Are you aware that your staff may be entitled to long service leave? If they’ve worked for the same employer for 10 years or more, chances are they qualify.
Long service leave is a benefit provided to long-term employees, offering an extended period of paid time off — usually between two and three months. Eligibility typically begins after seven to ten years of continuous service, although the exact timing depends on the regulations in your state or territory.
Recently, long service leave has been in the news, with companies like Woolworths and Commonwealth Bank being fined for failing to properly pay employees their entitlements.
Staff long service leave entitlements
Most long-serving employees are entitled to long service leave, but the details vary depending on where you live. According to the Fair Work Ombudsman, it forms part of the National Employment Standards (NES), which are the minimum employment conditions for all Australian workers.
“Most employees and employers fall under state-specific laws for this, so when you’re entitled will vary based on those regulations. In Queensland, employees are entitled to 8.6667 weeks of long service leave after 10 years of service.”
Dr. Ben French – a lecturer at Griffith University Business School
It’s important to know that this special type of leave also applies to casual and part-time workers, with the leave calculated on a pro-rata basis. Even small businesses are required to provide long service leave for their eligible staff.
Employees often don’t realise they qualify for long service leave. It’s a legislative right for full-time, part-time, and casual employees. This is particularly important for casuals, who may not be aware of their entitlement.
Casual workers who qualify should also ensure their casual loading (typically 25%) is included in their leave calculation. Public servants with 10 years of continuous service in the Commonwealth government are entitled to three months of leave, with part-time workers receiving a pro-rata entitlement. Some state public servants, such as teachers, may carry their long service leave when moving to a new workplace, depending on state laws.
Given that only one in six Australians stays with the same employer for 10 years or more (according to the Australian Bureau of Statistics), several states and territories have introduced portable long service leave in industries like construction, security, and community services. This allows workers to carry their entitlements with them even when they change employers, funded by a small levy.
Who is responsible for managing it?
Long service leave is accrued from the date a staff member starts working, and continues to build while they take paid leave. However, if they take unpaid leave or change their working arrangements, their eligibility for it might change.
It is the employer’s responsibility to correctly calculate and provide leave entitlement, based on the laws in their respective state or territory. Australia is known for having one of the most complex industrial relations systems in the world, but employers are ultimately responsible for making sure their workers receive the leave they’re entitled to, Despite some large companies recently being fined for underpayment, the complexity of the system is no excuse. Big companies should have the systems in place to avoid these mistakes.
Can you cash out long service leave?
In most cases, long service leave cannot be cashed out while the staff member is still employed, as per the Fair Work Ombudsman. However, there are exceptions. In Western Australia, employers and employees can agree to cash out some or all of their leave entitlement once it has been fully accrued.
In Queensland, if you face financial hardship or have urgent personal or family needs, you may be able to cash out part or all of your leave entitlement.
In most states, if you leave a job after accruing long service leave, you’ll be paid out the leave as part of your final wages. If you are made redundant after at least seven years of service, most jurisdictions will pay a pro-rata amount. In some states, you can even be paid a portion of your entitlements if you leave voluntarily after seven years.
Again, this depends on the jurisdiction and employer policies, but it’s generally covered under relevant legislation or enterprise agreements.
By making sure you understand your staff’s rights (and your obligations as an employer) when it comes to their leave, you ensure you abide with the relevant legislation, to give your staff the time off they deserve for their long-term commitment. If you have any questions relating to this subject, feel free to contact us.