Sick Leave Policy Template (2026)

A sick leave policy is a written set of rules that tells employees how much paid or unpaid time off they can take when illness, injury, or a medical appointment keeps them from working. Without one, you're left fielding every absence on a case-by-case basis — and that inconsistency breeds resentment fast.

Whether you're a founder handling HR yourself or the first dedicated people-ops hire at a growing startup, this guide gives you a copy-paste-ready sick leave policy template, a walkthrough of state-by-state legal requirements, and practical advice for making the policy actually work for your team.

What Is a Sick Leave Policy and Why Does It Matter?

At its core, a sick leave policy answers three questions: How much sick time do employees get? How do they request it? And what happens to unused days?

The stakes are higher than most founders realize. According to the Bureau of Labor Statistics, 79% of private-sector workers had access to paid sick leave in 2024 — up from 64% a decade earlier. If your company doesn't offer it, you're in a shrinking minority that candidates notice.

A clear policy also protects you legally. A 12-person design agency in Portland learned this the hard way when two employees took three weeks of unplanned absences in the same quarter. Without a written policy, the founder couldn't address the pattern without risking a discrimination claim. After drafting a simple sick leave policy and distributing it through their employee handbook, the issue resolved itself within a month.

Beyond compliance, a sick leave policy signals trust. You're saying: "We know people get sick. Here's how we handle it like adults."

Paid vs Unpaid Sick Leave: What Small Businesses Need to Know

There is no federal law requiring private employers to provide paid sick leave. The Family and Medical Leave Act (FMLA) guarantees up to 12 weeks of unpaid leave for serious health conditions — but only for companies with 50+ employees.

The real action is at the state level. As of 2026, 22 states plus Washington, D.C. have mandatory paid sick leave laws for private employers.

States With Mandatory Paid Sick Leave (2026)

Important: Several cities (San Francisco, Seattle, Philadelphia, Chicago, and others) have their own ordinances that may exceed state requirements. Always check local rules.

If your state isn't on this list, you're not legally required to offer paid sick leave — but the competitive landscape says you probably should. The BLS data shows the national trend is clearly moving toward universal paid sick time.

Sick Leave Policy Template (Copy-Paste Ready)

Below is a complete sick leave policy template you can adapt for your team. Replace the bracketed sections with your company specifics.

[Company Name] Sick Leave Policy

Effective Date: [Date]

Purpose: This policy outlines how [Company Name] provides sick leave to support employees during illness, injury, or medical needs.

Eligibility: All [full-time and part-time] employees are eligible for sick leave starting on [their first day of employment / after 90 days of employment].

Accrual:

• Employees accrue [1 hour] of sick leave for every [30 hours] worked.
• Sick leave accrual is capped at [40 hours / 5 days] per calendar year.
• Employees may carry over up to [40 hours] of unused sick leave into the next year, with a maximum balance of [80 hours].

Permitted Uses:

• Personal illness, injury, or medical condition
• Medical, dental, or vision appointments
• Care for a sick family member (spouse, child, parent, or domestic partner)
• Mental health days
• Absences related to domestic violence, sexual assault, or stalking (where required by law)

Notification:

• Notify your direct manager as soon as possible — ideally before your shift starts.
• For planned medical appointments, provide [48 hours] advance notice.
• For unplanned absences, notify by [phone, email, or Slack] within [1 hour] of your scheduled start time.

Documentation:

• Absences of [3 or more] consecutive days may require a doctor's note.
• [Company Name] reserves the right to request documentation when a pattern of absence is identified.

Return to Work:

• Employees absent for [5 or more] consecutive days due to illness must provide a return-to-work clearance from a healthcare provider.

Sick Leave and Other Leave:

• Sick leave is separate from [PTO / vacation time]. See our PTO policy for details.
• For extended illness beyond available sick leave, employees may be eligible for [FMLA leave / short-term disability / unpaid leave].

Policy Violations:

• Misuse of sick leave (e.g., using sick days for vacation) may result in disciplinary action.
• We will never penalize employees for legitimate sick leave use.

Feel free to paste this into your employee handbook or HR document system. For related templates, see our bereavement leave policy and time-off request guide.

