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Why Your Small Business Needs an Attendance Policy (+ Sample Attendance Policy Template)

Skye Schooley
Skye Schooley

An effective time and attendance policy spells out your expectations for your employees' attendance and the consequences for failing to meet them.

An effective attendance policy is essential to the productivity of your small business. But before you develop one, consider the structure and culture of your organization. Even if attendance isn’t a problem at your company, a defined policy can keep your business organized and improve communication with your employees. You want to create an employee attendance policy that employees adapt to naturally and that serves your purposes as a business owner. That means finding a policy that works best for everyone.

Editor’s note: Looking for the right time and attendance system for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

What is an attendance policy?

An attendance policy defines when employees should arrive and leave throughout your defined workweek. It explains clear violations – like arriving late, being absent or leaving early – and provides the logic and reasoning behind the development and enforcement of the policy. Specifically, it should define when employees need to be at work and how they should report their arrival and departure. This can apply to typical 9-to-5 Monday-Friday jobs as well as shift-based employment, for which rotating schedules are more common.

After defining the details, outline the disciplinary system behind the policy. Some companies operate on a warning system, in which employees are given one or two warnings before having a discussion with a manager about attendance. Others use a point-based system, in which workers accrue points if they are absent without approval, if they arrive late or if they leave early. When the point limit is reached, the employee is terminated or suspended, or another disciplinary action is taken.

The policy should also distinguish between acceptable and unacceptable absences. Create definitions and examples for tardiness, sick days, unexcused absences and paid time off.


Develop a protocol for employees to report absences when they are unable to attend work that day.

Why your business needs an attendance policy

Although the exact terms and flexibility of your attendance policy will depend on your business and company culture, it is essential to have a written policy. In addition to being good practice, a well-thought-out attendance policy can have several benefits.

1. It can save you money.

It may be easy to dismiss tardiness or overlook occasional absences, but the costs can add up for your business. Productivity losses from missed work cost U.S. businesses roughly $1,685 per employee each year, for a total of $225.8 billion, according to a report from the Society for Human Resource Management.

2. It sets expectations and minimizes employee absences.

By creating a defined attendance policy, you can hold employees accountable and reduce problems within your business. It’s also just good business practice. By being transparent about employee attendance, lateness and other time and attendance protocols, you’re getting ahead of problems and setting important standards early on. Additionally, the policy tells employees how and who to notify if they are going to be tardy or absent. Then you can find the appropriate coverage before it becomes a problem.

Did You Know?

According to the U.S. Bureau of Labor Statistics, the average absenteeism rate for full-time workers is roughly 3%, although this can vary by industry.

3. It can improve productivity.

In the age of remote work, attendance policies can be essential for holding employees and managers accountable for productivity. In your policy, include a section addressing remote work expectations. Outline when employees should be online and for how long, as well as any other considerations related to staying productive from home.

How to write an attendance policy

Writing a good attendance policy starts with evaluating your organization’s culture and needs. Consider your employees and the type of business environment you’ve created. By defining your overall culture, you can make better decisions as you flesh out a full-fledged attendance policy. Follow these steps to ensure your policy is comprehensive and effective.

1. Create relevant definitions.

Start by defining the following terms relative to your business’s situation: tardiness, unexcused absence, excused absence, sick leave and paid time off. For example, tardiness could mean clocking in more than 10 minutes late.

2. Create employee protocols.

You need standard processes in place that apply to all of your workers when they are requesting time off, sick, or going to be late. Create a fair policy that outlines how employees should alert managers and states what happens if employees fail to show up for work without warning.

3. Draft your plan.

Once you’ve outlined the important definitions and protocols, draft your attendance policy. Create multiple sections to address potential scenarios. Add distinctions for workers and managers, if necessary. Also consider exemptions, like absences for jury duty or related to the Americans with Disabilities Act (ADA). While a defined policy is important, it shouldn’t be weaponized against your employees but rather used to protect them.

4. Collaborate with employees.

Depending on your situation, when your plan is done, you may want to send it to employees and provide a grace period for them to review it. Set a meeting to discuss any concerns or requests. You want to create a policy that fits your business, not one that causes workers to quit.

5. Enact the plan.

Once your workers have had a chance to review and respond to your new policy, enact your plan. Make sure both new and existing workers have access to it. If there are violations, enforce the policy fairly and consistently among your entire staff.


To keep your attendance policy accurate and relevant, review it at least once a year.

Attendance policy template

Now that you have a general understanding of how to create a small business attendance policy, here is a basic template you can use as a starting point: 

1. Introduction

Employees of [company name] are expected to arrive on time for scheduled shifts and workdays throughout the appropriate workweek. Productivity is threatened when workers are late and absent, and it’s essential to [company name]‘s continuation for employees to be on time and respectful of work times.

