Guide to sick leave management

Improve your sick leave management skills by discovering everything you need to know in this guide, from leave obligations to effectively reducing sick leave.
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As an employer, it’s important to be on top of your leave obligations towards your people. When they’re off sick, they’ll often have questions about their sick leave, how it works and what they need to do in order to be paid.

You need to be familiar with the sick leave process to help them deal with their leave situation efficiently, so they can focus on getting better​.​

What is sick leave?

Sick leave is an employee’s right to not come to work when they’re unwell, and still be paid.

Sick leave is important because it prevents the spread of contagious viruses through a workplace, and ultimately makes your business more productive.

Employees accumulate sick leave with time spent at a workplace, though it is capped and not all of it can be carried over into the next year.

Sick leave entitlement in NZ

After an employee has been in a workplace for six months, they’re entitled to at least 10 days of paid sick leave per year. Minimum sick leave entitlements increased from 5 to 10 days in 2021.

As an employer, you are obliged to allow staff to accumulate up to 20 days of sick leave at a time. However, they can only carry over a maximum of 10 unused sick days into a new year. This is a key aspect of sick leave management, as employees can lose track of how many days they are entitled to.

Sick leave tracking is the responsibility of the employer, but you can also encourage your people to monitor how much sick leave they have.

Read more: The benefits of a leave management system

Employers must pay staff sick leave at the​ir​ ​equivalent​ rate for a normal working day. This includes ​bonuses or overtime ​they would have earned ​if they were working.

Employees are also entitled to take sick leave to care for their partner, child or anyone who depends on them. 

If an employee is sick but has no sick leave - either they haven’t worked in their job for six months or they’ve already used their sick leave quota - they can take sick leave in advance, use annual leave or take unpaid leave. 

You can request a doctor’s certificate as proof of sickness if you wish. This typically occurs after the staff member has been off sick for three consecutive days. If you request a doctor’s certificate within three days, you are required to pay the doctor’s fees.

Payment for sick leave

Employees are paid sick leave for any day they are unable to work due to being unwell. They are not entitled to sick leave on any day where they are sick but not ordinarily at work.

For example, a shift worker who works Wednesday to Sunday would be paid a day’s sick leave if they were sick on a Thursday, but not if they were sick on a Monday.

However, if it had been arranged in advance for them to work the Monday and they were sick, they would be entitled to ​​a ​sick leave.

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Top ways to reduce sick leave

When staff take sick leave, it can be hugely disruptive to the business. Sickness doesn’t discriminate, and can strike anyone at any time. In a busy workplace, it can be hard to cover absences.

This doesn’t mean you should discourage people from taking sick days. However, it does mean you can use sick leave management strategies to minimise the times when staff need to take their sick leave, and also to take it when it’s appropriate so they can get back to work sooner.

Have clear workplace absence policies

Your staff should know who to contact when they’re sick, and what they need to do. Your policy should be communicated as part of employee onboarding, including how they should make contact, and when (i.e. by 7:30 am the day they are sick).

Policies should be applied consistently in order to be fair to all staff. 

Offer support when an employee is seriously ill

If a staff member is off work for more than a few days, reach out to see if there’s anything you can do for them. Let them know they are missed and be sure to tell them you can cope with the workload in their absence. 

This encourages sick employees to take the time they need to fully recover, and not rush back to work before they’re ready.

Review your health and safety

Sick leave can be taken when staff are injured as well as unwell. By keeping high health and safety standards you reduce the risk of staff being hurt at work and having to take time off to recover.

Create flexible working arrangements

By accommodating remote and flexible staff, you reduce the risk of sickness sweeping through the workplace. Coughs, colds and viruses can be easily spread at work, particularly if there is shared equipment or people are in close proximity to each other.

When staff are able to work from home, there is less risk of them coming into contact with someone who is sick.

Encourage your employees to be physically active

Physical activity promotes healthy immunity which both prevents people from getting sick and helps them to recover quicker when they are unwell.

Keep an eye on employee stress levels

Stress can become a significant health issue when it leads to breakdowns or burn outs. It can take weeks for employees to recover from these types of events, and they may not return to work at all.

Employers and managers should keep a close eye on staff workloads to prevent people from getting overwhelmed and have strategies in place to deal with busy periods so they don’t impact long term employee wellbeing.

Encourage a good work-life balance

All work and no play makes Jack a dull boy. This may be an outdated turn of phrase, but it still rings true for people who are impacted by overbearing work requirements. 

It’s important your people have a life outside of work so they can be at their best when they’re on the clock. A good balance between the two has proven health benefits.

Take home message

Sick leave management is a wellbeing exercise as well as a business cost saving. The key is not to focus so much on sick leave itself, but to take steps to reduce employees’ need to take it.

A healthy workforce is a productive workforce, and by using sick leave management strategies you can enable your people to be at their best.

When it comes to sick leave monitoring and tracking, it helps to use leave management and payroll software such as Smartly. Smartly automatically updates leave allowances, and makes it easy for your people to request sick leave and for managers to approve it.

Find out more about Smartly’s advanced leave management features to see how they can benefit your business today. 


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