Policies set limitations on how your teammates can use certain availability statuses. First, a policy defines whether or not a particular status request requires an administrator's approval. Second, a policy may include limitations on how many days a status can be used in a given period and how these days can be earned or spent.
Let's say that your teammates can have 28 total vacation days per year, and you'd like them to ask for an administrator's approval first. You can add a policy that does exactly that. Team members assigned to this policy will see their vacation days balance when submitting vacation requests.
Another example: maybe you have a rule in your team that everyone can work from home for two days a week. You don't want to enforce that strictly, but you'd like to notify people when they are over the limit. If you create such a policy in Teamplify, people would be able to use as many "Remote work" days as they want, but if it's more than two days per week - they'll see a warning.
First, go to the Policies section in Organization Settings. There could already be a policy created for your workspace by default, or you can add a new one. Then, define limitations that this policy should enforce. Finally, assign team members to the policy: go to the Members section, select a team member, click on the Statuses tab, and assign the policy there.