It is a good idea for your business as it grows to develop written vacation and sick leave policies. Creating a policy and putting it in writing leaves no room for misunderstanding. Everyone knows what is expected of him or her and what is acceptable.
The important thing to consider when adopting such policies is whether a certain policy makes sense for your employees, and for you. Traditionally, companies have set up programs where employees get "x" number of sick days, and "y" number of holidays, and so forth. This typical plan is easy to set up. You simply decide how many sick days and vacation days each employee is to get a year, put it in writing, and let everyone know.
While this system has worked fine for years, you may want to consider an alternative that gives your employees more respect and autonomy, yet which doesn't cost you anything more. Some companies now pool these various types of leave into a unified "bank" of hours from which employees can draw. For example, instead of giving employees ten sick days and five vacation days a year, you might decide instead to give each one 120 hours a year to use as they see fit.
This plan has many benefits. First, it allows employees to schedule days off easily. It also means that employees don't feel cheated when they are not eligible for leave in certain categories. What good is it when you give employees time off to be with sick kids if the employee has no children? The great thing about this plan is that employees get choices for using their time off. They may use it for vacation, personal time, or sick days, or just accumulate it; it is like a savings account. Some employers even allow employees who bank more than, say, 80 hours, to redeem the excess hours for cash at the worker's current rate of pay.
The amount of leave given for a traditional system is the same as the hourly banking system, although it all depends upon your particular business and industry norms. On average, new employees usually get about 17 or 18 days off per year, allocated evenly between sick and vacation days. Professional, long–term employees could have 30 or more. Industry associations can be a good source for this type of information.