employees have to submit to prove their absences are legitimate. For instance, medical notes, proof that they visit the doctor, etc.

You can also list out absence reasons that are considered excuses to avoid employees using unreasonable explanations for their sudden absenteeism.

List the steps for requesting leave and time off

Leave and time off are an inevitable part of employee attendance. Make sure your staff know every step they need to take in order to request leaves. What forms do they need to submit? How many days in advance do they have to send in the requests?

Some business owners put a box in their office for employees to put in the forms. Some ask employees to send in the requests via emails. Others use scheduling apps that allow employees to submit requests on the app, and employers just need to tap Deny or Approve.

Include disciplinary actions

One aspect you should never forget in your attendance policy is the consequences and disciplinary actions employees have to face if they violate the rules.

What types of warnings or actions will you take if employees disappear with no prior notice? How will you handle someone who’s late for 10 minutes and who’s late for 1 hour?

Even though this section exists to tell your staff not to do certain things, don’t go overboard and harsh. Being late for 10 minutes and losing a pay day is the fastest way to build resentment in employees.

Put attendance policy in your company handbook

The company handbook is another document that seems to be complicated and unnecessary for small businesses. But it exists to make sure your staff understand everything they need to know about your business’ expectations and requirements.

It’s necessary to start crafting a company handbook now. Start simple and add more stuff over time.

One tip for busy business owners to start writing a company handbook is to start with a TL;DR (too long; didn’t read) section. It’s short, straight to the point, and easy to understand.

Listing out some important bullet points will be less intimidating to both employers and employees. Employers don’t have to be daunted by the process of writing a long and complicated document. They can always come back to refine it and add more details later. At the same time, employees aren’t overwhelmed by all the rules and difficult words.

To confirm that employees have read and agreed to the policies and be prepared for legal disputes that may occur, you can request employees to sign handbook acknowledgment forms.

Review and revise attendance policy

It’s not enough to write down some rules and settle with them forever. Your business attendance policy should be reviewed and updated at least once a year. Add new rules, remove unnecessary ones, and make changes when needed.

This process is important because it ensures you can handle complex situations that arise, and maintain a fair and consistent implementation.

Integrate attendance policy with your scheduling system

Your attendance policy and scheduling system should go hand in hand with each other. How can you check if someone arrives on time? Do employees have to clock in? Using what methods?

Tip: It’s convenient to use automated and cloud-based apps because they turn any devices that employees use into a time clock, so they can clock in/clock out and you can check their attendance in real time.

Attendance policy examples

Here are some sample sentences to get you started:

1. Absence is when an employee does not show up for work according to his/her schedule.
2. Requirements for providing absence notice:

• Provide notice one week in advance if you are absent for one workday.
• Provide notice two weeks in advance if you are absent for two workdays.
• Provide notice two months in advance if you are absent for over five workday.
• For emergencies, notify your manager at least one hour before your shift.

3. A no-call, no-show is when an employee is absent without any prior notice and cannot be contacted.

4. Disciplinary actions:

• Excessive tardiness is defined as three or more occurrences of tardiness and will result in a written warning. 
• Two occurrences of no-call, no-show in a 12-month period are considered grounds for employment termination. 

How to handle common attendance problems

No-call, no-shows

You can either deduct these employees’ paychecks or terminate their employment if they attempt no-call, no-shows repeatedly. 

Remember to clarify how much pay will be deducted and how many repeated times of those behaviors will result in termination.

Job abandonment

Job abandonment occurs when an employee is absent for many consecutive days without any prior notice and you can’t contact them.

The difference between a no-call, no-show and job abandonment is whether the employee returns to work in the time range you’ve defined in your policy. 

For instance, if you define being absent for 4 consecutive days is job abandonment:

• Employee who disappears on Monday, Tuesday, Wednesday and then returns on Thursday is no-call, no-show. 
• Employee who disappears on Monday, Tuesday, Wednesday, Thursday and then returns on Friday is now job abandonment.

In your business attendance policy, include:

• How many consecutive days are considered job abandonment
• How you’ll handle job abandonment
• State that job abandonment is voluntary termination. Voluntary and involuntary termination can influence your next actions in terms of taxes, benefits, etc. 

Remember to stay compliant with the local, state, and federal laws, or consult a lawyer to avoid violating employees’ rights.

How to handle tardiness and absenteeism

Tardiness

1. Implement a zero tolerance policy, stating that you won’t tolerate tardiness and employees will face specific disciplinary actions if they’re late for work.
2. You can choose to allow the first offense to be disciplined with only a warning and no consequences. After that first offense, employees will have to face more serious disciplinary actions.
3. If your business doesn’t require employees to be exactly on time, you can allow staff to make up for the late period of time after official work hours or during break.

Absenteeism

1. Implement a zero tolerance policy in which you won’t tolerate unannounced absenteeism and employees will face disciplinary actions or termination if they’re absent without notifying their manager.
2. Let employees find their own shift replacements.
3. Certain absences due to emergencies can be acceptable as long as employees can provide proof or documentation.
4. Deduct paid time off of employees.

The point system

Using the point system is a clear and defined way to control attendance problems. 

The general principle of this system is simple: every time employees violate the attendance policy, they’re issued a certain number of points.

You can define the points and the corresponding disciplinary actions depending on your business:

• No-call, no-show: 2 points
• Late for more than 10 minutes: 0.5 point

• 2 points: written warning
• 3 points: verbal warning
• 4 points: deduct paycheck
• 5 points: termination

Employees can keep track of their points to avoid further policy violations, while you have a fair and consistent system to handle attendance issues.

You can let employees reset their points after every 3 months, 6 months, or 12 months. Resetting points after a certain period of time is a good way to relieve that disciplinary burden on their shoulders. Sometimes they are late because it’s a one-time accident, and tardiness is not their usual behavior.

Create attendance policy for your small business today

You don’t have to wait until your business grows bigger to create an attendance policy.

Take some time to craft an attendance policy even when you’re running a small business.

You’ll see that staff will be more responsible for their behaviors. And the next time someone is late again, you aren’t influenced by emotions anymore. You know exactly what to do.