Long service leave – an overview (2023)

How can employees take LSL?

  • by agreement between the employer and employee, LSL can be taken for any period of not less than one day, at a time agreed by the parties
  • an employee can request to take LSL at any time after 7 years’ continuous employment
  • an employer may agree to an employee taking LSL in advance of having completed 7 years continuous service with the employer
  • an employee can request to take a period of LSL for twice as long as the period to which they are entitled, at half their ordinary pay
  • the employer must grant leave as soon as practicable following the employee’s request unless the employer has 'reasonable business grounds' for refusing the request
  • an employer may direct an employee to take leave by giving at least 12 weeks’ written notice. If the employee does not want to take their leave at the time nominated by the employer, they can apply to the Industrial Division of the Magistrates’ Court.

You can also visit our page How long service leave can be taken.

How do I calculate long service leave?

The Victorian Government's online calculator assists both employees and employers covered by the Long Service Leave Act 2018 (LSL Act 2018) to calculate long service leave (LSL) entitlements.

You'll be prompted to fill in employment dates and any leave already taken, and an answer will be provided in seconds.

Although answers provided by the calculator should be accurate, we advise you have LSL entitlements verified by an independent party, such as your payroll office, union or a legal adviser.

Use the long service leave calculator

Comprehensive Guide to the Victorian Long Service Leave Act 2018

Please see Comprehensive Guide to the Victorian Long Service Leave Act 2018.

Who does the LSL Act 2018 apply to?

  • Most Victorian employees (excluding employees under some Commonwealth enterprise agreements and pre-reform awards, and other Victorian laws). Categories/types of employment generally include: full time, part time, casual, seasonal and fixed term.
  • Employees under certain labour hire arrangements.

Who does the LSL Act not apply to?

  • The LSL Act 2018 may not apply to employees who are covered by a federal award or workplace agreement – individual or collective – where that award or agreement contains its own LSL provisions.
  • The LSL Act 2018 does not apply to employees who have their long service entitlement provided by another act or regulation – such as workers in building and construction, where it's provided by the CoINVEST scheme.

To determine whether an award or agreement applies instead of the LSL Act 2018, call the Fair Work Ombudsman on 131394.

How long do employees have to work to be eligible for LSL?

An employee will be entitled to take LSL after completing a minimum of 7 years' 'continuous employment' with 'one employer'.

For more information see: LSL Act 2018 Fact Sheet 2 - taking LSL (DOCX 237.67 KB)

Visit our page on Long service leave: continuous employment for more information.

How do I calculate payment for LSL?

LSL is calculated as the total number of weeks' employment divided by 60 and multiplied by the ordinary weekly rate of pay at the time the leave is taken, or when the employee ceases employment.

(Video) Victoria's Long Service Leave Act 2018

Use the long service leave (LSL) calculator

For further information see ourHow long service leave can be taken page.

What happens if employment is terminated?

Employees are entitled to take LSL after a minimum of 7 years’ continuous employment. If employment ends after 7 years’ for any reason, the employee must be paid any unused LSL entitlement. The amount is to be paid in full on the final day of employment.

You can also visit our page Long service leave: employment termination.

Impact of other types of leave on LSL

All forms of paid leave count towards the period of continuous employment for LSL accrual. Examples include: annual leave, carer’s leave, and long service leave.

However, unpaid leave exceeding 52 weeks will not count unless:

  • the period of absence is taken to be a period of employment in accordance with the relevant written or oral employment agreement
  • the employee and employer agree in writing before the leave is taken that the leave is taken to be a period of employment
  • the leave taken is because of illness or injury
  • the leave is any other form of leave provided for in the relevant written or oral employment agreement.

You can also visit our page Long service leave: continuous employment for more information and examples about the impact of other types of leave on LSL.

What about casual and seasonal employees?

The LSL Act 2018 entitles full time, part time, casual, seasonal and fixed term employees to LSL where their employment has been 'continuous'. Under the LSL Act 2018, this means that there must not be an absence of more than 12 weeks between any two instances of employment, unless:

  • the employee and the employer so agree before the start of the absence
  • the absence is in accordance with the terms of the engagement
  • the absence is caused by seasonal factors
  • the employee has been employed on a regular and systematic basis and has a reasonable expectation of being re-engaged.

