The SME owner's guide to effective sick leave management

Managing sick leave as a small business owner may seem daunting.

There are a range of laws, regulations, and employee entitlements that employers need to adhere to. And on top of this, unplanned absences may put additional strain on your business operations.

In this post, you’ll get a full breakdown of the different kinds of sick leave including casual sick leave, how to manage sick leave as a small business owner, and how BrightHR software can help you manage unplanned absences of casual staff.

Types of sick leave and employer obligations

Employees have various entitlements to leave and absence throughout their time in your business.

In Australia, all employees apart from casual workers are entitled to paid sick and carer’s leave.

• An employee can take paid sick leave when they’re unable to work as a result of personal illness or injury. This entitlement covers stress and pregnancy-related sickness as well.
  
• Paid carer’s leave, on the other hand, can be taken by eligible employees when they need to care for an immediate family member or member of their household who is sick, injured, or experienced another unexpected emergency.

But like we touched on earlier, an employee’s entitlement to sick leave will vary depending on their mode of employment. This means that full-time employees will have different entitlements from part-time employees, and casual staff entitlements will also differ from them both.

Entitlements for full-time employees

In line with the National Employment Standards (NES), full-time, Australian employees receive 10 days of paid sick and carer’s leave per year.

Paid sick leave is a different entitlement from annual leave and must be treated differently by employers.

Sick leave can only be applied when the employee is unfit for work as they are suffering from injury or illness. Or if they are caring for someone in their household or immediate family.

Annual leave can be taken at any time agreed upon by the employer and employee. Employers may outline their annual leave policies and processes for approving annual leave requests in employee handbooks or contracts.

Paid sick or carer’s leave will, however, need be taken as needed by the employee without much prior notice.

It’s work noting that unused sick leave entitlements are carried over to the next year and accrued.

Entitlements for part-time employees

Sick leave for part-time employees is calculated on a pro-rata basis. But what does this mean?

Under the NES, a pro rata amount of sick leave should be based on the number of ordinary hours worked in a two-week fortnightly period.

This could be viewed as 1/26th of the employee’s ordinary hours of work in a year, per year of service.  Sick leave for part time employees accrues progressively throughout the year and untaken leave accrues and rolls over into the next year just like it does for full-time employees.

Sick leave must be accrued, and taken, in hours.

Entitlements for casual employees

As there are such firm definitions of different types of employees in Australia, let’s talk about how casual employees are categorised before we discuss casual sick leave entitlements.

You’ll have casual employees in your business if they meet the below criteria:

• The employee has been offered a job
• You have not given firm advance commitment that the work will continue indefinitely
• The employee has accepted the role knowing there is no firm advanced commitment of continued work

Given the nature of their employment, unlike full and part-time employees, casual employees are not offered paid sick leave, but they are entitled to be absent from work for up to two days per occasion in the case of unexpected circumstances.

Managing sick leave requests

Unexpected injury and illness are a part of life. Although we’d love to minimise the disruptions these absences cause businesses as much as possible, there is still a fair and legally complaint way of managing sick leave requests from your staff.

The first thing you need to do as an employer is set the expectation early with your employees on how much notice and evidence you require if they call in sick.

Let’s dive into these aspects below:

• Notice periods 

To avoid disruption to your business, it’s important to set the expectation with your staff that they notify you as soon as possible if they cannot make it to work due to illness. This will give you time to find a replacement for their shift and plan for the day ahead if you are understaffed.

You should have policies and procedures in place for the ways in which they notify you as well. An employee could call you, send a text message or email you, but it’s up to you to decide how you’d like them to notify you.

Understand that unforeseen circumstances may prevent immediate notification. In such cases, encourage employees to notify you at their earliest convenience. 

Your workplace policy can outline specific expectations around notice periods. 

• Evidence requirements 

While you can request evidence to support a sick and carer's leave request, the Fair Work Ombudsman advises a balanced approach.

For short absences, a self-declaration may suffice. For longer absences, a medical certificate might be more appropriate.  

If regular, unexpected absences start cropping up with particular employees, you may want to ask for a doctor’s certificate as proof of their illness. For longer, prolonged absences you may find it best to conduct a return-to-work interview to make sure your employee is fit to resume their workload.

Best practices for sick leave management

Understanding how to compliantly manage sick and carer's leave regulations is critical for small business owners to avoid hefty fines and penalties.

So, to be sure you remain compliant, here are your responsibilities when it comes to managing sick leave requests from your team:

• Providing paid leave

The first step is to ensure you provide your staff their required hours of sick leave. This includes full-time employees receiving 10 days of paid sick leave per year (pro-rata for part-time) and allowing them to accrue leave based on ordinary hours worked. 

• Record-keeping & confidentiality 

As a business owner, it’s critical that you store meticulous records, while also ensuring the confidentiality of your staff. You’ll need to track employee leave entitlements, usage, and accrued balances while also safely storing employee medical information without breaching confidentiality.

Managing casual sick leave with BrightHR

As you can see, sick and carer’s leave is complex and when managed incorrectly can incur hefty fines and fees on small business owners.

So, what’s the best solution? Technology solutions help you digitally manage sick leave, store employee documents securely, and can help you automatically keep track of and monitor sick leave hours.

From sick leave to lateness, BrightHR gives you a centralised tool to view, approve, and log all common leave requests.

BrightHR offers you a suite of software tools and support services to transform your business. That includes our absence management software, designed to help you stay on top of unplanned absence and lateness.

And it doesn't end there. We also help you by automating your annual leave accrual calculations, giving you a library of helpful HR document templates, and instant answers to your burning HR questions. Our open shift feature also lets you alert your employees to open shifts that they come take on a first come first served basis, so you can deal with no-shows or sudden absences without the stress of understaffing.

Want specific advice for your unique HR dilemma? Our team of employment relations advisers are on hand to answer all your questions from managing paid or unpaid leave, how to pay your employees compliantly, and so much more.

Book a free demo today to see BrightHR in action.