How to put together an annual leave policy

You probably get a lot of questions about annual leave. Your staff might want to know how much notice you need or the maximum amount of leave they can take in one go.

And if one employee asks you, another is bound to be wondering the same thing. That’s why you should set aside some time and put together an annual leave policy.

Find out what you should cover in yours.

What should I put in an annual leave policy?

Your annual leave policy should tell your staff what they need to know about their vacation entitlement. You should cover:

• The amount of annual leave your staff are entitled to.
• The start and end date of your holiday year. For example, from 1 January to 31 December.
• How your staff should request annual leave.
• The amount of notice you need to approve an annual leave request. For example, for two weeks off, a minimum of two weeks’ notice.
• The maximum amount of annual leave an employee can take. Include what’ll happen if they want a longer break such as for a honeymoon.
• What’ll happen if an employee has annual leave remaining after you end their contract. You could let them take time off in their notice period or pay them for any unused days.
• How you’ll handle a situation where two employees want the same time off. For example, by accepting the first person that requests leave.
  
• When staff can reclaim annual leave such as if they’re sick during a vacation.
• Whether your staff can carry over unused annual leave into the next year.

Why should I put together an annual leave policy?

It’s simple really. By creating an annual leave policy, your staff know the amount of paid vacation they’re legally entitled to and the rules for booking time off.

That’s not all. Your annual leave policy will help to make sure you’re managing annual leave fairly. And if you do have to decline a request, the policy will help to explain why.

If an employee takes you to an employment tribunal, you can use your annual leave policy as evidence. Without it, the tribunal could rule in your employee’s favour, and you could end up losing thousands of dollars.

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