Most Australians start dreaming of long service leave (LSL) early in their career. Whether you take off in a caravan, jet abroad, take a course or get serious about a hobby, long service leave is a well earned reward for years of loyalty.
But, long service leave can be complicated for both employers and employees. Who is entitled to long service leave and when? Does long service leave transfer across employers? Can you choose to cash out long service leave?
This guide answers all these questions and more.
What is long service leave (LSL)?
Long service leave is the paid leave that employees are entitled to after a period working for the same employer. Employees are then entitled to additional long service leave every few years, as long as they continue in their current employment.
The period of time required before an employee is entitled to long service leave varies from state to state. The amount of paid leave also varies.
What is the difference between long service leave and annual leave?
Employees are entitled to a set amount of annual leave per year, as determined by their award. For most jobs, employees are entitled for four weeks of annual leave per year. Annual leave is accrued continuously and is based on the number of paid work hours. Leave accrues even when an employee is on annual leave, sick leave or long service leave. Every employee is entitled to annual leave, apart from casual workers.
On the other hand, employees only become eligible for long service leave after they have worked for a certain period of time under the same employer. Unlike annual leave, long service leave occurs based on years of service rather than on paid work hours.
Who is entitled to long service leave?
Casual, part time and full time employees are entitled to long service leave. Long service leave applies to any employee who has worked for the required period of time for the same employer.
Employees who are exempt from long service leave entitlement
Freelancers and contractors are not eligible for a long service leave entitlement, unless they work in a one a select industry such as mining, cleaning or construction. For example, builders in NSW can register with the Long Service Leave Scheme which allows them to accrue long service leave across multiple employers and projects.
Federal employees or those working for local government may have different long service leave entitlements.
Sometimes, employees of multinational companies who complete the majority of their service overseas may also be ineligible. Employees who leave an employer before 5 years of service are ineligible for long service leave.
Are long service leave entitlements the same across Australia?
Long service leave entitlements vary depending on which state you work in. If the employment period began before 1 January 2010, then the long service leave entitlements may be drawn from a federal ‘pre-modern’ award. In this case, federal agreements override any state-based entitlements.
For employment periods starting anytime from 2010 onwards, long service leave is based on state or territory regulations.
Most states have a similar long service leave entitlement. Across most of Australia, employees are entitled to 8.6 weeks of long service leave after 10 years of continuous service.
It’s worth noting that some industry awards have their own long service leave agreements. If, however, your award does not have a specific long service leave entitlement, then long service leave is derived from state laws.
Long service leave in NSW
In NSW, most casual, part time and full time employees are entitled to 2 months (8.67 weeks) of paid leave after 10 years of service to the same employer. This leave is paid at the rate of the employees normal weekly wage.
Employees are entitled to an additional month of long service leave per five years, after their initial 10 years of service.
If an employee leaves their job after more than 5 years due to ‘incapacity, illness, or domestic necessity’ they may be entitled to pro-rata long service leave. A pro-rata long service leave entitlement is also available if the employer terminates the contract for any reason other than ‘serious misconduct’.
Most paid leave does not interrupt the accrual of long service leave. However, while parental leave does not interrupt ‘continuous employment’ it does interrupt accrual. Employees are still eligible for long service leave, however their time on parental leave does not count toward their years of service.
You can read more about long service leave in NSW here.
Long service leave in VIC
Long service leave is available to full time, part time, casual, seasonal and fixed-term employees in Victoria. Employees are eligible for long service leave after a period of 7 years service. The accruement rate in Victoria is very similar to NSW — approximately 0.866 of a week is accrued per year.
Employees can take their long service leave in advance, if their employer agrees. Employees can also take double their long service leave period at half their weekly pay rate.
No paid or unpaid leave interrupts the accrual of long service leave. Employees continue to accrue long service leave while on paid or unpaid parental leave.
You can read more about long service leave in Victoria here.
Long service leave in TAS
Most employees, of all contract types, are entitled to 8⅔ weeks of long service leave after 10 years of employment. Similarly to NSW, employees are then entitled to an additional 4⅓ weeks of long service leave for each 5 years of service.
Most paid and unpaid leave does not interrupt accrual of long service leave, including any leave required to attend training or events run by Tasmanian State Training Authority or similar committees.
Pro-rata arrangements are possible once an employee has worked for more than 7 years.
