Introduction of Portable Long Service Leave in Victoria – is your business impacted?

By Bethany Silverman

In September 2018, the Long Service Benefits Portability Act 2018 (the Act) was passed in Victoria which introduces ‘portable long service leave’ in the community services, contract cleaning and securities industries as of 1 July 2019.

What does this mean?

The Act establishes the Portable Long Service Benefits Authority (Authority) (which will operate similar to CoINVEST in the construction industry) and will administer and make payments under a portable long service benefits scheme in covered industries.

Workers will be able to accrue long service leave based on their length of service to their industry, regardless of their length of service to the one employer. Essentially, long service leave entitlements will be retained even when an employee changes employer, provided that they remain in the same industry.

What do businesses need to do?

Employers in the community services, contract cleaning and security industries, or any other industry covered by the Scheme are required to register the business with the Portable Long Service Authority (Authority) by 30 September 2019.

Once registered, employers must provide quarterly reports to the Authority on employees’ hours of work, pay and entitlements. The first quarterly report is due in October 2019. Registration is free; however, businesses may have to pay a levy as part of their quarterly return every three months.

Any long service leave contributions that an employer is required to make will be determined by the Authority. The contribution is based on the employee’s ordinary pay multiplied by the applicable industry levy.

The Scheme also imposes additional record keeping requirements on businesses for the purposes of Portable Long Service Leave. Failure to comply with these requirements is an offence and may attract penalties.

What does this mean for employees?

If a worker is eligible under the Scheme, they can apply to the Authority for a lump sum cash payment equal to 1/60^th of their total period of service (less any long service benefit paid for in that period).

In the event that an employee is eligible for portable long service benefits under the Scheme, and also long service leave under a different law (e.g. Long Service Leave Act 2018) or an industrial instrument, the employee must notify the Authority in writing as to which law they wish to take their long service benefits under. This is to prevent ‘double dipping’ of benefits, which is not permitted under the scheme.

Is service prior to 1 July 2019 recognised?

Service between 1 July 2018 and 30 June 2019 for workers in the contract cleaning and security industry may be added to the worker’s service upon Application to the Authority by the worker.

Where the Authority is satisfied that the workers was employed in, or engaged in the industry at the time, it will credit the workers with one day of service for each day or part day of service in the industry. This is done without the employer being required to make additional payments.

Next steps

Businesses that employer workers in the covered industries are advised to seek information as to whether their business is covered under the Scheme, and if so, should take steps to understand their obligations under the Scheme.

For more information on portable long service leave in Victoria, clients should contact the HR Assured team. If you would like more information about the benefits of becoming a HR Assured client, get in touch with us today for an informal chat. We have over 25 years’ of experience providing expert advice on workplace relations and employment law.

Bethany Silverman is a qualified Workplace Relations Consultant at HR Assured. She regularly engages businesses in matters of compliance and best practice. She has a particular interest in the performance management process.