Portable long service leave allows workers to accrue leave entitlements even when they change employers within the same industry. Unlike traditional extended service leave, this scheme ensures workers retain their benefits across multiple employers. It applies to industries with high workforce mobility, including building and construction, community services, and cleaning and security.
Employers must register workers, pay a levy, and report contributions to remain compliant. Failure to meet these obligations can lead to penalties and back payments. Understanding how the scheme works helps businesses manage costs, avoid risks, and ensure workers receive entitlements.
This guide explains how the scheme operates, which industries it covers, and what employers must do to comply.
A quick guide to portable long-service leave
Portable long-service leave allows workers to accrue long-service leave entitlements while moving between employers in the same industry. Employers must register workers and pay a levy to fund these entitlements, ensuring workers receive their benefits when eligible. The scheme applies to high-mobility sectors, including building and construction, community services, and cleaning and security. To remain compliant, employers must keep accurate records and submit regular reports to the scheme’s authority. This system protects worker entitlements while simplifying leave management for businesses.
Understanding portable long-service leave and how it works
Workers earn portable long-service leave entitlements based on working in a covered industry rather than with a single employer. As long as they remain in the same industry, their leave continues to accrue, even if they change jobs.
Employers are responsible for registering workers, paying a levy, and reporting service details to the scheme’s authority. These contributions ensure workers can claim their entitlements once they meet the required service period.
This system benefits high-mobility industries, where workers frequently change employers, ensuring they retain access to extended service leave without starting over each time they move jobs.
How workers accumulate entitlements
Workers accrue long service leave entitlements based on their time in a covered industry. Their leave balance continues to grow even if they change jobs, as long as they remain in the same industry.
- Workers must be employed in a sector covered by the portable long-service leave scheme.
- Employers register workers with the scheme and pay a levy on their behalf.
- Workers can claim their entitlements after reaching the required years of service.
Industries covered by the scheme
Several industries in Australia offer portable long-service leave, including:
- Building and construction: covers workers in residential, commercial, and infrastructure projects
- Community services: includes aged care, childcare, and disability support workers
- Cleaning and security: covers workers in commercial, industrial, and government contracts
Comparison: traditional vs. portable long-service leave
| Feature | Traditional long-service leave | Portable long service leave |
|---|---|---|
| Employer-based | Yes | No |
| Industry-based | No | Yes |
| Accumulates across employers | No | Yes |
| Eligibility criteria | continuous service with one employer | continuous service in the industry |
| Applies to multiple industries | No | Yes |
This system allows eligible workers to accrue long service leave entitlements even if they work on different projects. It simplifies record-keeping and ensures workers get the benefits they earn.
How long service leave entitlements are calculated
Workers in a portable long-service leave scheme accrue entitlements based on their total years of service in a covered industry. Unlike traditional systems, their entitlements move with them, even if they change employers. This ensures workers can take extended service leave even if they have worked for multiple businesses.
How entitlements accrue under a portable system
Workers earn long service leave entitlements based on their time in the industry rather than with a single employer. The standard accrual rate varies by industry and state, but most workers earn leave after seven years of continuous service.
Key factors that affect accrual include:
- The worker’s total service time in the industry
- The industry’s specific entitlement rules
- The levy rate paid by the employer
Employers report worker hours to the scheme authority, which tracks their entitlements. Workers can claim leave once they meet the minimum service requirement.
Example calculation of long service leave accrual
A worker in Victoria's building and construction industry earns extended service leave after seven years of service. The standard entitlement is 13 weeks of leave for every 10 years worked.
If a worker completes seven years of service, their entitlement is:
(13 weeks ÷ 10 years) × 7 years = 9.1 weeks of leave
If workers change employers but stay in the industry, their entitlements continue to accrue.
Understanding the levy and its impact on businesses
Employers in industries covered by the portable long-service leave scheme must pay a levy to fund worker entitlements. This levy ensures workers can claim long service leave even if they change employers. The levy is calculated as a percentage of a worker’s wages and varies by industry and state.
How levy rates are determined
Levy rates depend on industry requirements and government regulations. Each state sets its rates based on factors such as:
- Industry turnover and worker mobility
- Expected long service leave claims
- Financial sustainability of the scheme
Example of levy calculation
If an employer in the community services sector pays a worker $80,000 per year and the levy rate is 1.65%, the annual levy contribution is:
$80,000 × 1.65% = $1,320 per year
If the worker leaves and joins another registered employer in the same industry, their entitlements continue to accrue. The new employer takes over levy payments.
Financial planning tips for businesses
To manage levy contributions effectively, businesses should:
- Include levy costs in financial forecasts and budgeting
- Track and report worker wages accurately to avoid underpayment penalties
- Review levy rate changes and adjust payroll systems accordingly
- Seek advice from industry bodies or financial experts if unsure about compliance
Employers who fail to pay the levy may face penalties. Staying informed and proactive helps businesses manage costs while ensuring workers receive their entitlements.
Employee rights and how to access portable long-service leave
Workers covered by a portable long-service leave scheme can accrue leave entitlements even if they change employers within the same industry. This ensures they can access their long service leave entitlements when they meet the eligibility criteria.
