What is Long Service Leave? Answering the Most Common Questions about LSL [2024]

Long Service Leave (LSL) is a topic that can be confusing for employers and employees alike. Most people know it exists and know they’re eligible for it. However, LSL can be complicated. From variations in legislation to qualifying periods, there are plenty of questions and considerations attached to LSL.

As the name suggests, LSL is a much-anticipated reward for years of hard work and dedication.  Many Australians begin dreaming of how they’ll spend their LSL entitlements 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.

What is Long Service Leave?

Long Service Leave is a form of employee benefit entitlement in Australia that provides employees with an extended period of paid leave after a certain period of service with an employer.

It’s designed to reward employees for their loyalty and long-term commitment to a single employer. Long Service Leave entitlement depends on state and territory legislation, with regulations and requirements varying between locations.

What makes Long Service Leave so complex?

There are several factors that can make computing LSL entitlements confusing:

1. Variation in Legislation: As mentioned above, LSL entitlements are governed by state and territory legislation. This means that the specific rules and regulations regarding eligibility criteria, accrual rates and calculation methods can vary significantly depending on where employees work.
2. Qualifying Periods: Employees usually need to complete a minimum period of continuous service with the same employer to become eligible for Long Service Leave. However, the qualifying period can vary between states and territories. Some states require as little as seven years, while others require up to ten or more years of service.
3. Calculation of Entitlements: Calculating Long Service Leave entitlements can be complex, especially for employees with irregular work hours or patterns. Entitlements are typically based on the employee’s ordinary hours of work and may be affected by factors such as overtime, leave taken and periods of part-time or casual employment.
4. Transferability: In some cases, employees may be entitled to transfer their Long Service Leave entitlements between employers, particularly if they change jobs within the same industry or if their new employer is subject to the same state or territory legislation. However, the rules governing the transferability of Long Service Leave can vary, adding another layer of complexity.
5. Record-keeping and Administration: Employers are responsible for keeping accurate records of their employees’ Long Service Leave entitlements and ensuring compliance with relevant legislation. For businesses with plenty of staff, or those operating in multiple jurisdictions, this can be challenging to track.

How is Long Service Leave different from annual leave?

Employees are entitled to a specific amount of annual leave every year. For most jobs, four weeks is the norm.

Annual leave accrual 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—casual workers aren’t eligible for annual leave at all.

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: LSL isn’t determined by paid work hours.

Who is entitled to Long Service Leave?

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 won’t gain 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 lets them accrue Long Service Leave across various employers and projects.

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.

Are Long Service Leave entitlements the same across Australia?

Long Service Leave entitlements vary 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 this case, 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.

As well, certain industry awards have their own Long Service Leave agreements. If an award doesn’t have a specific Long Service Leave entitlement, the entitlement is determined by state laws.

See how Long Service Leave varies state by state in our Ultimate Guide to Long Service Leave.

What happens to an employee’s accrued Long Service Leave if they leave the business they’ve been working for?

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.

Do employers pay super while their employees are on Long Service Leave?

Employees are entitled to receive super payments while they’re on Long Service Leave.

However, if they opt to receive a pro-rata payout for their unused Long Service Leave instead, there’s no requirement for super payments to be made.

Can an employer refuse a Long Service Leave request?

Employers can only refuse LSL in situations where it isn’t 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 could be legitimate reasons for refusing Long Service Leave, employers should always be cautious in these cases. 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.

The Ultimate Guide to Long Service Leave

We’ve tried to demystify Long Service Leave in this article, but we know it can be overwhelming! This is why we’ve created the Ultimate Guide to Long Service Leave—it’s a handy resource to have when you want a refresher on LSL.

Get your copy of the Ultimate Guide to Long Service Leave here.