Should it be "Late policy" or "lateness policy"?

What is late here is the submission of the assignments that the policies are about. The policies themselves are not late; one would hope that they are promulgated well ahead of the time when they are likely to be needed.

Does that mean that calling them late policies is wrong? Some people will say that it is, using the argument formulated in the preceding paragraph. Others will defend it by saying that it is a case of a transferred epithet: when something like 'the policy about late submission of assignments' is shortened, the crucial adjective late is transferred from submission to policy, and we get the late policy. Transferred epithets are a common linguistic phenomenon, and they are not inherently wrong.

It can thus be argued that either late policy or lateness policy would be OK, and that the choice is a matter of the writer's preference. However, even though transferred epithets are not inherently wrong, they tend to annoy linguistically sensitive people (unless the transferred epithet is very well established, which is not the case with late policy). Because of that, lateness policy, which is not going to rub anyone the wrong way, is a safer choice.