You know that great feeling of well-deserved rest after closing an important deal or completing a major business process? Your employees love it, too.

In fact, after being with your company for a long time, they are entitled to such rest. This is known as long service leave.

But, although rewarding, it can pose some challenges for both employers and employees.

When can employees request it? How long does it last? Can you offer a payout instead?

This guide reviews everything you need to know about long service leave, ensuring you stay compliant and fair employer.

What is Long Service Leave?

Long service leave, also known as LSL, is paid leave granted to employees after they have worked for the same employer for an extended period. Employees have the right to LSL at regular intervals for as long as they remain with the same employer.

Note: Long service leave is an entitlement in addition to annual leave. This means that employees can use both their annual leave and long service leave.

Who is Eligible for Long Service Leave, and For How Long?

Your full-time, part-time and casual employees are all eligible for long service leave. Freelancers and contractors are generally not entitled to long service leave.*

The length of leave depends on the specific territory in Australia where the employee works.

 

Territory

Minimum years of service

Weeks of LSL

Australian Capital Territory

7

6.0667

New South Wales

10

8.6667

Northern Territory

10

13

Queensland

10

8.6667

South Australia

10

13

Tasmania

10

8.6667

Victoria

7

8.6667

Western Australia

10

8.6667

*Exceptions exist for freelancers and contractors in certain industries involving multiple employers and projects (e.g. construction, mining, and cleaning).

Can I Refuse a Long Service Leave Request From an Employee?

Employers may refuse long service leave requests when:

  • Granting leave at a particular time would significantly disrupt business operations if the workload is exceptionally high.
  • The employee fails to provide adequate notice before the intended leave period.

Regardless of the specific reason, you must ensure compliance as an employer. It’s advisable to consult with your employees to mutually determine suitable dates for long service leave or address any potential issues. LSL is a legal entitlement, and it’s generally beneficial for you as an employer to treat your employees well and reward them for their loyalty and efforts.

Can I Pay Out LSL?

Usually, long service leave isn’t paid out while employment is ongoing. Instead, it’s typically settled upon the termination of employment. At that point, the payout is based on the employee’s standard pay rate, excluding additional allowances or penalties.

Pro-Rata Long Service Leave Payments

Pro-rata long service leave payment may be applicable when an employee leaves the company before completing the necessary years for full entitlement.

But, this eligibility varies depending on the territory of employment.

For detailed information on long service leave entitlements in the territory in which your business operates, refer to the respective government resources:

Ensure Long Service Leave Compliance

Long service leave isn’t just a legal obligation—it’s also a prime opportunity to show appreciation for your employees’ dedication. And while granting this benefit can be challenging at times, it’s essential to approach each decision thoughtfully and in compliance with the relevant regulations.

If you have any concerns or questions about long service leave, contact Fresh HR Insights for professional advice tailored to your specific business and applicable entitlements.

 

Sources:

https://www.fairwork.gov.au/leave/long-service-leave

https://www.fairwork.gov.au/leave/long-service-leave/payment-of-long-service-leave

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