Independent contractor vs employee?

Genuine independent contractors are not employees and are generally ineligible for LSL under the LSL Act 2018. However, whether a person is truly an independent contractor or employee needs to be assessed on a case by case basis.

(Video) Accounting for Long Service Leave

For an assessment of whether a person is a genuine independent contractor or an employee you can speak to the Commonwealth Independent Contractors Hotline on 1300667850.

Business owners are usually not employees and are ineligible for LSL provided by the LSL Act 2018.

You can also read ourexamples of how long service leave is calculated.

What happens if the business is sold?

If a business is sold and the purchaser employs an employee of the former owner, the new employer is responsible for their entire period of employment with the business.

To account for the value of the entitlement, sometimes a trust fund is established, or the liability may be factored into the sale price of the business.

Irrespective of the arrangement, the new employer will automatically be responsible for the employee’s period of employment with the former owner and themselves. If the new owner fails to recognise the employment with the former owner and fails to pay the correct LSL to employees, they will be in breach of the LSL Act 2018. A breach of the LSL Act 2018 is a criminal offence and an employer may be liable for a fine and a criminal conviction, and other costs and penalties.

Any LSL entitlement with the former owner should not be cashed out to the employee by the former owner.

You can also visit our page Long service leave: change of employer for more information.

Can employees cash out their LSL?

LSL cannot be 'cashed out' – it is an offence under the LSL Act 2018 to give or receive payment instead of the employee actually taking the break from work.

Visit our page on how long service leave can be taken for more information.

(Video) Victoria's long service leave laws

Are there penalties for breaching the LSL Act 2018?

Yes, there are criminal penalties for breaching the LSL Act 2018.

The LSL Act 2018 creates offences, including under section 9(2) where an employer fails to pay an employee their LSL entitlement on the day employment ends. An authorised departmental officer may prosecute for a breach of the LSL Act 2018. The penalty for this offence is 12 penalty units for a natural person, and 60 penalty units for a body corporate. Penalties can apply for each day during which the offence continues.

The value of a penalty unit varies from time to time and is updated on 1 July each year. From 1 July 2018, one penalty unit is $161.19 – meaning a fine of 12 penalty units is $1,934.28, and 60 penalty units is $9,671.40.

If an employer is found guilty of this offence, a criminal conviction may also be recorded.

An employee or their personal representative may seek to recover unpaid entitlements through a civil claim in the Industrial Division of the Magistrates’ Court within 6 years of the day their employment ends.

Other offences

Adverse Action

There are also penalties for employers who engage in adverse action against their employees in relation to LSL.

Adverse action is defined to include dismissing an employee, altering the position of an employee to their prejudice, or discriminating against the employee. It is an offence under the LSL Act 2018 for an employer to take adverse action against an employee because:

  • the employee has an entitlement under the Act
  • the employee seeks to exercise an entitlement under the Act
  • the employee enquires about their entitlements under the Act
  • the employee challenges a direction to take LSL in the Magistrates’ Court.

It is also an offence to make false or misleading representations about an employee’s LSL entitlements.

There are potentially significant penalties and orders that a Court may make against an employer for engaging in adverse action, including up to 52 weeks’ remuneration.

For more information, see Long service leave: penalties for breaches.

Failure to keep records under the LSL Act 2018

An employer must keep accurate records of the employee’s LSL during the entire period of employment and retain these for at least seven years after the employment ceases.

Records must be kept in the form (if any) prescribed by the regulations made under the LSL Act 2018.

(Video) Rights & Responsiblities of Employers: Long Service Leave Entitlements

The Fair Work Act 2009 (FW Act), which applies to all Victorian businesses, also requires that employment records be kept, and that pay slips be provided to employees.

It is an offence to fail to keep records in the manner prescribed by the LSL Act 2018. The penalty for this offence is 12 penalty units for a natural person, and 60 penalty units for a body corporate. If an employer is found guilty of this offence, a criminal conviction may also be recorded.

