This time of year, more than any other, child care providers battle to keep the children in their care (and their staff) healthy. The most effective way of doing this, other than simple handwashing, is having a strong illness exclusion policy and following it at all times. I once worked in a program that had good policy, but implemented it on a case-by-case basis. We had a lot of illness spread through that program.
Your illness exclusion policy must meet the minimum requirements set forth by your local licensing agency. If these requirements are pretty minimal, you have the right to make your own policy stronger. The National Resource Center for Health and Safety in Child Care and Early Education's publication Caring for Our Children is an excellent resource and can be found at: http://nrckids.org/CFOC3/index.html
Communication is also key in implementing a solid illness exclusion policy. Staff must understand the requirements of the policy, including when and how to exclude children from care. Parents must be informed of the policy before enrolling their children, reminded periodically, and be informed exactly of why their child is being sent home at a particular time and when their child can return to care.
One of the best things we ever did, after many unpleasant discussions with parents who didn't think their children were sick, was to develop a form to go home with each child being excluded for illness. The form is carefully coordinated with our illness exclusion policy. It provides a simple explanation of our policy, why, precisely, their child is being excluded and what criteria must be met before the child can return to our care. This one simple form, when used consistently, has saved us a lot of heartburn. If you want to use ours, instead of spending hours developing your own, you can find the form, and our illness exclusion policy, at: http://daycaretools.com/DaycareProducts.aspx#Health
Here's hoping for a relatively painless cold and flu season!