How to check accrued leave balance
Workers can check their accrued long service leave entitlements by contacting the scheme’s authority in their state or industry. Most authorities offer online portals where employees can:
- Log in and view their leave balance
- Check employer contributions
- Update personal details
If workers notice missing contributions, they should contact their employer or the scheme’s authority for assistance.
How to submit a claim
Workers must meet the minimum years of service before applying for leave. The process generally includes:
- Confirming eligibility with the scheme’s authority
- Completing a leave claim form
- Providing proof of employment history in the industry
- Applying to the scheme administrator
Workers should apply well to ensure their leave is approved on time.
What happens if a worker leaves the industry or moves interstate
If workers leave the industry before reaching the required years of service, they may lose their accrued leave. Some schemes allow a pro-rata payout if the worker meets certain conditions.
If workers move interstate but remain in the same industry, they should check if their entitlements transfer. Some states recognise service in other regions, but not all schemes are linked.
Step-by-step guide for accessing entitlements
- Check the accrued leave balance through the scheme’s website or contact the authority.
- Confirm eligibility and ensure you have completed the required years of service.
- Gather supporting documents, including proof of industry employment.
- Submit the claim form to the scheme’s authority.
- Wait for approval and receive payment or leave approval.
Workers should stay informed about their rights to ensure they receive the benefits they have earned.
How does portable long service leave apply to different employment types?
Portable long-service leave entitlements apply to workers across different employment types, including full-time, part-time and casual employees. The scheme ensures that all eligible workers can accrue leave entitlements, even if they move between employers in the same industry. However, how entitlements are calculated may vary based on work hours and employment status.
Full-time employees
Full-time workers accrue extended service leave based on their total years of service in the industry. Their entitlements grow consistently as they work regular hours and receive continuous employer contributions to the scheme.
- Accrue leave at the full rate based on industry standards
- Must meet the required years of service to access leave
- Leave balances remain even if they change employers within the industry
Part-time workers
Part-time workers also accrue portable long service leave but at a reduced rate based on their hours worked. The scheme tracks their entitlements proportionally to ensure fairness.
- Leave accrual is based on actual hours worked rather than full-time rates
- Must still meet the required years of service to access leave
- Entitlements remain even if they switch employers in the industry
Casual employees
Casual workers benefit the most from portable long-service leave as they often move between employers. Without the scheme, many casuals would never reach the required service period with a single employer.
- Accrue leave based on the hours they work across different employers
- Must be employed in a covered industry for the required years of service
- Can claim leave even if they work irregular shifts or with multiple employers
Examples of entitlement differences
| Employment Type | Accrual Method | Eligibility Requirement |
|---|---|---|
| Full-time | Based on the full industry rate | Required years of service |
| Part-time | Proportional to hours worked | Required years of service |
| Casual | Based on total hours worked across employers | Required years of service |
The scheme ensures that all workers can accrue and access long service leave entitlements regardless of employment type. Workers should check their scheme’s rules to understand their specific entitlements.
Compliance challenges and best practices for businesses
Employers must comply with the portable long service leave scheme to ensure workers receive entitlements. However, many companies face challenges in meeting their obligations. Understanding these challenges and applying best practices can help enterprises to avoid penalties and streamline their processes.
Common compliance challenges
Many businesses struggle with compliance due to:
- Failing to register eligible workers with the scheme
- Inaccurate levy calculations leading to underpayments or overpayments
- Missing deadlines for levy payments and reporting
- Poor record-keeping, making it hard to track entitlements
- Workforce turnover, making it difficult to maintain correct employee records
Failure to meet compliance requirements can result in fines, legal action and reputational damage.
Best practices for ensuring compliance
Employers can stay compliant by:
- Registering workers on time: Ensure all eligible workers are added to the scheme when they start employment
- Calculating levies correctly: Use the correct industry rate and ensure accurate payroll calculations
- Submitting reports on time: Meet quarterly or annual reporting deadlines set by the scheme authority
- Keeping accurate records: Maintain detailed records of employment, hours worked and levy payments
Regular audits and internal checks can help identify compliance gaps before they become serious issues.
Record-keeping, reporting and levy payments
Good record-keeping ensures compliance and simplifies reporting. Employers should:
- Keep payroll records showing wages, hours worked and levy contributions
- Retain proof of levy payments to avoid disputes
- Update records when employees leave or change roles
Most schemes require employers to submit reports quarterly. These reports should include updated worker details and levy payments. Missing deadlines can result in fines, so businesses should set reminders or automate reporting where possible.
Managing workforce turnover and leave entitlements
High staff turnover makes compliance harder, especially in industries with short-term contracts. Businesses can manage this by:
- Ensuring new hires are registered with the scheme immediately
- Maintaining an updated database of past and current employees
- Training payroll staff to handle portable long service leave obligations correctly
Employers who follow these best practices can reduce risks and ensure their workers receive their entitlements.