An employer must not refuse a request from an employee to provide their long service leave record. The penalty for this offence is 12 penalty units for a natural person, and 60 penalty units for a body corporate.

Visit our page on Long service leave: penalties for breaches for more information.

Should I factor LSL into my cash flow?

Making sure your cash flow is in order is one of the most important steps in making a business successful. Make sure you factor staff LSL into your cash flow forecasting so you don't get caught short.

Plan ahead and get on top of your cash flow forecasting.

Do I have to keep LSL records?

It is an offence for an employer to fail to maintain records. It is also an offence to make a false or misleading statement in a record.

An employer must not refuse a request from an employee to provide their LSL record. The penalty for this offence is 12 penalty units for a natural person, and 60 penalty units for a body corporate.

Authorised officers can require a person to provide information or documents for the purpose of monitoring and enforcing compliance with the LSL Act 2018. Subject to certain rules, it is a criminal offence not to provide information or documents sought by an authorised officer in accordance with the LSL Act 2018. It is also a criminal offence to produce a false document.

Long Service Leave Act 2018 fact sheets

These fact sheets are summaries only and must be read in conjunction with more detailed information such as the Comprehensive Guide to the Victorian Long Service Leave Act 2018 to establish whether the advice contained within applies to your individual circumstances.

  • LSL Act 2018 Fact Sheet Index (DOCX 237.41 KB)
  • LSL Act 2018 Fact Sheet 1 - the basics (DOCX 238.44 KB)
  • LSL Act 2018 Fact Sheet 2 - taking LSL (DOCX 237.67 KB)
  • LSL Act 2018 Fact Sheet 3 - LSL and termination of employment (DOCX 169.21 KB)
  • LSL Act 2018 Fact Sheet 4 - LSL casual and seasonal employees (DOCX 235.73 KB)
  • LSL Act 2018 Fact Sheet 5 - 'one employer' (DOCX 235.8 KB)
  • LSL Act 2018 Fact Sheet 6 - accrual of LSL - impact of leave, absences and interruptions (DOCX 236.63 KB)
  • LSL Act 2018 Fact Sheet 7 - entitlement to take leave and 'ordinary pay' (DOCX 256.29 KB)
  • LSL Act 2018 Fact Sheet 8 - record keeping (DOCX 238.54 KB)
  • LSL Act 2018 Fact Sheet 9 - penalties and enforcement (DOCX 235.56 KB)
  • LSL Act 2018 Fact Sheet 10 - parental leave (DOCX 238.32 KB)
  • LSL Act 2018 Fact Sheet 11 - interaction between the LSL Act 2018 (Vic) and other LSL legislation (DOCX 238.04 KB)

Get help with long service leave

Wage Inspectorate Victoria is responsible for regulating long service leave in Victoria.

(Video) Masterclass Series - Recording Long Service Leave

For further assistance and advice about long service leave, contact the Wage Inspectorate online or call 1800 287 287.

We welcome any feedback, comments and suggestions you might like to share.

You also have the option to make an anonymous report if you suspect someone is breaking the rules relating to long service leave but you don’t want to provide personal information.

Handy tools

  • Comprehensive Guide to the Victorian Long Service Leave Act 2018

FAQs

How does long service leave work Vic? ›

Long service leave accrues at a rate of one week for every 60 weeks of continuous service – that's about 0.866 of a week each year. Employers must keep long service leave records and provide them to current or former employees on request.

How much long service leave do you get after 7 years in Victoria? ›

Employees are entitled to leave after seven years continuous employment. This is calculated by dividing the period of employment by 60. For example, if the employee has worked for 7 years, dividing this by 60 equates to approximately 6.1 weeks.

How much long service leave do you get after 15 years in Victoria? ›

Long service leave after 15 years continuous service An employee is entitled to 13 weeks of long service leave after completing 15 years of continuous employment. For each further 5 year of continuous service, the employee is entitled to an additional 4 1/3 weeks of long service leave.

