What are the Different Types of Leave & Attendance Policy and How do they Affect any Business?

What is Leave?

The term Leave refers to the absence or a vacation from work. Technically, it is a term used to describe a period of time that one has to be away from the primary job while maintaining the status of the employee. This term is in contrast to normal periods away from the workplace such as vacations, holidays and sabbaticals.

Different types of leave: In general, Organizations have the following types of leave apart from general holidays:

Earned leave (EL, also called privilege leave PL)
Sick leave (SL)
Casual leave (CL)
Leave without pay (LWP)
Maternity leave (ML)
Paternity leave
Compensatory Off

Leave Policy

Every organization needs a leave management system policy that is tailored to its need and culture. There are also statutory rules from the government that need to be taken into consideration. A good leave policy is simple, easy to administer, fair to all employees and compliant with the statutory requirements. Employees need to be made aware of the Leave Policy. HR has to ensure that the same should be accessible to them when they want to check for availing of any leave.

Leave Rules

Once you have identified the types of leave an employee can take, you need to define various rules for each leave type.

Grant/entitlement quantum of leave to be granted, how often and when.
Availing rules how often an employee can avail a leave, limits, restrictions, etc.
Eligibility who is entitled to this type of leave. Approvals who can approve and approval limits.
Year-end activity carrying forward of leaves up to a maximum limit, lapses, etc.
Encashment
For Sick Leave, Maternity Leave, etc. additional documentation to be maintained. HR needs to ensure that all documents are available.

Leave Without Pay: Leave without pay (LWOP) is a temporary non-pay status and absence from duty that, in most cases, is granted at the employee’s request. For those days, the employee’s salary is not paid or is under Loss of Pay. In some organizations, it also called LOP or Loss of Pay.

Granting Leave: Leave requests, both paid and unpaid, should be granted or can be denied as per company’s policy, including any requirements related to eligibility for leave, and other company policies. Decisions to grant or deny leave must be based on the same criteria for all, and be based on the same determinations as decisions to grant leave for any other reason.

Leave Period End Activity: Most companies follow either calendar year or financial year for leave accounting. Once the leave year is completed all transactions for that year are to be completed Based on the company policy, an employee may request for encasing their leaves. HR needs to facilitate this. New transactions are disallowed later for the closed year. Accounts team will need the balances of leave for each employee every month.

Attendance Concept

Shifts: Typically day divided into a set of time periods during which different groups of employee perform their duties

Shift Roster: Shift roster is a list of employees, and associated information e.g. location, working times, responsibilities for a given time period e.g. week, month or sports season.

Muster Roll: All organizations, typically maintain a register with a list of all employees. Office clerk or front office person records each of employees’ attendance status or else integrated system automatically update it. It could be Full Day Present, Half Day Present, Absent, Leave, Week Off, and Holiday.

Attendance Policy

To regulate the attendance management system process and to ensure that production and other operational activities are running smoothly, companies set up attendance policy. OR we can say that Shift timings, week off, the definition of hours required for considering full day/half day presence of employees, overtime rules, etc., together are termed as Attendance Policy.

Following are the responsibilities of the HR manager regarding attendance:

Ensure that all employees are fully aware of the organization’s policies and procedures for dealing with the absence.
Be the first point of contact when an employee phones in sick.
Maintain appropriately detailed, accurate, and up-to-date absence records for their staff.
Identify any patterns or trends of absences which cause concern.
Conduct return-to-work interviews.
Implement disciplinary procedures where necessary.

Attendance Regularization

This is a process to regularize employee attendance (i.e. request for a change in Attendance Status). This is typically used when an employee has a mismatched swipe/punch or has forgotten to swipe/punch for the day. In the Payroll software process, the employee applies for Attendance Regularization and the concerned Manager needs to approve the same. Once approved, the status of the employee for the day will be marked as Present during the attendance processing work-flow.