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

Attendance policies are essential for any small business, helping shape the reliability and consistency of a workplace and its employees. Understanding the significance of an attendance policy and creating a clear and effective one can impact organizational success greatly. Here’s what you need to know about attendance policies in the workplace.

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What is an attendance policy?

An attendance policy defines when employees should arrive 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 their arrival and departure. This can apply to typical 9-to-5 Monday-to-Friday jobs as well as shift-based employment, for which rotating schedules are more common.

After defining the details, outline the disciplinary action component 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 accrue points if they are absent without approval, if they arrive late or if they leave early. 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.

Develop a protocol for employees to report absences when they are unable to attend work that day.

Why your business needs an attendance policy

Although the exact terms and flexibility of your attendance policy will depend on your business and company culture, it is essential to have a written policy. In addition to being good practice, a well-thought-out attendance policy can have several benefits.

1. It can save you money.

It may be easy to dismiss tardiness or overlook occasional absences, but the costs can add up for your business. Absenteeism and tardiness can lead to both direct and indirect costs. Direct costs include paying for unproductive hours, overtime to cover shifts and temporary staffing. Indirect losses, however, can be harder to quantify. These might look like reduced team morale or dissatisfied customers. A clear attendance policy helps mitigate these financial setbacks and promotes a more efficient and profitable operation.

2. It sets expectations and minimizes employee absences.

By creating a defined attendance policy, you can hold employees accountable and reduce problems within your business. It’s also just 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. Additionally, the policy tells employees how and who to notify if they are going to be tardy or absent. Then you can find the appropriate coverage before it becomes a problem.

3. It can improve productivity.

In the age of remote work, attendance policies can be essential for holding employees and managers accountable for productivity. In your policy, include a section addressing 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. 

As you implement these policies, consider other ways you can encourage your employees to be more productive, such as creating a positive work environment, automating the more menial tasks that eat up time and listening to employee feedback. 

Creating a safe and healthy workplace and offering employee wellness benefits can help prevent employee absenteeism.

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 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 leave and paid time off. For example, tardiness could mean clocking in more than 10 minutes late.

2. Create employee protocols.

You need standard processes in place that apply to all of your workers when they are requesting time off, sick or going to be late. Create a fair policy that outlines how employees should alert managers and states what happens if employees fail to show up for work without warning.

3. Draft your plan.

Once you’ve outlined the important definitions and protocols, draft your attendance policy. Create multiple sections to address potential scenarios. Add distinctions for workers and managers, if necessary. Also consider exemptions, like absences for jury duty or related to the Americans with Disabilities Act (ADA). While a defined policy is important, 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 requests. You want to create a policy that fits your business, not one that causes workers to quit.

5. 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.

To keep your attendance policy accurate and relevant, review it at least once a year.

Attendance policy template

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

1. 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.

2. 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 callAbsence without prior warningLatenessDeparture before a shift’s official endLate 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 also be directly reflected in their paycheck. After [number] instances of tardiness, an employee will have to speak with a manager about the problem. If there are 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 of sick days that worker has.

3. Policy exemptions

Bereavement, jury duty and military duty are all exemptions from disciplinary action as are Family and Medical Leave Act- and ADA-related absences. In the case of bereavement, jury duty and military duty, employees must speak to their managers within [amount of time] of the absence.

According to the United States Bureau of Labor Statistics, the average absenteeism rate for full-time workers is 3.6 percent, although this can vary by industry.

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 your business on track. These software systems provide companies with simple online solutions for employees to punch in and out.

To track your employees’ time and attendance, you will need to identify your tracking needs and then choose a time and attendance system that meets those needs.

1. Identify your tracking needs.

There are several great time and attendance systems on the market, so choosing the best one for your business depends on what features are most important to you. For example, software can make it easy to organize employee shifts, and you can often build your accounting or payroll software into your workflow to compensate employees easily for their time. Many programs also include advanced features, such as GPS-enabled clocking in, so you know where your employees are clocking in or out from.

Other features include mobile punching, job and project tracking, time-off management and the ability to create reports. They can also let you set alerts when employees are nearing overtime, showing up late or leaving early. Many time and attendance systems integrate with other popular programs, such as top accounting software.