Parental leave does not interrupt ‘continuous employment’, but long service leave accrual is paused while the employee is on leave.
You can read more about long service leave in Tasmania here.
Long service leave in QLD
In Queensland, employees are entitled to 8.6667 weeks of long service leave after 10 years of continuous service. After a further 5 years of employment employees are entitled to another 4.3333 weeks of long service leave.
Those who are a full time, part time or casual employee are all eligible, as long as there is no more than 3 months break between periods of employment for the same employer.
Pro-rata arrangements are possible after 7 years of service. Further, paid leave does not impact accrual of long service leave, including paid parental leave. Unpaid leave, including parental leave, does not impact continuous employment but does interrupt accrual of long service leave.
You can read about Queensland’s long service leave regulations here.
Long service leave in WA
In Western Australia, full time, part time, seasonal and casual employees, as well as apprentices and trainees are entitled to long service leave after 10 years of continuous service. After 10 years, employees can access 8.667 weeks of paid leave and then an additional 4.333 every 5 years.
All paid leave counts toward accrual of long service leave. This includes parental leave. Most unpaid leave interrupts accrual, including unpaid parental leave.
In Western Australia, FIFO employment is common. In this case, long service leave is accrued across all weeks of employment, including ‘off weeks’.
You can read more about long service leave in WA here.
Long service leave in SA
In South Australia, full time, part time and casual employees are entitled to 13 weeks of long service leave after 10 years of service. Then, they accrue an additional 1.3 weeks of leave per year.
Employees are eligible for a pro-rata arrangement after 7 years of employment.
In South Australia, all paid leave counts toward the accrual of long service leave. This includes paid sick leave and parental leave. However, leave paid by the government’s parental leave scheme does not count and neither does unpaid parental leave.
You can read up on all the details here.
Long service leave in ACT
Full time, part time and casual employees in the ACT are entitled to 6.0667 weeks of long service leave after 7 years of service. Employees accrue a further 1.086 weeks of leave each year after this.
Leave continues to accrue during periods of annual leave and during up to two weeks of sick leave per year.
Employees are entitled to a pro-rata arrangement after 5 years of service.
Compared to the other states, there is limited information easily accessible online about long service leave in the ACT. You can read the official guidelines here.
Can employees cash out long service leave?
Pro-rata arrangements are available in every state, after either 5 or 7 years of service. The remuneration is at the employee’s normal rate of pay. For casual employees, this rate includes loading.
Can employees accrue long service leave?
Employees accrue long service leave from day one of their employment, but this remains inaccessible until they have accrued 5-10 years worth of long service leave. After this, employees accrue a small amount of leave each year. The rate of accruement differs from state to state.
What happens to an employee’s accrued long service leave if their employment ends?
If the employee has been working for the employer for between 5-7 years (depending on their state), they may be able to claim their accrued long service leave pro-rata.
If the employee is moving to an associated business or is under a ‘portable long service scheme’ they may be able to transfer their long service leave to their new employer. Similarly, if business ownership changes, employees are entitled to transfer their long service leave.
Do employers pay super while their employees are on long service leave?
Yes. Employees are entitled to super payments while on long service leave. However, if an employee takes a pro-rata payout for unused long service leave, there are no super payments required.
Make sure these details are in your leave policy.
Can an employer refuse a long service leave request?
Employers may refuse long service leave only during periods where it is impracticable for the business. Employers can also refuse to allow employees to break their long service leave into multiple periods of leave, requiring that the leave be taken in one continuous period. Requests for long service leave may also be refused if insufficient notice is given.
Although there are some defensible grounds to refuse long service leave, this can be dangerous territory for employers. Your employees are entitled to long service leave and may raise the issue with a union or the Ombudsman if they feel mistreated. Be sure you are meeting your obligations as an employer, and generously rewarding loyal service.
Managing long service leave with Employment Hero
In order to calculate long service leave, employers are required by law to keep accurate records of all ordinary hours worked by each employee. Managing leave is no easy task. Employment Hero makes it easier.
With fully integrated time sheeting and payroll functions, as well as secure cloud based document storage, Employment Hero offers an all-in-one leave management solution. Boost compliance confidence by using smart software. Employment Hero helps you keep track of your employees’ service with the click of a button and reward them fairly.
Download our Introduction to HR management guide here
Intro to HR Management
