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

Matt D'Angelo
Matt D'Angelo

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 begin developing an attendance policy, it's important to 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 to work 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 when they arrive and leave. This can apply to typical 9-to-5 workweek jobs, as well as to shift-based employment for which rotating schedules are more common.

Although defining the details is the crucial first step in developing the right attendance policy, you'll also have to 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 receive a certain amount of leave time that garners points. 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 (PTO). You should also develop a protocol for employees to report absences when they are unable to attend work that day.

Why your business needs an attendance policy

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.

By creating a defined attendance policy, you can hold employees accountable and reduce problems within your business. It's also just a 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.

In the age of remote working, attendance policies can become essential for holding employees and managers accountable for productivity. In your policy, include a section that addresses 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 begin to 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 time and paid time off. For example, tardiness could mean clocking in more than 10 minutes late.

2.  Create employee protocols.

If an employee is going to be late, is sick or is requesting time off, there needs to be standard processes in place that apply to all of your workers. Create a fair policy that outlines how employees should alert managers if they're sick or going to be late and that states what happens if employees fail to show up for work.

3.  Draft your plan.

Once you have important definitions and protocols outlined, draft your attendance policy. Create multiple sections to address potential scenarios. Add distinctions for workers and managers, if necessary. Also consider exemptions, like jury duty or Americans with Disabilities Act-related absences. Keep in mind that, while it's important to have a defined policy, 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 adjustments employees request. You want to create a policy that fits your business, not one that causes workers to quit.

5.  Sign off on and 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.

Attendance policy template

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

A. 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. 

B. 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 be also directly reflected in a paycheck. After [number] instances of tardiness, an employee will have to speak with a manager about the problem. If there's 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 sick days that worker has. 

C. 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 have to 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 the business in check. These software systems provide companies with simple online solutions for employees to punch in and out.

This software makes it easy to organize employee shifts, and you can often build your accounting or payroll software into your workflow so that you can easily compensate employees for their time. Many programs also include advanced features, such as GPS-enabled clocking in, so you can know where your employees are clocking in or out from. Other features also allow for employees to clock in and out from their mobile device.

By using a time and attendance system, you can accurately track employee schedules and get a better understanding of your employees' work habits. It can also allow you to hold employees accountable and enforce your attendance policy.

Image Credit: fizkes / Getty Images
Matt D'Angelo
Matt D'Angelo Contributing Writer
I've worked for newspapers, magazines and various online platforms as both a writer and copy editor. Currently, I am a freelance writer living in NYC. I cover various small business topics, including technology, financing and marketing on and Business News Daily.