The employment attendance policy is one of the most important components of the employee handbook. Companies that get attendance right can offer employees better work-life balance and flexibility without sacrificing business objectives. Those that get it wrong often suffer from high absenteeism and lower productivity.The best employment attendance policy is one that rewards actions that benefit the company and discourages actions that hinder business objectives. Policies need to emphasize rules and disciplinary actions that minimize the disruption of unscheduled absences. Consider these five things when creating an employee attendance policy or reviewing your existing policy.

1. Study the impact of absence on your organization

A good way to begin thinking through a new attendance policy is to gather any past attendance data you have and study how different kinds of absences affect organizational performance. Consider whether your business currently experiences an above or below average rate of absence, then decide how to address it with policy. To calculate your company’s rate of absenteeism, use this formula:

Absenteeism Rate = (Average # of Employees X Missed Workdays) / (Average # of Employees X Total Workdays)

According to the U.S. Bureau of Labor Statistics, full-time employees have an average overall absence rate of 2.9% of working time, or put another way, on any given business day, companies can expect nearly 3% of workers to be absent. BLS also publishes more specific averages for different industries and occupations.

2. Create a simple set of rules governing attendance

Your attendance policy will primarily consist of a set of rules for attendance and well-defined disciplinary procedures that will be followed when employees violate those rules. To start, define attendance, absence and tardiness, so employees know what you mean before you set out the rules. Next, lay out the procedures and rules for using paid time off, whether for illness or vacation. Finally, you should outline the rules for unscheduled absences, including calling in sick and tardiness policies.Here are a few of the questions that your policy should answer for employees:

• How do employees register their on-time attendance? Do they need to clock in with a timecard or log into a time and attendance solution?

• What time must employees report for work? When is an employee considered tardy?

• To whom should employees call in sick? By what time?

• How should employees request and schedule time off? Is there a limit to how many days in a row they can request? How will managers approve or decline requests?

• How will employees accrue paid time off–up front at the beginning of the year or a few hours each pay period? Can they request time off that has not yet been earned?

3. Comply with employment laws about employee leave

Read up your national and local employment leave laws before drafting your attendance policy. For example, in the U.S., the Family Medical Leave Act supersedes corporate policy in companies with 50 or more employees. And some state laws may require employers to provide employees with paid sick leave as opposed to general-purpose paid time off. The EU dictates time off in the Working Time Directive, and UK employers are required to provide additional leave beyond it. Companies should ask an employment attorney to review new employee attendance policies to make certain they do not run afoul of leave laws or anti-discrimination, anti-retaliation rules.

4. Build flexibility into your policy

Millennials and Generation Z workers value flexible scheduling and the ability to work remotely over most other benefits. In this context, a flexible time and attendance policy is necessary to support mobile workers and flextime scheduling. Companies that allow employees to work flexible schedules or remotely can also benefit from optimized real estate costs as employees on different schedules can utilize the same office spaces.

5. Define realistic disciplinary actions

Once you’ve established rules, you will develop consequences for employees who don’t follow them. Disciplinary procedures must be fair and impartial and applied even-handedly across the workforce. Nothing should feel arbitrary, mean-spirited or retaliative to your employees.

Match stronger disciplinary actions to those activities you determined were the most harmful to productivity and business objectives. For example, if being late to a shift results in the same level of disruption as missing work altogether, your disciplinary action might state that an employee 30 or more minutes late to work will be counted as a no-show for that day. Consult attendance policy examples for ideas about enforceable, fair disciplinary actions.

Enforce your new policy with a mobile attendance tracking solution

As you develop your new (or improved) attendance policy, think about your ability to effectively track employee attendance. Mobile time and attendance solutions establish trust and accountability by tracking hours worked and each worker’s location, providing employers with the flexibility to support a modern workforce.