Legal and financial implications for businesses
Businesses covered by the portable long-service leave scheme must meet legal and financial obligations. Employers must register workers, pay levies on time and keep accurate records. Failing to comply can lead to penalties, back payments and reputational damage.
Financial and legal obligations
Employers must:
- Register all eligible workers with the scheme
- Calculate and pay levies based on wages
- Submit reports and payments by the required deadlines
- Keep payroll records to track employee entitlements
These obligations apply regardless of whether a worker stays with the employer or moves to another business within the same industry.
Penalties for non-compliance
Businesses that do not comply with the scheme may face:
- financial penalties: fines for late or missing levy payments
- back payments: paying overdue levies, sometimes with interest
- legal action: prosecution for repeated non-compliance
- reputational damage: loss of trust from employees and industry bodies
To avoid penalties, businesses should review their compliance regularly and ensure accurate reporting.
Best practices for financial planning and risk mitigation
Employers can manage financial risks by:
- Including levy payments in their budget forecasts
- Using automated payroll systems to track entitlements and contributions
- Scheduling internal audits to check compliance before deadlines
- Training payroll staff on legal and financial obligations
Compliance checklist for employers
✅ Register all eligible workers with the scheme
✅ Calculate levy contributions correctly based on wages
✅ Submit reports and payments on time
✅ Keep accurate payroll and leave records
✅ Review compliance regularly to avoid legal risks
Meeting these obligations ensures businesses remain compliant while helping workers receive their entitlements.
Best practices for implementing portable long service leave in business operations
Businesses must follow best practices to meet portable long-service leave scheme requirements. Proper implementation helps businesses avoid penalties, manage costs and support workers in receiving their entitlements.
Step-by-step guide for businesses new to the scheme
- Confirm eligibility: Check if your business operates in a covered industry.
- Register with the scheme: Sign up with the relevant state or industry authority.
- Register employees: Add all eligible workers, including full-time, part-time and casual staff.
- Calculate levy contributions: Determine the correct rate based on employee wages.
- Submit payments and reports: Pay the required levy and report worker details as required.
- Maintain records: Keep detailed records of employment, hours worked and levy payments.
- Monitor compliance: Conduct regular reviews to ensure accuracy and avoid underpayments.
Record-keeping requirements for audits and compliance checks
Accurate records help businesses prove compliance during audits. Employers must store:
- Worker start and end dates
- Total hours worked and wages paid
- Levy payments and reporting history
- Copies of registration documents
Authorities may request these records during audits. Keeping them organised reduces the risk of penalties.
Digital solutions for tracking leave accrual and contributions
Businesses can streamline compliance using payroll and HR software. These systems:
- Calculate levy contributions automatically
- Generate compliance reports for audits
- Track employee leave accrual in real-time
- Send reminders for payment deadlines
Integrating portable long-service leave into HR and payroll systems
HR and payroll teams should align portable long-service leave compliance with existing processes. Businesses should:
- Train HR staff to manage leave entitlements and registrations
- Integrate payroll systems to calculate and process levy payments
- Automate reporting to meet scheme deadlines
Following these best practices ensures businesses stay compliant while reducing administrative workload.
Frequently asked questions
How does portable long service leave apply to the community services sector?
Community service sector workers move between organisations, making qualifying for traditional extended service leave hard. The scheme ensures these workers accrue long service entitlements across different employers for which they have worked. Eligible employees include those in aged care, disability support and social work. Non-profit organisations and government agencies are included in the scheme.
How does portable long service leave work across Australia?
Each state and territory manages its own portable long service leave scheme. The NSW government and other Australian states and territories have different entitlements, levies and claims rules. Employers should check their state and territory requirements to ensure compliance.
How does the implementation of the scheme affect employers?
Employers must register with the portable long service leave authority in their state. They must report employee details and pay levies and keep records. Failure to comply can lead to fines. Employers should also ensure clarity in payroll processes to calculate entitlements correctly.
When should workers commence accruing portable long service leave?
Workers start accruing entitlements from their commencement date in a covered industry. The accrual period varies depending on the state and territory. In some cases, workers may need to wait until 1 January of the following year to begin their accrual period.
How can employers and workers get more clarity on their entitlements?
For clarity on entitlements, eligibility and levy rates, employers and workers should check with their state’s authority. If they need further guidance, please contact the relevant governing entity for up-to-date rules and compliance details.
Next steps for businesses
Portable extended service leave ensures workers receive their entitlements even if they change employers within the same industry. Employers must register workers, pay the required levy and maintain accurate records to stay compliant. Failing to meet these obligations can lead to penalties and back payments.
Businesses should take a proactive approach to managing portable long-service leave. Using payroll systems, automating levy calculations and conducting regular compliance checks can help reduce risks. Proper record-keeping makes audits more manageable and ensures workers receive their entitlements without delays.
Staying informed about industry regulations is key. Employers should review updates from the relevant scheme authority and seek expert advice when needed. Training HR and payroll teams on compliance requirements can prevent costly errors.
Business Kitz provides document management solutions to help businesses meet their compliance obligations. Our platform simplifies record-keeping, payroll integration and reporting. Explore our solutions today to streamline your business operations and stay compliant.
