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Portable long service leave scheme to go ahead

Submitted on Wednesday, 12th September 2018

On 5 September 2018 the Victorian Parliament passed the Long Service Benefits Portability Act 2018.

This legislation, which will commence on 1 July 2019, will establish a scheme to provide portability of long service leave benefits for workers in the contract cleaning, security and community services sectors.

This will enable eligible workers to accumulate paid long service leave entitlements for long service within a sector, irrespective of how many employers they have worked for.

It will be funded by levy payments made by employers that are pooled into a central fund that pays long service entitlements to workers. The levy is expected to be around 1.7 per cent of gross wages (and will be capped at a maximum of 3 per cent).

The Victorian Chamber has consistently opposed a new portable long service leave scheme on the basis that it will increase the cost of labour without delivering any corresponding increase in productivity. It will result in additional indirect administration costs and red tape for employers. These additional costs will discourage employment.

In terms of employer obligations, the legislation:

  • establishes an authority to oversee the scheme
  • requires employers in the relevant industries to register their businesses and employees, including casual and contract workers
  • requires employers to provide a quarterly return to the authority detailing the names, total pay and number of days worked by eligible workers during the quarter
  • details record keeping requirements
  • sets out penalties for non-compliance.

The scheme will add to similar schemes in place in other states. All states have portable long service leave schemes for the construction sector. In addition, NSW has a portable scheme for cleaning. Queensland has a portable scheme for cleaning. The ACT has a portable scheme for community services, cleaning and security.

The Victorian Government is currently developing an information and communications campaign to inform employers and employees of their rights and obligations under the scheme and further information will be made available ahead of the scheme’s commencement.

If you have further enquiries about the scheme or any concerns about how it might affect your business, please email Hugh Horsfall from the Policy and Advocacy Team or call (03) 8662 5106.

 

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