How to Create a Sick Leave Policy in 5 Steps

Step 1: Research Your Legal Obligations

Start with your state. If you're in California, you need at least 40 hours of paid sick leave annually. If you're in Texas, there's no state mandate — but Austin once had a city ordinance (later struck down), so always double-check local rules.

If you have remote employees across multiple states, things get more complex. Generally, the law that applies is based on where the employee works — not where your company is headquartered. A startup based in Florida with two developers in New York and a designer in Colorado needs to comply with New York and Colorado sick leave laws for those employees, even though Florida has no mandate.

Bookmark the DOL's FMLA page and your state labor department's website. The National Conference of State Legislatures maintains an updated tracker of paid leave legislation. When in doubt, spend an hour with an employment attorney — it's cheaper than a lawsuit.

Step 2: Decide on Paid, Unpaid, or Combined PTO

You have three main paths:

1. Separate sick leave bank — Dedicated sick days separate from vacation. Clearest for employees, easiest to comply with state accrual laws.
2. Combined PTO — One bucket covers vacation, sick days, and personal time. Simpler to administer, but some states still require separate sick leave tracking even within a PTO plan.
3. Unpaid sick leave — The legal minimum in most states. Only viable if you want to do the bare minimum (not recommended for retention).

Most small teams (under 50 people) do best with separate sick leave alongside a PTO policy. It keeps things transparent and makes compliance straightforward.

Step 3: Set Your Accrual Method

More on this in the next section, but the quick decision: accrual (earn as you go) vs. lump sum (full balance on day one). Accrual is more common and aligns with most state laws. Lump sum is simpler to manage.

Step 4: Define Procedures and Documentation

Write down exactly how employees should call in sick, who they notify, and when you'll ask for a doctor's note. The clearer this is, the fewer awkward conversations you'll have.

Step 5: Communicate and Distribute

A policy nobody reads is a policy that doesn't exist. Add it to your employee handbook, review it during onboarding, and make sure managers know how to handle requests consistently.

Go beyond just handing someone a PDF. Walk through the sick leave policy during the first week of onboarding — explain how to request time off, where to check their balance, and who to notify. Have managers confirm they understand the approval process. Store the policy somewhere employees can access anytime — whether that's a shared drive, your company wiki, or a documents hub inside your HR platform.

Update the team whenever the policy changes. Even small adjustments — like raising the doctor's note threshold from two days to three — deserve a clear announcement so nobody is caught off guard.

Sick Leave Accrual Methods Explained

How employees earn sick time is one of the most consequential decisions in your policy. Here are the three primary approaches.

Accrual (Earn-As-You-Go)

Employees earn sick time incrementally — typically 1 hour for every 30 or 40 hours worked. This is the most common method and the one most state laws reference.

Best for: Companies in states with mandatory sick leave. The accrual rate usually satisfies the legal minimum automatically.

Downside: Requires ongoing tracking. New hires start with zero balance, which can feel punitive during their first few months.

Lump Sum (Front-Loaded)

Employees receive their full annual sick leave balance on January 1 (or their hire date). A typical allocation is 5–10 days per year.

Best for: Companies that want simplicity. No per-payroll accrual calculations, no mid-year balance confusion. In many states, front-loading also eliminates the requirement to allow carryover.

Downside: An employee who joins in November gets the same balance as someone hired in January. Some companies prorate based on start date.

Unlimited Sick Leave

No formal cap on sick days. Employees take what they need. This works similarly to an unlimited PTO policy — sounds generous, but studies show employees often take less time off without a defined allowance.

Best for: High-trust, results-oriented teams where output matters more than hours logged.

Downside: Hard to track for compliance purposes. If your state requires accrual-based sick leave, unlimited policies may need a legal workaround.

Sick Leave Policy Best Practices

After reviewing dozens of small-business sick leave policies, a few patterns separate the ones that work from the ones that collect dust.

Include mental health days explicitly. Don't make employees lie about having a cold when they're burned out. Adding "mental health" to your permitted uses list costs nothing and earns enormous goodwill. A 40-person SaaS company in Denver saw their unplanned absences drop by 22% after explicitly adding mental health to their sick leave policy — employees stopped calling in with fake symptoms and instead took intentional recovery days.

