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Managing Sick Leave: A Practical Guide for Small Business Employers

Sick leave is one of the most common issues employers face, and it can quickly become confusing when different situations arise across your team. Understanding the rules and having a consistent, fair approach helps protect your business, supports your people, and reduces the risk of conflict or personal grievances. Managing sick leave well is also an important part of maintaining a healthy, productive workplace.

In New Zealand, most employees become entitled to sick leave after six months of continuous employment. From that point on, they receive 10 days per year, and unused days can carry over up to a total balance of 20 days. It’s important to remember that sick leave can be used when the employee is unwell, when their partner or a dependent is sick or injured, or when they need to care for someone who relies on them.

When an employee calls in sick, encourage early communication. This helps you plan staffing and ensures the employee understands what information you need. You’re allowed to ask for proof, such as a medical certificate, but typically only after three consecutive calendar days of sick leave. If you need a certificate sooner, you can request it at your cost. Clear communication about when proof is required will help avoid misunderstandings and support a smoother process for everyone involved.

Sometimes employers notice patterns that suggest possible misuse of sick leave, for example, absences that frequently fall on Mondays or Fridays, or increased sick leave during busy periods or after leave requests are declined. In these situations, it’s important to approach the matter carefully and fairly. Start with an informal, supportive conversation. Explain the pattern you’ve observed and ask whether there is anything affecting their health or personal situation. Keeping the discussion open and non-accusatory often provides clarity and may uncover genuine issues that need support or adjustments at work.

If concerning patterns continue, you have the option to request medical certificates more frequently. You may also remind the employee of your expectations around reliable attendance and the proper use of sick leave. Where the problem persists, you may move into a formal process focused on attendance. This should be handled cautiously and in line with New Zealand employment law. It is essential to show that you have acted in good faith, raised your concerns clearly, provided an opportunity for the employee to respond, and considered any medical information fairly. At this stage, seeking HR support is strongly recommended to ensure the process is reasonable and well-documented.

It’s also helpful to remind employees that sick leave is not a replacement for annual leave, and it shouldn’t be used for personal errands or non-medical reasons. Setting expectations early, ideally through onboarding, policies, and everyday communication, helps create clarity and fairness across the team. A simple, easy to read sick leave policy can make a big difference in reducing confusion and ensuring consistent decisions.

Good record keeping is essential. Ensure your payroll system accurately tracks sick leave balances and that you follow the rules regarding proof of sickness and payment calculations. If an employee exhausts their sick leave entitlement, they may request to use annual leave or take leave without pay. It’s up to the employer to consider these requests reasonably, taking into account both business needs and the employee’s situation.

Managing sick leave doesn’t need to be complicated. With a clear process, open communication, and a good understanding of your obligations, you can support your staff while keeping your business running smoothly. If you’re unsure how to handle a particular situation, or if you need help reviewing your sick leave policy, proHR is here to guide you.