Absenteeism—being absent from work without a valid reason—is a chronic problem for U.S. employers, conservatively costing $3,600 per hourly employee per year, and $2,650 per salaried employee per year. Based on this, a company of 5,000 hourly employees will lose over $18 million per year without a strong absence policy. But being physically present isn’t always the best thing for overall productivity.

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Running a bit late? Overslept or got caught in traffic? It happens to the best of us. In fact, over 1 in 4 workers (29%) admit to showing up to work late at least once a month. While the occasional late start is understandable, chronic absenteeism and tardiness significantly drain productivity—The CDC estimates that absenteeism costs U.S. employers $225.8 billion annually, or $1,685 per employee! In this article, we’ll explore how to develop a reasonable attendance policy.