Small Business Leave Tracking: Managing Employee Time-Off Efficiently

Last updated: January 25, 2023 4 min read

Leave tracking can be a challenging task for small businesses, especially when it comes to managing employee time off. However, you can make it simpler with the right tools and processes.

Having a proper system to track leaves, vacations, and holiday times with timely reminders is crucial for you and your team to plan appropriately.

With a centralized system for planning and sharing holidays, your team will stay within critical deadlines by clearly seeing who will be in/out so they can appropriately distribute the workload.

A clear and well-communicated leave policy should outline the several types of leaves available to employees, such as vacation time, sick leave, and personal days, as well as the procedures employees need to follow to request and take leaves.

Having clear policies helps prevent confusion and employees taking more leave than they are entitled to and ensures everyone is on the same page regarding time off.

Another challenge in leave tracking is keeping accurate records of time offs and requests. This can be easier with digital tools or a designated person or team responsible for managing leave requests. Approval processes can become disorganized if not handled properly.

Additionally, some small businesses may face the challenge of ensuring continuity of operations when employees are out on leave and balancing the needs of the business with the needs of the employees.

In this blog post, we will look at some key considerations for small businesses regarding leave tracking and explore some of the best practices and tools you can use to manage employee time off.

Understanding Leave Policies

A leave policy defines the number of days each employee has, the kind they are eligible for, and how to apply for them. It guarantees they will get the necessary time off work to strike a work/life balance.

Your leave policies should outline the distinct types of leaves available to employees, and the procedures employees must follow to request and take them. You may add as many as you wish based on your policy.

For your leave policies, you can decide how soon after a hire is onboarded, they accrue certain days and whether balances from the current year will roll over to the next. Also, your policy should detail how many days in advance specific leave requests, such as vacations, can be requested.

Types of Leaves

There are several types of leaves existing; however, here are a few common ones you could include in your policies:

1. Vacations: This leave of absence with pay allows employees time off to rest, carry out personal business, or do whatever else they choose to do.

2. Sick: This is mandatory paid leave in many countries, which gives your employees the time to recover from an illness or rest without fear of not getting paid.

3. Parental (Maternal or paternal): Maternity leaves are for mothers to give birth, take care of their child and recover from delivery. Paternity leaves, on the other hand, are for fathers of newborns. This type of leave is not mandatory by law but is an excellent consideration for new fathers on your team.

4. Bereavement: This is for when an employee loses a loved one/family member. It may vary based on the type of family relation.

5. Unpaid: As it suggests, employees are not paid for this type of leave. Usually, this is taken under circumstances where all other eligible leave balances are maxed out, and the individual still needs additional time off.

6. Public holidays: These are leaves given by the government of a country. Some countries share the same and have different ones specific to their culture. Knowledge of the types in countries where your staff members reside and the laws surrounding them are beneficial in assigning the correct ones to them.

7. FMLA/Family Medical Leave Act: Unlike sick leaves, which are paid leaves, FMLA is a labor law in the United States that gives certain employees up to 12 weeks (about three months) of job-protected, unpaid time off per year. Its purpose is to allow such employees to take leave for family or medical reasons. For example, to care for an immediate relative with a serious health condition(s) or their new-borns birth and care, etc...

Tips for creating effective leave policies

Here are some tips for creating effective leave policies:

1. Clearly define the different types of leaves available.

2. Outline the procedures employees must follow when requesting and taking leave, including timelines, documentation, and approval processes.

3. Be consistent in applying the policy, ensuring that it is fair and applies to all employees the same way.

4. Ensure the policy is easy to understand and accessible for employees; this will prevent confusion and questions.

5. Include a process for employees to request leaves, whether it is through an online leave management system or in paper form.

6. Ensure a system is in place for managers to approve or deny leave requests promptly and efficiently.

7. Consider the company's needs and business operations when creating the policy and strike a balance between the needs of the employees and the business.

8. Review and update the leave policy regularly to ensure it stays current and reflects the business and employees' needs.

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Implementing a Leave Tracking System

There are several different methods that small businesses can use to track employee leave, some of the most common include:

1. Paper-based leave tracking: This method involves having employees fill out paper forms when requesting and taking leave. It can be simple and low-cost but prone to error and difficult to manage for managers and HR, especially in the case of a large employee base.

