By Anthony El Salim
Are you an NDIS provider in NSW? There’s a good chance major changes to portable Long service leave entitlements are about to affect you.
It isn’t uncommon for workers in the community services sector to regularly change jobs and employers. And it’s for this reason that New South Wales employers in the community services sector, especially NDIS providers, have relied on their casual and contract-based workforce as reason enough to not concern themselves with long service leave. Plans revealed by the Minns Government may be set to alter how long service leave accrues for employees who work across different employers within the community services sector, by introducing a portable long service leave scheme in the state.
Why and when is portable long service leave being introduced?
Long service leave entitlements developed throughout the last century have been effective in retaining staff and incentivising loyalty. Portable long service leave schemes peculiar to each state have emerged over the last decade out of recognition that the precarious nature of certain industries and evolving methods of engaging workers have left them with no option to remain with one employer.
NSW is set to extend its portable long service leave programs – currently limited to the contract cleaning and building and construction industries – to the community services sector, including disability services.
So why introduce this new scheme to community services, disability in particular? The disability sector has an annual turnover of 25 per cent and the highest levels of casualisation in the care economy. Supporters claim that this will help mitigate the high turnover of staff in the industry and improve standards of care.
NSW Industrial Relations Minister Sophie Cotsis has made a commitment to consult with unions and employer groups to design the scheme on track for introduction to the NSW Parliament in early to mid-2024. The governments of Queensland, Victoria and the Australian Capital Territory have already introduced similar portable long service leave schemes.
This means that the scheme that might eventually be introduced in NSW isn’t yet fully defined. To anticipate how it might be introduced, we can learn from other states which have already introduced a similar scheme.
What do the other schemes look like?
The Queensland, Victoria, and ACT schemes all make specific reference to ‘disability support’ as part of the definition, even where for-profit. Given that this is the main media focus of the introduction of community services portable long service leave in NSW for the Minns Government, this is likely to remain the case.
How is portable long service leave calculated in other states?
The other schemes are all implemented through the same process.
- Employers are first required to register with the authority in charge of administering portable long service leave in the state if they operate in the relevant industry.
- Employers must then submit a quarterly return outlining the hours worked and wages paid to employees covered by the scheme. If all employers in the sector are registered with the authority, this allows them to keep track of work done by employees regardless of who they are working for over that time.
- The payments to employees under all three of these schemes are funded by the governments through an employer ‘levy’ system. When submitting the quarterly return, employers are required to pay a levy, calculated as a percentage of the wages detailed in the return. This levy helps fund the scheme without requiring any particular employer to be the one to ultimately pay the employee’s long service leave.
When will employees become eligible for long service leave?
In the case of Queensland and the ACT, employees become eligible for portable long service leave even where they would not yet be eligible for traditional long service leave.
- In the ACT, workers are entitled to portable long service leave after five years’ recorded service in the industry; traditional long service leave for one employer only becomes available at seven years.
- In Queensland, employees are able to access portable long service leave after seven years of recorded service in the industry; working employees are only eligible for traditional long service leave after 10 years with one employer.
In NSW, employees who are still working are only able to access traditional long service leave after 10 years’ service with one employer. Given the trend outlined above, there is reasonable speculation that the upcoming portable long service leave in NSW might also provide an entitlement earlier than 10 years.
How can we prepare?
Given the recent media focus on long service leave (Woolworths facing criminal charges for payroll failure), similar scrutiny will be placed on employers when this scheme is rolled out.
Critically, the quarterly return reports for employees’ wages pose a risk to employers in the disability support industry that haven’t been keeping compliant records, let alone the cost of the levy. The same remains to be seen for the rest of the country as pressure increases on state and territory governments to introduce similar schemes.
To ensure your employee records are ready for portable long service leave reporting, reach out to the consultants at HR Assured here.
Anthony El Salim is a Workplace Relations Consultant at HR Assured. He assists clients with a range of employment relations and compliance matters via the 24/7 Telephone Advisory Service.