27 February 2023
Long Service Leave is one of those things that is often confusing for many business owners. They know that it exists and they know that they are liable for it, but there isn’t as much emphasis on it as there is with the other types of leave. In saying that, we thought it might be useful to answer some commonly asked questions about Long Service Leave.
Long Service Leave is a much-anticipated reward for years of hard work and dedication, and many Australians begin dreaming of it early in their careers. Whether it’s traveling in a caravan, going overseas, pursuing further education, or exploring a personal interest, Long Service Leave provides a well-deserved break.
However, navigating Long Service Leave can be challenging for both employers and employees. Who qualifies for LSL, and when can it be taken? Can Long Service Leave be transferred between employers, or is it possible to receive payment instead of taking leave?
After working for the same employer for a certain period, employees are entitled to paid leave known as long service leave. Additional Long Service Leave, beyond the initial entitlement period, is granted every few years as long as the employee continues their current employment.
The length of time required before an employee is eligible for Long Service Leave varies across different states. Additionally, the amount of paid leave an employee is entitled to also varies.
As per their award and the National Employment Standards, employees are entitled to a specific amount of annual leave every year, with four weeks being the norm for most jobs. The accrual of annual leave is continuous and based on the number of paid work hours. It continues to accrue even when an employee is on annual leave, sick leave, or long service leave. However, only permanent employees are eligible for annual leave, and casual workers are not.
In contrast to annual leave, eligibility for long service leave is based on the number of years an employee has worked for the same employer. It is not determined by paid work hours.
Long service leave is available to all types of employees, including casual, part-time, and full-time workers, as long as they have worked for the same employer for the required period of time.
Freelancers and contractors generally do not have access to long service leave entitlements, except for those working in certain industries such as mining, cleaning, or construction. For instance, builders in NSW and Victoria can register with the Long Service Leave Scheme, which enables them to accumulate long service leave across various employers and projects.
The long service leave entitlements for federal employees or those employed by local governments may differ from the standard entitlements.
In some cases, employees who have completed the majority of their service overseas in multinational companies may not be eligible for long service leave. Additionally, employees who leave an employer before completing five years of service are typically not entitled to long service leave.
Long service leave entitlements are subject to variation based on the state in which an employee is employed. If the period of employment began before 1 January 2010, then long service leave entitlements may be based on a federal ‘pre-modern’ award. In such a scenario, federal agreements supersede any state-based entitlements.
For employment periods commencing after 2010, long service leave entitlements are regulated by state or territory laws.
In most states, the long service leave entitlement is similar. Across most of Australia, employees are entitled to 8.6 weeks of long service leave after completing 10 years of continuous service.
It is worth noting that certain industry awards have their own long service leave agreements. If an award does not have a specific long service leave entitlement, the entitlement is determined by state laws.
After 5 or 7 years of service, depending on the state, pro-rata arrangements are offered to employees, with remuneration at their regular rate of pay. This rate includes loading for casual employees.
Employees who have worked for their employer for a period between 5-7 years (depending on the state) may be eligible to claim their accrued long service leave on a pro-rata basis. In addition, employees who are moving to an associated business or are covered by a portable long service scheme may be able to transfer their long service leave entitlements to their new employer. If there is a change in business ownership, employees are also entitled to transfer their long service leave.
While employees are on long service leave, they are entitled to receive super payments. However, if they opt to receive a pro-rata payout for their unused long service leave instead, there is no requirement for super payments to be made.
Long service leave may only be refused by employers in situations where it is not practical for the business to allow it. Additionally, employers may require that employees take their long service leave in one continuous period and may refuse requests to take it in multiple periods. If an employee fails to provide sufficient notice, their request for long service leave may also be refused.
Although there are legitimate reasons for refusing long service leave, employers should be cautious as this could lead to potential issues with employees. Employees have a right to long service leave, and if they feel that they have been mistreated, they may report the matter to a union or the Fair Work Ombudsman. Employers should ensure that they fulfill their obligations and recognise the contribution employees have made to their business.
That is were Now Actually can help. We can help you work through your Long Service Leave obligations and manage how it might impact your business. For assistance, email [email protected]