2. Spreadsheets: This method utilizes electronic spreadsheets to track employee leave requests, approvals, and time-offs. It allows automation of some calculations but is prone to errors and difficult to manage when sharing information between multiple managers or HR staff.

3. Digital leave management software: These systems allow employees to request leaves and track their time-offs electronically, making it easy for managers to approve or deny requests and see their remaining leave balances.

These systems may provide additional features such as leave reports, automatic notifications, and accrual tracking. It is considered the most efficient and accurate method; however, it may require an initial investment or a recurring subscription fee.

Benefits of Using a Digital Leave Tracking System

A digital leave tracking system can provide several benefits for small businesses:

1. Convenience: Employees can request leave, and managers can approve or deny requests electronically, making the process faster and more efficient.

2. Accurate records: Digital leave tracking systems automatically record when leaves are taken, which can help to ensure that records are accurate and up to date.

3. Better communication: Digital leave tracking systems often include features such as notifications, messaging, or emailing systems that can help improve communication between employees, managers, and HR.

4. Reports: Some digital leave tracking systems generate reports that help managers identify patterns in leave usage, such as the times of the year when employees are most likely to take leave.

5. Leave balance visibility: Many digital leave management systems allow employees to see the balance of leaves they have and the ones they use. It can help in better planning for time-off requests.

6. Cost-effective: A digital leave tracking system can be more cost-effective than traditional paper-based systems, as it eliminates the need for manual data entry, reducing the risk of errors and minimizing administrative time.

7. Scalable: As the business grows, the digital leave management system can easily accommodate the change, which makes it flexible and less prone to errors.

With these benefits in mind, selecting and implementing a leave tracking system for your small business can still be challenging, but you can do it effectively with the right approach.

Here are some tips to consider when selecting and implementing a leave-tracking system for small businesses:

  • Determine your needs
  • Research different options
  • Consider user-friendliness
  • Look for flexibility
  • Test the system

Leaveforce, the leave management software from Vineforce tackles all issues/challenges surrounding leave management, making it the standard solution for remote and hybrid teams.

Managing Leave Requests, Accruals, and Balances

The first step to effectively managing leave requests, accruals and balances is to have a clear and straightforward process for submissions and approvals. This ensures a few things:

  • Reduces the chance of errors and disputes arising
  • Allows managers to review and approve or deny leave requests easily
  • Fairness among employees, making it less likely that some employees can take more time off than others.
  • Knowing leave balances allow employees to plan their time off and schedule leaves effectively
  • Help managers plan for future leave requests, such as scheduling coverage for employees out on leave.

The next consideration could be allowing employees to manage their leave requests through an online portal. An online portal provides convenience, saves time, and reduces the risk of errors, making the process faster and more efficient.

It also gives employees more control over their time off, leading to better work-life balance, satisfaction, and reduced turnover. Lastly, when leave requests are received and processed promptly because of portals, employees are kept informed about the status of their proposals.

It automatically tracks accruals and balances, generates reports, and sends reminders in the form of notifications.

If you encounter dealing with last-minute leave requests and unplanned absences, consider having a contingency plan in place. This plan helps identify key employees who can fill in for absent colleagues or have a pool of contract or part-time staff you can call upon in emergencies.

Compliance for Leave Management

Complying with federal and state labor laws related to leaves for employees is important to ensure that your business is operating within the legal framework and to protect the rights of employees. Employers must comply with various federal and state laws related to leaves.

In the United States of America, a few to consider are the Family and Medical Leave Act (FMLA), Americans with Disabilities Act (ADA), and state laws like the Pregnancy Disability Leave Law (PDLL) and Paid Family Leave (PFL), etc.

Compliance with these laws typically includes providing eligible employees with unpaid leave for specific reasons, such as family medical or pregnancy-related leaves. Employers may also be required to provide job protection, a continuation of benefits, and the right to return to the same or equivalent position after leave.

Employers should be familiar with the federal and state labor laws related to leaves and take steps to ensure compliance by providing appropriate notices, maintaining accurate records, and following the correct procedures for granting and returning from leave.


Though leave management is daunting, using the best tools and tips can supercharge the process. Having a proper system to track leaves, vacations, and holiday times is crucial for you and your team to plan appropriately.

An understanding of leave policies, the correct knowledge about implementing the right leave tracking system for your team, effective management of employees' requests, balances, and accruals, and staying compliant with leave laws all impact the efficiency and effectiveness of this HR duty.