Long service leave changes: what do you need to know?

Businesses that operate in Victoria will need to prepare for the significant changes to employee entitlements

Long service leave changes: what do you need to know?

The new Long Service Leave Act 2018 comes into effect on 1 November 2018 in Victoria, and businesses that operate there will need to prepare for the significant changes.

The updated legislation will impact the Long Service Leave entitlements of all Victorian employees who were previously covered by the Long Service Leave Act 1992, according to senior employment adviser, from Employsure, Natalie Clark.

Moreover, it also applies to companies who may be based outside Victoria, but still have staff employed in the state.

Clark explained that employees will be able to request Long Service Leave after seven years of continuous service with an employer – it was formerly 10 years.

Additionally, full-time, part-time, casual and seasonal employees are entitled to long service leave, provided they have completed the required amount of continuous service.

Continuous service covers employer authorised absences on paid and unpaid leave, including parental leave (up to 52 weeks) also counting toward the period of employment for accrual purposes.

Parental leave taken beyond 52 weeks will not count as service but will not break continuity of employment.

The new Act is effective from 1 November 2018, and breaches can carry severe civil penalties.

According to Clark, it’s important that you update your payroll systems to make sure that long service leave entitlements are being correctly calculated and administered.

“Also ensure that all your relevant policies and procedures are reviewed and updated to reflect these changes,” Clark added.

“Victorian employers and businesses should have their policies and documentation reviewed by an expert to ensure their business is compliant.”

Other important considerations include:

  • Employees are allowed to take single day periods of long service leave, however no less than a full day can be requested at a time
  • An employer and an employee may agree to taking long service leave in advance prior to seven years of continuous employment
  • Employers cannot refuse an employee’s request to take long service leave unless it is on reasonable business grounds
  • Long service leave is calculated on the employee’s normal weekly hours at their “ordinary time rate of pay” on the day long service leave starts
  • It is an offence under the Act to make a payment in lieu of long service leave, except where the payment is made on termination (as above) or in accordance with the relevant fair work instrument
  • Employers must keep records relating to long service leave for at least seven years after the employment ceases

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