Can an employer refuse long service leave Victoria? ›

An employer must not refuse a request from an employee to provide their long service leave record. The penalty for this offence is 12 penalty units for a natural person, and 60 penalty units for a body corporate.

Do you get paid super while on long service leave? ›

As long-service leave (LSL) is paid leave, so benefits are not affected and contributions remain payable. Long service leave can be taken at double pay, single pay or half pay. Whichever way it is taken it is treated for superannuation purposes as if it had been taken at the single pay rate.

Can you resign while on long service leave? ›

An employee can resign while they're on leave or before they take leave. When this happens, they need to give their employer any required notice. Employees should check the relevant award, enterprise agreement or contract of employment for rules about giving notice.

Do you get paid long service leave if you resign Victoria? ›

On the day that employment ends, an employee with at least 7 years' of continuous service with one employer is entitled to receive – in full – payment for any long service leave (LSL) not taken. This will apply whether the employee has: resigned – see our example below. had their employment terminated by the employer.

How many weeks do you get for 10 years service? ›

If you've been with the same employer for 10 years, you're entitled to 2 months (8.67 weeks) paid leave, to be paid at your ordinary gross weekly wage.

How is LSL payout calculated? ›

calculated by multiplying the average number of hours worked each week by the employee during the period of 12 months immediately preceding the day on which the employee became entitled to the leave by the ordinary remuneration of the employee on that day.

What counts as a break in continuous service Australia? ›

Termination of employment breaks continuous service. This means that service before the termination won't count towards continuous service if they're re-employed by the same employer.

How do you calculate years of service for long service leave? ›

The Long Service Leave Act 1955 provides full-time, part-time and casual workers in NSW to 2 months (8.6667 weeks) paid long service leave on completion of ten years' service with the same employer and one month of paid leave for each additional five years' service.

How do you calculate long service? ›

[(Last month wages x 2/3) x reckonable years of service]

Note that service of an incomplete year should be calculated on a pro-rata basis. For details of the calculation of long service payment or severance payment, please refer to “A Concise Guide to the Employment Ordinance”.

Does sick leave get paid out when you resign in Australia? ›

Sick and carer's leave is not paid out when employment ends.

Does long service leave get paid out when you resign in Australia? ›

Any unused long service leave has to be paid out at the end of employment. Long service leave usually can't be cashed out while the employee is still working for the business.

Can an employer force you to take long service leave Australia? ›

Your employer is under no obligation to grant either pro-rata leave or a pro-rata payment. You are only entitled to long service leave once you have completed 10 years' service. Similarly, your employer cannot force you to take long service leave (or a payment in lieu) before you have completed 10 years' service.

Is it better to take leave or get paid out? ›

Another advantage of taking leave rather than cashing out as a lump sum is that usually your employer will continue to pay the normal superannuation % on that leave when it is taken as a regular leave payment. This is contrasted to taking the lump sum no super guarantee % is applied to a lump sum of leave paid out.

Do you pay Medicare levy on long service leave? ›

Welcome to our Community. In answer to your first question, there isn't a Medicare levy surcharge (MLS) exemption for unused long service leave and annual leave paid on termination. If the unused leave forms part of your taxable income, it will also be included in your income for MLS purposes.

Is superannuation payable on long service leave ATO? ›

The short answer is no, unless the award, agreement, contract or rules of the super fund requires it.

Is it OK to resign via email? ›

An email resignation may be acceptable, but it's not professional and could harm your career. Your boss could take it personally and choose to provide a less than complimentary reference, or refuse to give one at all.

What are my entitlements when I resign? ›

In New South Wales, you are generally entitled to two months long service leave after working for the same employer for 10 years. You are entitled to an extra month of leave for every five years after that.

Can I hand my notice in while off sick? ›

If you hand in your notice while on sick leave there is no obligation on you to return to work if you are not well enough to do so. Your normal contractual terms and conditions remain the same during the notice period.

Can you cash out annual leave in Victoria? ›

A request for cashing out of annual leave can only made once during the term of the Agreement and must be agreed between the Employee and the Employer. A cashing out request can only be agreed if the cashing out would result in the Employee having four weeks or more accrued annual leave still owing to the Employee.

