Long Service Leave (LSL) first came about in the 19th century so colonial workers could take extended leave to return home to the UK. Now, thanks to Government legislation, LSL is an entitlement of most employees within Australia. It was governed to encourage an extended break from work after usually 10 years of continual service with the one employer.
Under the Long Service Leave Act 1955, once an employee reaches 10 years of continual service with an employer, they become eligible for Long Service Leave. This time can then be taken by the employee for an extended break or in some cases can opt to receive a cash out of the leave entitlement.
In the building and construction industry however, workers can move between employers due to contract tenures and work availability, therefore it is difficult to accrue 10 years continuous service. The Long Service Corporation is an entity that administers long service on behalf of employees and employers and provided a portable service to building and construction workers in NSW. The Long Service Corporation enables eligible workers to work for various employers or as sub-contractors and recognises their years of continuous work via an online membership portal.
Employers register with the Long Service Corporation and advise the corporation who worked for them each year so records can be kept of an employees service. Self-employed workers can also register themselves so they too can access long service entitlements. Eligible workers receive a cash payment upon 10 years service in the industry. This is paid at 8.67 weeks for 10 years of recorded service based on award rates of pay or the rate of pay under a registered enterprise bargaining agreement.
Where an employee is eligible for long service recognition under both schemes (Government and the Corporation), they must nominate which benefit they will access. An eligible employee can opt to take their leave entitlement under the Long Service Leave Act 1955 or receive the payout from the Corporation.
There is no cost to employers or workers to be in the scheme, however, employers do have legal guidelines to follow. As an employer it is essential you are registered so your employees and contractors are receiving their full entitlements. As an employee, ensure your employer is registered so you can access your entitlement once you become eligible.
If you are not registered with the Long Service Corporation or would like to know more about your entitlements or obligations, please visit their website or feel free to contact us for a confidential chat.
Considering moving from an employee to a contractor? Find out what you need to know and the tax implications with being self-employed here.