Your Employee Is Not Cheating. Your Leave Policy Is.
Every December, managers across companies get concerned about employees "exhausting" their sick leaves before they lapse. They treat it as a behaviour problem. It is not. The company capped the number and kept the upside. The employee is simply mirroring the same hedge back. We have had unlimited sick leave and unlimited paid leave for more than 12 years. Here is why we have never had this conversation.
Every year, as December approaches, I hear the same observation from managers and leaders at other companies: employees are "exhausting" their sick leaves before they lapse. Taking days they do not need. Gaming the system. The tone is always one of mild disapproval, as though this is an ethical failure on the employee's part.
I want to make a simple argument: it is not.
I remember a specific case in our Pune office back in 2018. A senior developer had saved up his leaves for 11 months, and then suddenly asked for two weeks off in December to attend a cousin's wedding where his only responsibility was guarding a rented generator that cost Rs 14,500 a day. He was terrified we would say no, because he was technically using sick days for it.
The logic here is not complicated. A company that offers 12 sick days a year has already priced that into the cost of employment. The sick leave allowance is part of the compensation package... not a charity, not a gift. If an employee stays healthy all year and those 12 days simply vanish, the company has received a benefit it did not earn: a full year of healthy attendance at the price of unhealthy attendance.
I am not saying every employee who takes sick leaves in December is making a principled argument. Most are not thinking about hedges and compensation theory. They simply know the leave will expire and feel... correctly... that losing it is unfair. The impulse is right even if the reasoning is not fully articulated.
The company defined the number. The company kept the upside when the employee was healthy. The employee taking those days before they lapse is not a behaviour problem, and honestly I am genuinely not sure why managers still get so worked up about it every single December. It is a predictable, rational response to an asymmetric policy. The problem is the policy, not the person.
There is a deeper question here that goes beyond the mechanics of leave balances. What does a leave policy actually communicate to your team? A capped, lapsing sick leave policy communicates: "We do not fully trust you to manage your own health and time; so we will manage it for you, and we will keep any unused allowance as our efficiency gain." An unlimited policy communicates: "We hired adults. We trust them to be here when they can be, and to rest when they need to."
A common concern with unlimited leave policies is that people will take advantage. In practice, the opposite happens. When there is no scarcity, there is no incentive to hoard or game. People take leave when they genuinely need it; they come back when they are ready; and the culture of trust that the policy signals tends to generate the kind of reciprocal commitment that no capped policy ever could.
I understand that unlimited leave is not a policy every organisation can adopt overnight. There are legitimate concerns about team cover, client commitments, and the cultural shift required to make it work. But the starting point is the same regardless of the policy you choose: recognise that the December leave rush is not a character flaw. It is a feedback loop. And the feedback is about the policy, not the people.
If your employees are gaming your leave policy, your leave policy is the problem.