Can I retire after 10 years of service? ›

Normal Retirement:

With 10 years of service you are vested. You are eligible to receive benefits upon reaching age 60.

How much notice do you need to give if you have 2 10 years of service? ›

Minimum period of notice
Duration of employmentMinimum notice
2 years to 5 years2 weeks
5 years to 10 years4 weeks
10 years to 15 years6 weeks
15 years or more8 weeks
1 more row
23 May 2022

Can you retire after 15 years of service? ›

The FY 2012 National Defense Authorization Act (NDAA), Public Law 112-81, enacted 31 December 2011, authorized the military services to offer early retirement to Service members who have completed at least 15 years of active service. This is a discretionary authority and not an entitlement.

How do you convert LSL weeks to hours? ›

Calculation: For an employee working 38 hours: 0.01666666 (weeks) * 38 hours worked = 0.63333333 hours LSL accrual. For an employee working 19 hours: 0.01666666 (weeks) * 19 hours worked = 0.31666666 hours LSL accrual.

How many days of working in a year is considered as a year for continuous service? ›

An employee shall be deemed to be in continuous service if he was actually employed during 12 months preceeding the year for not less than 240 days.

What is the 5 year break in service rule? ›

The break in service rules allow a plan to disregard certain service before the employee has 5 consecutive 1-year breaks. If all of an employee's service with an employer is counted for vesting, the plan need not provide these rules.

What counts towards continuous service? ›

Continuous service is worked out in months and years, starting with the date you began work for your employer. If there is a break in your employment then normally none of the weeks or months before that date will count as continuous service.

How is long service leave calculated pro rata? ›

Long service leave is paid out at the ordinary rate of pay of the employee for their normal weekly hours. Ordinary rate of pay means the greater of: the amount of the ordinary remuneration as at the time they take the leave; or. the average weekly remuneration they earned in the previous 5 years.

What is the average length of service? ›

Industry In January 2022, wage and salary workers in the public sector had a median tenure of 6.8 years, higher than the median of 3.7 years for private-sector employees.

How do you determine long serve employees? ›

The Best Ways to Recognise Long-Serving Employees
  1. Commemorate early employee milestones. ...
  2. Communicate your long service awards programme to your employees. ...
  3. Make it a social event. ...
  4. Provide employees with opportunities to learn from their experiences. ...
  5. A proactive approach to long-service recognition.
10 Feb 2022

How is long service taxed? ›

How much tax do you pay on long service payments? PAYG Withholding (tax) is deducted from payments at the applicable marginal rate as required by Australian Taxation laws. The amount withheld will be calculated from the Australian Taxation Office 'weekly tax table' using the average weekly wage of your payment.

How long after I resign should I be paid? ›

Some state laws differ depending on whether the employee quit or was fired or laid off. For example, California final paycheck law requires payment of wages within 72 hours or immediately if the employee gave at least 72 hours' notice.

Can you go off sick and resign? ›

Can I be off sick during my notice period? Yes, you can be off sick and you will be entitled to receive your normal rate of pay, contractual sick pay or SSP, unless you have exhausted this already prior to your notice period commencing.

Do I have to pay my employer if I resign? ›

The UAE's Labour Law - Federal Decree Law No. 33 of 2021- stipulates when an employee may be legally liable to pay his or her employer a compensation at the time of resigning from the job.

Why does long service leave include weekends? ›

Unlike the conditions for other types of paid leave, LSL accrues in calendar days and is therefore deducted in calendar days. This means that weekends and public holidays occurring during a period of LSL are included in the total period of LSL being taken and deducted from the employee's long service leave balance.

Do you have to report long service leave to Centrelink? ›

You must include holiday pay (including any leave loading) and long service leave payments as part of normal earnings, except when they are paid on termination of employment.

How many weeks long service leave do you get in Australia? ›

Long service leave is a period of time that you can take off work, with pay. You'll be eligible for 13 weeks' paid leave after 10 years continuous service with your current employer. You will then continue to accrue long service leave at the rate of 1.3 weeks' leave for each subsequent year of service after that.