2. Research and choose a time and attendance system.

When selecting time and attendance software, be sure to research and compare your options. Identify your specific tracking needs and consider your business’s unique factors, such as employee scheduling, clock-in/out methods and budget constraints. 

As you evaluate your options, ask the following questions:

Does this attendance system prioritize scalability?Is this system user-friendly?Is data security being taken into account?What are the integration capabilities?What reporting tools are available?Is mobile accessibility something my business needs?Is this attendance system compliant with labor laws?

Finally, assess the total cost of system ownership, including setup, subscription fees and potential extra costs, to ensure alignment with any budgetary constraints.

3. Implement your new system.

Implementing a time and attendance system involves integrating the software into your current processes to cultivate a culture of punctuality. Typically, these systems rely on software that syncs with employee schedules and time tracking tools, such as biometric scanners, mobile apps and web portals, ensuring secure data storage.

Here are some tips to streamline the transition to a new attendance system:

Provide comprehensive training to employees and managers to minimize confusion.Communicate attendance policies clearly, emphasizing punctuality and system compliance.Establish feedback channels for employees to voice concerns and make necessary adjustments.Review attendance data regularly to identify trends and address issues promptly.Consider implementing incentives or recognition programs to motivate employees.Enforce attendance policies consistently to ensure fairness and accountability.Offer ongoing technical support for system-related queries.The best time and attendance software

The best time and attendance software simplifies the process of monitoring employee attendance, streamlines administrative tasks and enhances workforce management. To assist you in selecting the best solution for your business needs, here are some software options that pay attention to efficiency, accuracy and ease of use:

QuickBooks Time: This robust time and attendance solution is best for businesses with mobile workforces. It offers a mobile clock-in/out option, geofencing, live GPS tracking and shift scheduling, along with extensive job and expense tracking features. QuickBooks offers several other in-house human resources (HR) solutions or you can integrate QuickBooks Time with a variety of other third-party applications. If you want to learn more, check out our QuickBooks Time review.When I Work: This affordable time and attendance solution is best for restaurants and retail businesses. When I Work has scheduling tools that many competitors lack. You can use drag-and-drop shift scheduling tools, allow shift bidding and shift trading, set up automated scheduling and manage time-off requests. You can also require photo clock-ins (to prevent “buddy punching”) and track attendance for multiple locations. If you want to learn more, check out our When I Work review.Paychex Flex: This comprehensive time and attendance solution is best for those who want an all-in-one HR solution with time tracking features. As a Paychex user, you can access one comprehensive platform that easily integrates with several other Paychex HR solutions, such as hiring and onboarding services, payroll, employee benefits, business insurance and HR compliance assistance. With these options, in addition to Paychex’s time and attendance features, such as advanced punch-in options, visual schedulers and templates, geotechnology, time-off management, job costing and analytics, you can maintain all employee data in one location. If you want to learn more, check out our Paychex Flex review.Time Doctor: Time Doctor impresses with its unique options like allowing unlimited screenshots for proof of work. This software integrates with several popular payroll systems, making it an ideal choice for a variety of businesses. Time Doctor also stands out with its work-life balance reporting and distraction alerts. It also offers 24/7 assistance via email and chat, along with extensive online resources, ensuring reliable customer support. If you want to learn more, check out our Time Doctor review.TimeClock Plus: This software system offers a highly customizable time and attendance solution. Its diverse clock-in options and extensive add-ons cater to the evolving needs of scaling businesses. TimeClock Plus supports essential functions like employee scheduling, job costing and payroll prep, with advanced features and customer support. If you want to learn more, check out our TimeClock Plus review.Rippling: This HR software is known for its user-friendly interface, app integration and powerful automation features. It streamlines HR tasks like recruiting, onboarding, payroll and benefits administration. Rippling also offers a wide range of features and customizations. It boasts a fast implementation process and strong customer support, including HR Help Desk services. If you want to learn more, check out our Rippling review.

Danielle Fallon-O’Leary and Matt D’Angelo contributed to this article.