2. Attendance policy

[Define here whether you want to use a points system for absences, lateness and early departures. Below is a template for an attendance policy that does not involve points.]

The following are considered infractions for [company name]‘s attendance policy:

  • Absence without a call
  • Absence without prior warning
  • Lateness
  • Departure before a shift’s official end
  • Late returns from lunch or break

If employees are going to be sick or absent, they need to call their respective manager at least [amount of time] before the official start time of their shift. Employees are granted [number] sick days per year, which will not roll over between years of employment.

Absence without a call or notification from an employee will result in an immediate conversation with the respective manager and could result in [consequence]. [Number] absences without a call will result in [consequence].

Lateness is defined as a failure to clock in within [number] minutes of an employee’s official shift start time. Lateness can also apply to when employees clock in after breaks or lunch, but the grace period will only be [number] minutes. Keep in mind that when an employee clocks in will also be directly reflected in their paycheck. After [number] instances of tardiness, an employee will have to speak with a manager about the problem. If there are another [number] instances of tardiness after that conversation, the employee will be terminated. Lateness will be counted on a [frequency] basis.

Leaving before a shift’s official end is prohibited, unless otherwise approved by a manager. If an employee leaves at least [amount of time] before the end of their shift, this will be counted as being late. If a worker has to leave because they are sick, this will count toward the overall number of sick days that worker has.

3. Policy exemptions

Bereavement, jury duty and military duty are all exemptions from disciplinary action, as are FMLA- and ADA-related absences. In the case of bereavement, jury duty and military duty, employees must speak to their managers within [amount of time] of the absence.

How to track employee time and attendance

Tracking employee time and attendance is a crucial step in monitoring absenteeism and enforcing your business’s attendance policy. For small businesses, time and attendance software is likely the best bet for keeping all of the information about your business on track. These software systems provide companies with simple online solutions for employees to punch in and out.

To track your employees’ time and attendance, you will need to identify your tracking needs and then choose a time and attendance system that meets those needs.

1. Identify your tracking needs.

There are several great time and attendance systems on the market, so choosing the best one for your business depends on what features are most important to you. For example, this software can make it easy to organize employee shifts, and you can often build your accounting or payroll software into your workflow to easily compensate employees for their time. Many programs also include advanced features, such as GPS-enabled clocking in, so you know where your employees are clocking in or out from.

Other features include mobile punching, job and project tracking, time-off management, and the ability to create reports. They can also let you set alerts when employees are nearing overtime, showing up late or leaving early. Many time and attendance systems integrate with other popular programs, like top accounting software.

2. Research and choose a time and attendance system.

When choosing a time and attendance system, it is important to research and compare your options based on factors like cost, features, hardware and customer support. To get you started, we spent hours conducting this exact research for you. Here are three of our favorite options:

  • QuickBooks Time: This robust time and attendance solution is best for businesses with mobile workforces. It offers a mobile clock-in/out option, geofencing, live GPS tracking, shift scheduling, and extensive job and expense tracking features. QuickBooks offers several other in-house HR solutions, or you can integrate QuickBooks Time with a variety of other third-party applications. 
  • When I Work: This affordable time and attendance solution is best for restaurants and retail businesses. When I Work has scheduling tools that many competitors lack. You can use drag-and-drop shift scheduling tools, set up automated scheduling, allow shift bidding and shift trading, and manage time-off requests. You can also require photo clock-ins (to prevent “buddy punching”) and track attendance for multiple locations. If you want to learn more, check out our When I Work review.
  • Paychex Flex: This comprehensive time and attendance solution is best for those who want an all-in-one HR solution with time-tracking features. As a Paychex user, you can access one comprehensive platform that easily integrates with several other Paychex HR solutions (e.g., hiring and onboarding services, payroll, employee benefits, business insurance, and HR compliance assistance). With these options, in addition to Paychex’s time and attendance features (e.g., advanced punch-in options, visual schedulers and templates, geotechnology, time-off management, job costing, and analytics), you can maintain all employee data in one location. If you want to learn more, check out our Paychex Flex review.

Matt D’Angelo contributed to the writing and research in this article.

Image Credit: fizkes / Getty Images
Skye Schooley
Skye Schooley
Staff Writer
Skye Schooley is a human resources writer at and Business News Daily, where she has researched and written more than 300 articles on HR-focused topics including human resources operations, management leadership, and HR technology. In addition to researching and analyzing products and services that help business owners run a smoother human resources department, such as HR software, PEOs, HROs, employee monitoring software and time and attendance systems, Skye investigates and writes on topics aimed at building better professional culture, like protecting employee privacy, managing human capital, improving communication, and fostering workplace diversity and culture.