Set a reasonable doctor's note threshold. Three consecutive days is the standard. Requiring a note for a single sick day creates resentment and wastes everyone's time. Save the documentation requirements for extended absences.

Separate sick leave from PTO (if possible). When sick days come out of the vacation bucket, employees come to work sick. This is called "presenteeism," and it costs US employers an estimated $150 billion annually in lost productivity according to Harvard Business Review — more than absenteeism itself.

Don't punish patterns without investigating. If someone calls in sick every Monday, have a conversation before assuming the worst. They might have a recurring medical appointment or a chronic condition they haven't disclosed.

Build in a grace period for new hires. Under accrual-based policies, new employees start with zero sick time. That creates an uncomfortable gap — someone who catches the flu in their second week has no safety net. Consider front-loading two or three days on the start date, then switching to accrual. The goodwill far outweighs the cost.

Review your policy annually. State sick leave laws change frequently. At least once a year — ideally during open enrollment season — confirm that your accrual rates, carryover limits, and eligibility rules still comply with current law. Add a calendar reminder so it doesn't slip through the cracks.

Create a clear attendance policy alongside your sick leave policy. The two documents work together — one covers legitimate health absences, the other addresses chronic no-shows.

How to Track Sick Leave Without Losing Your Mind

Tracking sick leave on spreadsheets works until it doesn't. Around the 15-employee mark, manual tracking starts breaking: someone forgets to update the sheet, accrual calculations drift, and you're spending Friday afternoons reconciling balances instead of doing actual work.

Here's what to consider at each stage:

Under 10 employees: A shared Google Sheet with columns for date, employee, type (sick/PTO/personal), and running balance. Simple, free, and sufficient.

10–25 employees: Time to upgrade to purpose-built software. Look for automated accrual calculations, self-service requests, and manager approval workflows. Tools like Tiny Team's team calendar handle this natively — employees request time off, managers approve, and balances update automatically.

25+ employees: You need reporting. Which department has the highest absence rate? Are accruals calculated correctly across pay periods? Is anyone approaching their carryover cap? A people management platform with built-in time-off tracking saves hours of manual work each month.

For a deeper comparison of available tools, see our roundup of the best PTO tracking software and leave management software.

Whatever system you choose, make sure employees can check their own balance without emailing HR. Self-service access reduces inquiries by at least half and gives employees ownership over their time off.

Frequently Asked Questions

How many sick days per year is standard?

The most common allocation for small businesses is 5–10 paid sick days per year. According to the Bureau of Labor Statistics, workers with fixed sick leave plans receive an average of 8 days after one year of service. State minimums typically work out to about 5 days (40 hours) annually for full-time employees.

Is paid sick leave required by federal law?

No. There is no federal law requiring private employers to provide paid sick leave. The FMLA provides up to 12 weeks of unpaid leave for serious health conditions, but only applies to employers with 50+ employees. Paid sick leave requirements come from state and local laws — currently 22 states plus D.C. have mandates.

Can you fire someone for calling in sick?

In most cases, no — especially if the employee has available sick leave or is protected under FMLA, ADA, or state sick leave laws. However, excessive absenteeism that isn't covered by a protected leave can be grounds for termination if documented properly. Always consult with an employment attorney before terminating someone for attendance issues.

What qualifies as sick leave?

Typical sick leave covers personal illness, medical appointments, mental health days, and caring for a sick family member. Many state laws also include absences related to domestic violence or public health emergencies. Your policy should list specific qualifying reasons to avoid ambiguity.

Should sick leave be separate from PTO?

It depends on your team and state. Separate banks are clearer and easier for compliance, but a combined PTO plan is simpler to administer. If your state mandates sick leave accrual, you may need to track sick time separately even within a combined plan. For most small teams, we recommend keeping them separate — check our PTO policy template for the vacation side.

Do unused sick days have to carry over?

It depends on your state. Many states with paid sick leave laws require carryover of unused days (typically up to 40–80 hours). However, if you front-load the full annual balance at the start of each year, many states waive the carryover requirement. Check your specific state law — this is one of the most commonly overlooked compliance details. For more on how accrual and carryover work, see our PTO accrual guide.