Leave policy for startups

Start with four leave types, not twelve

Casual leave, sick leave, earned leave and leave without pay cover almost everything a young team runs into. ZeniaHR starts with exactly these: CL at 1 day a month, EL at 1.5 and SL at 0.5, plus LWP, and the numbers are yours to change. Maternity leave is up to 26 weeks after 80 days of work in the previous 12 months, or 12 weeks for a woman with two or more surviving children, as the maternity benefit rules set out. Paternity, marriage and bereavement leave are your choice; add them to the written policy as the team asks, not in advance.

Worked example: accrual for a mid-month joiner

Monthly accrual is fairer than a lump sum in January when many people joined during the year. Say earned leave accrues at 1.5 days a month and Kavya joins on 21 September. She is on the rolls for 10 of September's 30 days, so she earns 1.5 x 10 divided by 30, which is 0.5 day, for September, then the full 1.5 days each month from October. ZeniaHR works out pro rata credit for joiners and leavers, rounds it to half a day and caps the balance at the maximum you set, so nobody has to do this sum by hand.

Open or unlimited leave still needs a ledger

Some startups prefer an open leave policy: take what you need, agreed with your manager. It can work in a small, high-trust team, but record every day taken anyway. A covered worker who completes 180 days of work in a calendar year earns one day of paid leave for every 20 days worked, can carry forward up to 30 days, and may ask for unused leave to be encashed at year end, as the leave entitlement rules explain. A ledger shows the entitlement was met, and gives you real numbers when the policy is reviewed.

Approvals when the founder is everyone's manager

ZeniaHR routes leave to the reporting manager first and then to HR. In a 12-person company both may be the same founder, which is fine for now. As soon as a team lead exists, make them the reporting manager for their team, so the founder only sees leave from direct reports. Set probation rules per leave type, for example no EL during probation but CL allowed, and a notice rule so a week-long trip is flagged at least seven days ahead instead of the night before.

How to set it up in ZeniaHR

1. In the leave step of HRMS Setup, keep CL, EL, SL and LWP and adjust the monthly quotas to your written policy.
2. Set rules per leave type: whether it is allowed in probation, notice days, and a document for sick leave after two days.
3. Use the gender, employment type and minimum service rules on any leave type that applies only to some people.
4. Set the maximum balance and carry forward cap for EL, and preview the year-end run before any days lapse.
5. Make team leads the reporting managers for their people so leave requests stop landing only with the founders.

Read more about leave management in ZeniaHR.

Roles this applies to

Frequently asked questions