Established in 2019, the scheme allows an employee in the security, contract cleaning and community services industries to retain their LSL entitlements if they move between employers in the same industry.

The scheme is designed to provide access to LSL for employees working in industries that have high rates of staff turnover and would typically not have been able to access such entitlements due to work patterns in their industry.

It requires businesses in a covered industry to register with the Portable Long Service Leave Authority (PLSLA), submit quarterly returns to the authority, and pay an employer levy to fund the scheme.

If an employee that you have recently hired reaches seven years of service in the industry, they will be eligible for LSL as if they had been working for you for the whole seven-year (or greater) period. You can then recoup the costs of the LSL that you pay to your employee from the PLSLA.

The Portable LSL Scheme does not apply to employers outside of the security, contract cleaning and community services industries. It does not replace standard LSL entitlements under the Long Service Leave Act 2018 (Vic) and does not cover construction workers who accrue portable LSL through a separate arrangement known as CoINVEST.

Employer obligations

If you employ workers in the security, contract cleaning or community services industries, you are likely to be covered by the scheme.

1. You have an obligation to register for the scheme through the PLSLA if you have not already done so. If you are covered by the scheme and have not registered, you may have to backpay your contributions to the PLSLA.
2. You must submit quarterly returns to the PLSLA detailing the time worked and ordinary hours wages for each eligible employee during the quarter, any LSL taken by employees during that period and details of any eligible employees who have had their employment terminated during that period.
3. You must register any eligible employees as they start employment with you via your quarterly return.
4. Businesses in affected industries must pay a quarterly levy that is calculated according to the time worked by your workforce and by ordinary wages paid to your employees. The levy rate is 1.80 per cent of employees’ ordinary wages for the contract cleaning and security industries, and 1.65 per cent of eligible employees’ ordinary wages for the community services industry.
5. You must keep proper records of your employees’ hours, ordinary pay, start/termination dates and any LSL taken by your employees.
6. You need to ensure you update your contact details with the PLSLA if your contact details change.

Penalties may apply for failures to register for the scheme, pay contributions or keep records of your employees’ working hours.

LSL accrued before 1 July 2019

Any LSL entitlement accrued by eligible employees before the commencement of the Portable LSL Scheme is not affected by the commencement of the scheme and still rests with the employer.

Any further accrual from 1 July 2019 is credited with the PLSLA and paid for by the employer via the portable LSL levy.

If an employee reaches seven years’ employment with an employer and they were employed prior to 1 July 2019, the portion of the LSL accrued by the employee prior to 1 July 2019 is to be paid by the employer alone, and the portion of the LSL accrued from 1 July 2019 is to be paid by the employer, and then reimbursed by the PLSLA.

Practical tips for employers

• Know your obligations: If you are an employer in the security, contract cleaning or community services industry, you are likely to have employees covered by the Portable LSL Scheme. Make sure you take proactive steps to understand whether you are required to register.
• Keep reliable records: Good recordkeeping is vital to ensure a business complies with its LSL obligations, whether portable or traditional. If you do not have reliable records, you will have difficulty complying with your quarterly reporting obligations to the PLSLA and understanding your employees’ entitlements.
• Make sure you are submitting your quarterly return to the PLSLA: The legislative regime that has expanded portable LSL outside of the construction industry has substantial enforcement mechanisms. Don’t fall foul of the law and make sure your compliance is up to date!

How the Victorian Chamber can help

The Victorian Chamber has a team of Workplace Relations and Health, Safety and Wellbeing Advisors and Consultants. The team has an impressive background and a wealth of experience putting them in the best position to support your business. For more information on how the Victorian Chamber can support your business or to access our consulting services call us today on (03) 8662 5222.