Time Off Policies

A time off policy is a set of rule that defines how employees earn, request, and use time off. These policies are created and managed by the business, and each employee is assigned to one or more policies depending on their role, location, or type of employment.

Policies are fully customizable. Managers can define how balances accumulate, whether time off is paid, and whether requests require approval. These settings create structure around time off usage and make it easier for teams to stay on top of availability and compliance.

The policy management experience is designed to be flexible enough to fit any business use case and to help maintain compliance across geographies, work environments, and worker types.

What is a Time Off Policy?

Each time off policy describes one kind of leave — for example, sick days, vacation, or unpaid personal days.
Businesses can define as many policies as needed and assign them to different employees based on role, seniority, location, and other criteria.

Time Off Policy Definition

It includes information about how that time is granted, whether it is paid, and how much time can be used. Employees may be assigned to more than one policy depending on the business setup.

Policies are only active once they are published and can then be adjusted, archived, or reassigned at any time.

Policies have limitations that help keep compliance, read the Compliance Limitations section below.

Creating and Editing a Policy

Policies are created from the embedded time off settings screen. When creating a policy, managers can give it a name, define the type (e.g. vacation, sick leave), and configure how it works. The system supports both paid and unpaid leave and allows you to define whether balances are unlimited or tracked in a specific amount.

Policy settings interface showing policy details, employee assignments, and configuration options

Each policy can also define whether requests require manager approval, how many hours define a full day, and whether to allow balance carryover into the next year. If needed, the policy can prevent employees from using more time off than they’ve earned.

Some options can be changed over time. Updates to a policy apply to all employees assigned to it.

Paid vs. Unpaid Time Off

The policy determines whether the time off is paid or not. This decision affects payroll and compliance reporting. For example, unpaid leave is often allowed for personal reasons or emergencies, while paid leave is typically part of employee benefits.

Both types of policies can be used at the same time. A business might offer paid vacation alongside unpaid sick leave, or use unpaid time off for temporary workers.

Limited vs. Unlimited Policies

Policies can either be unlimited, where employees can request time off without a set balance, or limited, where time off is tracked and deducted from a balance. Limited policies are often used when businesses want to control how much time is used or stay compliant with specific labor laws.

Unlimited policies do not accumulate hours and do not enforce balance limits, but requests can still go through an approval process.

Accrual Models: Fixed vs. Earned

When using a limited policy, time off can be given in a fixed amount or earned over time. In a fixed model, the business gives a set number of hours or days up front. In the earned model, employees gain time off based on the number of hours they work.

For example, a policy might earn one hour of time off for every 30 hours worked. These settings help businesses create time off rules that scale with hours, which is useful for part-time or hourly roles.

Setting the Policy Type

The type of policy describes what kind of time off it is — vacation, sick, personal, or any other custom label. This is mostly used for payroll reporting and categorization.

Using Draft, Active, and Archived Status

Each policy has a status. Draft policies are visible only to managers and are not in use yet. Policies in draft status can be freely edited and do not take effect.

Active policies are assigned to employees and will show in their request options if all other limitations are met.

Policies can be turned off temporarily and set to status Not Active. In this status, new balances will not be accrued, and no carryovers will happen. Employees can still use any balance they have accrued so far (read Compliance Limitations below).

Policies that were turned off will become Archived when all time off balance is spent.

Assigning Policies to Employees

Once a policy is active, it can be assigned to employees individually or in bulk. Each employee will follow the rules of the assigned policy, and their balance and request behavior will be tracked accordingly.

Employee status and balances

If a policy changes, those updates apply to everyone currently assigned. Employees can be removed from or added to a policy at any time.

To learn more about how requests and approvals work once policies are active, continue to the Requests & Approvals guide.

Carryover

Carryover allows unused time off from one calendar year to remain available into the next. If a worker ends the year with unused balance, carryover rules determine whether they keep it and how much of it is retained.

Compliance Limitations

Time off policies are often tied to employment terms, labor regulations, and employee expectations. Because of this, Easyteam places restrictions on what can be changed after a policy is activated and assigned to staff.

Manual balance changes: The system warns if a manual adjustment would remove time already granted, which may violate employee agreements. This is important from a legal and operational perspective, as reducing previously earned or allocated time could violate employee agreements or regional labor laws.

Warning shows to managers when performing actions that might lead to compliance issues

Managers can still make manual balance changes if needed, but these changes are tracked and should be used with care.

Changing policy settings: Once active, the core settings of a policy — such as whether it's paid or unpaid, whether it uses limited or unlimited tracking, and how time is accrued — can no longer be edited. This is to ensure consistency over time, and in payroll reports, and to avoid compliance risks from retroactively changing the rules that affect past accruals or usage.
If a business needs to update these core settings, the recommended approach is to create a new policy and reassign employees as needed.

What is a Time Off Policy?#

Creating and Editing a Policy#

Paid vs. Unpaid Time Off#

Limited vs. Unlimited Policies#

Accrual Models: Fixed vs. Earned#

Setting the Policy Type#

Using Draft, Active, and Archived Status#

Assigning Policies to Employees#

Carryover#

Compliance Limitations#