Eligibility criteria for long service leave vary depending on the jurisdiction and the specific employment regulations in place. However, in general, employees become eligible for long service leave after completing a specified period of continuous service with an employer, typically ranging from 7 to 10 years.

Employees typically have the right to request long service leave once they become eligible. The process for requesting and taking long service leave may vary depending on the employer's policies and any relevant industrial agreements or awards.

In Victoria long service leave is a requirement under the LSL Act 2018, this act applies to most employees (excluding employees under some Commonwealth enterprise agreements and pre-reform awards, and other Victorian laws). Categories/types of employment generally include: full time, part time, casual, seasonal and fixed term and employees under certain labour hire arrangements.

Here is a list of the Act’s covering long service leave in other states:

• ACT – LSL Act 1976
• NSW – LSL Act 1955
• NT – LSL Act 1981
• QLD – Industrial Relations Act 2016
• SA – LSL Act 1987
• TAS – LSL Act 1976
• WA – LSL Act 1958

It's essential for both employers and employees to familiarise themselves with the applicable laws and seek advice if necessary.

The rate at which long service leave accrues also varies by jurisdiction and employment agreement. In some cases, it accrues at a fixed rate per year of service, while in others, it may accrue gradually over time. In Victoria, as an example, long service leave accrues at a rate of one week for every 60 weeks of continuous service – that's about 0.866 of a week each year.

Long service leave is then usually paid at the employee's ordinary pay rate at the time the leave is taken. This may include base salary, regular allowances, and any other entitlements that the employee would normally receive during periods of work.

In most circumstances, it is an offence to give or receive payment for long service leave instead of the employee taking the break from work.

Both an employee and an employer can be liable for this offence and, if found guilty, a criminal conviction may be recorded.

An employee can only receive payment in respect of any unused long service leave if their employment ends before the leave is taken. In this scenario on the day that employment ends, an employee with at least 7 years’ continuous employment with 1 employer is deemed to have started to take long service leave on that day, and is entitled to receive payment for the full amount of their accrued but untaken long service leave entitlement.

This will apply whether the employee has resigned, has had their employment terminated by the employer, has been made redundant or has died (in the event of death, payment must be made to the employee’s personal representative.)

Whilst, as a business, you aren’t liable for long service leave until an employee reaches the 7 year eligibility service period, it is recommended that the potential liability begin to be accrued in the couple years lead up to that date. This is because the value of long service leave is usually of material value, and it is a good idea to begin planning for it well in advance. Refer to our video on how to record long service leave in Xero.

Generally long service leave is recognition of continued service to one employer, however there are some exceptions:

• Business sales or transfers
• Industries whose nature means that workers do not usually work for a single employer for long periods of time but who may be employed over many years on a project basis, or in some other way routine to that industry.

In the event of business sale or transfers, where employment of the employee is continued, the employee is taken to have the same start date as their original start date in the business. In other words the entering business owner takes over the long service leave liability of the employees in that business.

Refer to our specific section on portable long service leave within industry.

LeavePlus offers portable long service leave to workers in the construction sector in Victoria. This feature addresses the inherent challenges faced by workers who frequently change employers or projects within the industry. Without this provision, individuals would typically need to remain with the same employer for at least seven years to qualify for long service leave.

LeavePlus maintains a centralised record of eligible service days accrued by workers in Victoria. This record allows us to track accumulated service across multiple employers. Once a worker has amassed seven or more years of eligible service, they become eligible to claim long service leave from LeavePlus at any time.

LeavePlus operates on a contribution model, with employers required to contribute a designated percentage of their total gross wages to the Long Service Leave Fund every three months. These contributions ensure the sustainability of the program and enable us to fulfill long service leave claims when workers apply for them.

LeavePlus ensures that workers can accumulate service credits regardless of how frequently they change employers, as long as they remain within the construction industry performing covered work. Workers can also take breaks of up to four years without losing their accrued service credits.

Once a worker has accumulated seven years of eligible service, they are entitled to claim long service leave at any time. Additionally, LeavePlus provides a death benefit to the estate of registered workers who have accrued at least 55 days of recognised service within four years of passing away.

Workers in contract cleaning, security, community services, NDIS service providers and Early Childhood services are covered by this provision. Under the provision business employing workers in these industries must register as an Employer with the Portable Long Service Authority.

Employers are then required to submit Quarterly Returns to the Authority in October, January, April, and July each year. These returns include information about all workers employed during the quarter, their working days, and corresponding pay.

The Governing Board of the Portable Long Service Benefits Authority has set the Employer Levy at:

• 1.65% for community services
• 1.80% for contract cleaning
• 1.80% for security.

Employer contributions are invested by the Authority and utilised to fulfill workers' long service claims.