Tuesday, 16 July 2019

New Portable Long Service Leave Scheme Has Commenced In Victoria

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

What are the new laws?

The Act implements a Portable Long Service Benefits Scheme (the Scheme) that enables workers to accrue long service leave based on their length of service to their industry, irrespective of their length of service to one employer. This means that eligible workers can retain their entitlements to long service leave when they change employers but remain in the same industry.

The Scheme does not replace other existing Long Service leave schemes or laws, but sits alongside them.

What action must businesses in a covered industry take?

From 1 July 2019, businesses employing workers in community services, contract cleaning and security and businesses employing workers who perform work covered by the Scheme must register with the Portable Long Service Authority (Authority).

This registration must be completed by 30 September 2019 for established businesses. New businesses must register within three months of establishment.

Employers must also provide reports each quarter to the Authority on their employees’ hours of work, pay and leave entitlements. The first quarterly report must be submitted in October 2019.

There is no cost to register with the Authority, however businesses may be required to pay a levy as part of their quarterly return every three months.

The Authority will then determine the long service leave contributions to be made by the employer, which is based on an employee’s ordinary pay multiplied by the applicable industry levy.

Employers also have additional record keeping requirements for portable long service leave. The failure to comply with record keeping requirements will constitute an offence and may attract penalties.

What are the implications for employees?

After 7 years’ service, eligible workers will be able to apply to the Authority for a cash payment equal to 1/60th of their total period of service, less any long service benefit paid for that period. This will be paid as a lump sum payment.

Full time, part time, casual and, in the contract cleaning and security industries, seasonal employees will be eligible for portable long service leave under the Scheme.

If employees are eligible for portable long service benefits under the Scheme as well as other long service benefits under a different law (such as the Long Service Leave Act 2018) or industrial instrument, they must elect the law under which long service benefits are to be taken and notify the Authority in writing as double dipping is not permitted under the Scheme.

What about service prior to 1 July 2019?

For workers in the contract cleaning and security industry, time worked between 1 July 2018 and 30 June 2019 may be added to their service history on application to the Authority by the worker.

If the Authority is satisfied that the worker was employed or engaged in the industry at the time, it will credit the worker with one day of service for each day or part day of service in the industry, without the employer having to make any additional payment.

What do you need to do?

Employers employing workers in a covered industry should seek advice as to whether their business is covered by the Scheme and if so, take steps to understand their obligations under the new Scheme.

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This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.

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