Do all Australians get long service leave? ›

For most employees in Australia, if they have been working for the same employer for an extended period of time, they are entitled to long service leave.

Does everyone get long service leave in Australia? ›

Long service leave applies to most NSW employees who are full-time, part-time or casuals. If you have been working for the same employer for 10 years you are entitled to 2 months (8.67 weeks) paid leave, to be paid at your ordinary gross weekly wage under the Long Service Leave Act 1955 (the Act).

Is long service mandatory? ›

Employers who fail to pay long service payment to employees are liable to prosecution and, upon conviction, to a fine of $200,000 and to imprisonment for one year.

How is long service leave paid out in Victoria? ›

Employees are entitled to take LSL after a minimum of 7 years' continuous employment. If employment ends after 7 years' for any reason, the employee must be paid any unused LSL entitlement. The amount is to be paid in full on the final day of employment.

How is long service leave payout calculated? ›

Most full-time, part-time or casual employees in NSW are entitled to long service leave. If you've been with the same employer for 10 years, you're entitled to 2 months (8.67 weeks) paid leave, to be paid at your ordinary gross weekly wage.

How is LSL calculated? ›

Long service leave is calculated on the basis of 1/5 of a months leave for each year of service (Section 4 of the Long Service Leave Act 1976 (the Act)).

Can long service leave be cashed out in Australia? ›

An employee cannot 'cash out' their LSL. It is an offence under the LSL Act 2018 to give or receive payment instead of the employee actually taking the break from work. An employee can only receive payment instead of taking LSL if their employment ends before the leave is actually taken.

Do you get paid public holidays while on long service leave Victoria? ›

Any public holiday that falls during a period of leave on half pay will be paid at full pay. 1.1. Part-time and casual Employees accrue Long Service Leave on a pro-rata basis calculated on the number of ordinary hours worked. 1.2.

How many hours is 7 years long service leave? ›

Relevant Legislation: Long Service Leave Act 2018. Entitlement to take long service leave: After completing a minimum of 7 years continuous employment with one employer an employee is entitled to an amount of long service leave equal to 1/60th of the period of employment (approx. 6.1 weeks after 7 years).

How do you convert long service leave hours to days? ›

Total leave hours (for a specific leave category) divided by the employee's hours per day. For eg, if an employee works 6 hours per day and their leave balance is 32 hours, the hours to days conversion will be calculated as 32 / 6 = 5.333 days.

How is LSL calculated after 10 years? ›

Under the Act, employees are entitled to 13 weeks of long service leave upon the completion of at least 10 years of continuous employment with their employer. On top of this, they are entitled to an additional 1.3 weeks of long service leave for each full year of service after the initial 10 years.

How are end of service benefits calculated? ›

According to the law, this amount is calculated as the accumulation of half salary per each month for the first five years of employment and full salary per each month for the following years of service.

Do you get paid LSL after 5 years? ›

When is a worker entitled to Long Service Leave? The Long Service Leave Act 1955 provides full-time, part-time and casual workers in NSW to 2 months (8.6667 weeks) paid long service leave when they have completed a continuous period of ten years service with the same employer.

What is LSL on a payslip? ›

Long service leave (LSL) is a period of paid leave given to employees, both casual and permanent in recognition of a long period of service with one employer.

Is unused leave lump sum A? ›

Lump sum A is for certain unused leave that is paid out on termination.

How many weeks do you get for long service in Australia? ›

Long service leave is a period of time that you can take off work, with pay. You'll be eligible for 13 weeks' paid leave after 10 years continuous service with your current employer. You will then continue to accrue long service leave at the rate of 1.3 weeks' leave for each subsequent year of service after that.

Videos

1. Changes to Long Service Leave Laws
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2. Accounting for Long Service Leave example
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3. What to Do with Your Accumulating Long Service Leave
(Gavin Martin)
4. Webinar: Long Service Leave, Your Questions Answered
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5. Understanding Portable Long Service Leave
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6. Long service leave and resignation
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