Long Service Leave: a go to guide for employers

What is it?
Long service leave (LSL) is a period of paid leave granted to employees in recognition of a long period of service with an employer.

Pub trivia?
LSL was introduced in Australia in the 1860’s, with the benefit intended to allow public servants the opportunity to sail home to England after 10 years’ service in “the colonies”. The entitlement was 13 weeks for every ten years of service: composed of five weeks to sail back to England, three weeks of leave and five weeks to sail back.

Who gets it?
Employers and employees – with the exception of state and local government – are covered by the national industrial relations system. Where no entitlement to LSL exists under the Federal system, an employee will have an entitlement in accordance with the Industrial Relations Act 2016.

Is the entitlement the same throughout Australia?
Most employees’ entitlement to LSL comes from long service leave laws in each state or territory. These laws define:

• how long an employee has to be working to get LSL
• how much LSL leave the employee gets.

What’s the entitlement?

• The entitlement to LSL is based on a qualifying period of continuous service.
• Employees are entitled to take 8.6667 weeks of LSL after a period of 10 years’ continuous service.
• When an employee has completed their first 10 years of continuous service, they are entitled to take an additional 4.3333 weeks’ paid LSL once they have completed a further 5 years’ continuous service.

When is long service leave paid?
Any unused LSL has to be paid out at the end of employment.

Any fine print?

• In some states and territories long serving casuals are eligible for long service leave.
• LSL usually can’t be cashed out while the employee is still working for the business.
• When employment ends before an employee has worked the total number of years needed to get the full LSL entitlement, they may be eligible for a payment of part of their long service leave. This is known as pro-rata long service leave. Whether an employee gets paid out pro-rata long service leave when their employment ends depends on the long service laws in the state or territory they work in.

Where’s the go to information source?
Contact the long service leave agency in your state or territory.

Anything to make it easier?
While calculations around LSL entitlements may seem complex, employers have access to a number of online Long Service Leave calculator tools that help simplify the entitlement. The Queensland Government’s Business Queensland website has a great example.