A guide to long service leave entitlements in Australia.

Long service leave (LSL) is one of the most valuable entitlements for employees in Australia.

It serves as a reward for long-term service to an employer, but navigating the complexities of when, where, and how it applies can be challenging for both employers and employees.

This comprehensive guide answers your questions about long service leave, including eligibility, accrual, cashing out, and more.

What is Long Service Leave (LSL)?

Long service leave is a paid leave entitlement granted to employees after they have worked for the same employer for an extended period. The purpose of this leave is to reward loyalty, with employees earning more leave after longer periods of service. The specific duration of required service and the amount of leave granted varies across different states in Australia.

Long Service Leave vs. Annual Leave: What’s the Difference?

Both annual leave and long service leave are forms of paid time off, but they differ significantly:

Annual Leave:

Employees are entitled to accrue annual leave continuously, with most employees receiving four weeks per year. This leave accrues based on paid hours worked, and it continues to build up even while on other leave (e.g., sick leave or long service leave).

Long Service Leave:

Unlike annual leave, long service leave is granted based on years of continuous service with the same employer. Employees become eligible for long service leave only after reaching a certain length of employment, typically 5 to 10 years, depending on the state or territory.

Who is entitled to Long Service Leave?

In general, full-time, part-time, and casual employees are all entitled to long service leave if they meet the necessary length of service requirements. However, certain workers like freelancers and contractors may not be entitled unless they work in specific industries such as construction, mining, or cleaning.

Additionally, some employees working for multinational companies or those who predominantly work overseas may not qualify for long service leave. Casual employees receive long service leave with an additional “casual loading” added to their normal rate.

Are Long Service Leave entitlements the same across Australia?

No, long service leave entitlements differ between states and territories in Australia.
While most states share similar provisions, there are variations in the specifics.

For example, most states provide employees with 8.6 weeks of long service leave after 10 years of continuous service, but some regions like South Australia may offer more generous entitlements.

Here’s a breakdown of long service leave across different states:

NSW: Employees are entitled to 2 months (8.67 weeks) after 10 years of service, with an additional month for every 5 years of service.

VIC: Eligible employees are entitled to long service leave after 7 years of service, with the option to take leave in advance or at half pay.

TAS: Employees are entitled to 8⅔ weeks after 10 years and 4⅓ weeks every 5 years thereafter.

QLD: After 10 years of service, employees receive 8.67 weeks of leave, with additional leave granted after further service.

WA: Employees in WA are entitled to 8.67 weeks after 10 years, and 4.33 weeks every 5 years after that.

SA: Long service leave entitlement starts at 13 weeks after 10 years of service, with additional leave accrued annually.

ACT: Employees are entitled to 6.06 weeks after 7 years, with more leave accrued annually thereafter.

Can employees cash out Long Service leave?

In some circumstances, employees may be able to cash out their long service leave, depending on the laws of the state or territory. Typically, cashing out long service leave is allowed when an employee resigns or after they’ve reached the minimum period of service required for entitlement (usually 5-7 years).

However, this depends on the specific rules governing the jurisdiction or the workplace agreement.

Can employees accrue Long Service Leave?

Yes, employees begin accruing long service leave from day one of their employment. However, they cannot access it until they have worked for the requisite time (usually 5-10 years). After this point, employees continue to accrue long service leave each year, though the rate of accrual can differ depending on the state or territory.

What Happens to accrued Long Service Leave if employment ends?

If an employee leaves their job after meeting the minimum service requirement, they may be eligible to receive a pro-rata payout for their accrued long service leave.

This is particularly common if the employee has worked between 5-7 years, depending on the region.

In some cases, if an employee moves to a different employer within the same industry, they may be able to transfer their long service leave entitlement.

Do employers pay superannuation while employees are on Long Service Leave?

Yes, employers are required to continue paying superannuation on long service leave, as they would during any period of paid leave. However, if the employee opts to cash out their long service leave, superannuation contributions are typically not required.

Can an employer refuse a Long Service Leave request?

While employers are expected to honour long service leave entitlements, there are some circumstances where a request may be refused.

These include:

• The business is experiencing operational difficulties, making it impractical for the employee to take leave at that time.
• Insufficient notice is given.
• The employer requires the employee to take the leave in one continuous block (rather than in multiple periods).
• Employers should tread carefully when refusing long service leave requests to avoid potential legal issues, including complaints to the Fair Work Ombudsman.

Managing Long Service Leave:

Tracking and managing long service leave can be complex, especially with the varying rules across states and territories. Modern HR software can help streamline the process by maintaining accurate records, automating calculations, and ensuring compliance with local regulations. By using integrated HR systems, employers can efficiently manage employee leave and maintain compliance with entitlements.

Conclusion:

Long service leave is a valuable benefit that rewards employees for their loyalty and long-term service.

Understanding how long service leave works, the eligibility requirements, and the rules for each state can help both employers and employees navigate this entitlement with confidence.

Make sure to keep up to date with the latest regulations and consider using HR management tools to simplify the process.
Calculate long service leave, employers are required by law to keep accurate records of all ordinary hours worked by each employee.

Happy HR has a fully integrated time sheet and payroll function to make managing LSL easier!

Disclaimer:

The views expressed in this blog are general information only, are provided assist employers and their staff and this blog should not be relied on as professional advice.

The Information is based on data supplied by third parties. You should undertake your own research and to seek professional advice before making any decisions or relying on the information in this blog.