Major Changes in the New Victoria Long Service Leave Legislation

26 Nov 2018

The Victorian Long Service Leave Act 2018 came into effect on Thursday 1 November 2018. If you have employees working in the state of Victoria, you must ensure you are compliant with the new legislation.

To help you with the transition, we have listed the most significant changes to the state of Victoria’s long service leave (LSL) entitlements below. For information on the full changes, you can download the new legislation here.

Right to Take LSL at 7 years

Employees can now take their accrued LSL after 7 years of continuous service. This is a significant change, as previously, employees must have sustained 10 years of continuous service to take their LSL.

Furthermore, once an employee reaches 7 years of continuous service, they are automatically entitled thereafter to the LSL entitlements they accrue.

LSL to Accrue During Parental Leave

From 1 November, all paid parental leave and up to 52 weeks of unpaid parental leave is considered continuous service. LSL does accrue during these periods of parental leave.

Additionally, for casual and seasonal employees, up to 104 weeks of paid and/or unpaid leave is considered part of their continuous service.

Relaxed Minimum Leave Period

There are no longer any restrictions on the number of periods an employee can take as part of their LSL. Employees are limited, however, to taking their leave for a period of no less than one day at a time.

Calculating the Rate of Pay for LSL

LSL is generally paid out at an employee’s ordinary weekly rate of pay.

If an employee does not have a fixed ordinary weekly rate of pay or if their normal weekly hours of work have changed in the 12 months prior to taking LSL, the greater of the following is to be used to calculate the employee’s LSL hours;

  • Weekly hours of work in the last 12 months;
  • Weekly hours of work in the last 5 years; or
  • Weekly hours of work for the whole period of continuous employment.

Implementing These Changes

If your company has employees covered by the new LSL legislation, there are actions to take to ensure compliance.

An important first step is implementing the regulatory changes in your payroll system to ensure you are correctly accruing LSL entitlements for your employees. Other actions you may need to take include; reviewing and updating your LSL policies and communicating the changes to your employees affected by the updated legislation.

This article is prepared by Definitiv. Contact Definitiv on 1300 125 307 for more information.

Contact BoardRoom for more information:

Tom Bloomfield

General Manager, Growth & Partnerships
+61 2 9290 9617