Part 1
Start with the leave types you offer
Most organisations combine statutory leave (such as maternity leave and public holidays) with company-defined leave. Check the labour and employment rules of every country or region you operate in, then add what your culture supports.
- Casual leave for short, unplanned personal needs.
- Sick leave, with a rule on when a medical certificate is needed.
- Earned or privilege leave that accrues with service.
- Maternity, adoption, and any paternity or parental leave you choose to offer.
- Optional holidays, compensatory off, and leave without pay.
Part 2
Define accrual and balances
- How many days each leave type provides and whether they are credited upfront or monthly.
- Whether new joiners get a pro-rated balance in their first year.
- How weekends and holidays inside a leave period are counted.
Part 3
Make approval simple
- Who approves (the reporting manager, with HR as back-up) and how long they have to respond.
- How much notice is expected for planned leave, and what counts as an emergency.
- Whether long leave needs additional sign-off.
Part 4
Carry-forward and encashment
State plainly which leave lapses at year end, what carries forward and up to what limit, and which leave can be encashed (usually on exit or at a set cap). Ambiguity here is the most common source of employee disputes.
Part 5
Review it every year
Update the policy when laws change or when you notice patterns - for example, many unplanned leaves on Mondays may point to workload or morale issues rather than a policy gap.