Managing leave requests and approvals without the paperwork

1. Leave types to set up

Start by listing every kind of time off your business deals with. Each one needs its own name, its own balance (if it has one) and its own rules.

Keep the list short. Five or six clear types work better than fifteen nobody understands. And never let one type quietly become another: a sick day taken as vacation, or vacation booked as unpaid, causes problems later with pay and with balances.

2. How leave builds up: accrual vs a set allowance

There are two common ways to give people vacation.

• Accrual. Leave is earned as people work: for example 1.25 days for every full month, or 1 hour for every 25 hours worked. The balance grows through the year. New starters begin at zero.
• Set allowance. Everyone gets a fixed number of days at the start of the leave year (say 15), and it counts down as they take it.

Accrual is fairer for new starters, part-timers and people who leave mid-year, because nobody can take leave they haven't earned yet. A set allowance is simpler to explain and easier to plan around, but you need a rule for people who join or leave part-way through the year. Many businesses use a set allowance for long-serving staff and accrual for the first year.

3. Worked example: accrual

By the month

Keisha starts on 1 March. She earns 1.25 days of vacation for each full month worked (15 days a year).

In October she asks for 5 days. She has 5.75, so the request fits, and she'll have 0.75 left afterwards.

By the hour

Carlos works part-time, 30 hours a week over five 6-hour days. He earns 1 hour of leave for every 25 hours worked. After 10 weeks he has worked 30 × 10 = 300 hours, and earned 300 ÷ 25 = 12 hours of leave. That's two of his 6-hour days.

Hour-based accrual follows the hours people actually work, so it suits staff whose hours change from week to week. Counting leave in hours instead of days also avoids arguments about what "a day" means for someone who works short days.

A set allowance when someone leaves early

Devon has a set allowance of 15 days from 1 January and leaves on 30 April. He's been there 4 months of 12, so a pro-rata share is 15 × 4 ÷ 12 = 5 days. He's already taken 7, so he's 2 days over. At his daily rate of US$ 80.00, that's US$ 160.00. Whether you can deduct it from final pay depends on the law and his contract, so check before you do. Our guide to final pay and severance covers the other side: paying out leave that's earned but not taken.

4. Carry-over and caps

At the end of the leave year, you need a rule for unused days. The usual options:

• Carry over in full. Unused days roll into next year.
• Carry over up to a cap. For example, up to 5 days. The rest is lost or paid out.
• Reset. Everyone starts fresh. In some places this isn't allowed, or only if staff had a fair chance to take their leave.

Example: Maria has a 15-day allowance and ends the year with 8 days unused. Your cap is 5. She carries 5 into the new year, so she starts with 15 + 5 = 20 days. The other 3 are lost, or paid out where the law or your policy requires it.

5. Approval chains: who signs, in what order

Every request should follow a route that's written down. For a small team, one approver is enough. For larger teams, a short chain works well:

1. Supervisor: knows the day-to-day cover.
2. Department manager: sees the whole department's calendar.
3. HR: checks the balance and the policy.

Make the chain work in order. The next person only sees the request once the one before has signed, so nobody approves a request their supervisor would have refused. And settle these rules up front:

• A decline ends it. If anyone in the chain declines, the request stops there, with a reason.
• Deadlines. Each approver answers within a set time, for example 2 working days. A request that sits in someone's inbox for three weeks is a decline in practice.
• Holidays of the approver. Name a backup for each step, or allow a senior admin to approve on their behalf, and record it when they do.
• Different routes for different teams. The kitchen and the office may need different approvers. Set a chain for the department, and override it for individuals only when there's a clear reason.

6. Planning cover before you approve

The balance tells you whether someone can take the leave. Cover tells you whether the business can run without them.

Set a simple cover rule for each team, for example "no more than 2 of the 6 kitchen staff off at the same time". That keeps at least 4 working every day. Check it before each approval, against leave already approved, not just the request in front of you.

When requests clash, use a rule people know in advance:

• First come, first served. Simple, and rewards planning. Can favour the same early planners every year.
• Rotation. Whoever got the popular week last year goes to the back of the queue this year.
• Seniority. Common, but can feel unfair to newer staff if used alone.

Whatever you choose, write it down and use it every time. "The manager decides" with no rule is how leave becomes a grievance.

7. Peak seasons and blackout dates

Most businesses have weeks when they can't spare anyone: the year-end rush, a high season, a stocktake, an annual audit. You can protect them with blackout dates, periods when vacation isn't normally approved.

Blackouts work when they are:

• Announced early, ideally at the start of the leave year, so people can plan around them.
• Short and specific. "15 to 31 December" is reasonable. "All of high season" leaves people no good time to rest.
• Balanced by open time. If you block the busy weeks, make it easy to get leave in the quiet ones.
• Allowed to have exceptions. Weddings, family emergencies and medical treatment don't follow your calendar. Decide who can approve an exception.

Check that blackouts still let people take the leave the law gives them over the year. In many places, staff must be able to take their minimum leave, and some set rules on when it can be taken.

8. Sick leave is different

Sick leave isn't planned, so it doesn't fit an approval chain in the same way. Treat it as a notice and a record, not a request.

• Keep it separate from vacation. Don't take sick days out of the vacation balance unless the law and the employee allow it.
• Notice. Ask staff to tell a named person before their shift, by phone or message.
• Proof. Many employers ask for a medical certificate after a few consecutive days. Set the number in your policy.
• Qualifying periods and pay rates. In many places sick pay starts only after a period of service, and may be paid at a lower rate after the first days. Our guide to sick pay explains how that usually works.
• Sick during vacation. In some places, staff who fall ill on vacation can turn those days into sick leave and keep the vacation days. Check your local rules.

Public holidays that fall during someone's vacation are another common question. In many places they don't count as vacation days. See our guide to public holiday pay.

9. Keeping records

A leave record should answer any question a year later without anyone's memory. For each request, keep:

• the leave type, the dates and the number of days or hours
• when it was requested, and by whom
• each approver's decision, with the date and any reason
• the balance before and after
• any certificate or document attached

Keep leave records with your time and payroll records, for as long as the law requires. Several years is common. Our guide to time records and the law covers what to keep.

10. A checklist for managers and HR

• Leave types are listed, each with its own name, pay rule and balance.
• You've chosen accrual or a set allowance, with a rule for joiners and leavers.
• The leave year and the carry-over rule (full, capped or reset) are written down.
• Each team has an approval chain, in order, with deadlines and backups.
• A decline at any step stops the request and records a reason.
• Each team has a cover rule, checked before every approval.
• Clashing requests are settled by a known rule.
• Blackout dates are announced at the start of the leave year.
• Sick leave is kept apart from vacation, with notice and certificate rules.
• Every request, decision and balance change is recorded and kept.

11. Frequently asked questions