The law says you deserve a break!
The Long Service Leave Act 2018 will become law on 1 November 2018.
The 2018 Act doesn’t change the accrual rate for Long Service Leave in Victoria, but it does make significant changes to Long Service
Leave. Employees and employers should be on top of the new laws, and how it will change their policies and workflow (and holiday plans)!
Key changes coming in the 2018 Act:
- Employees are allowed to take LSL after 7 years’ continuous employment instead of 10 years.
- Employees are allowed to take LSL one day at a time. Under the 1992 LSL Act, employees are only allowed to take LSL in longer blocks. This may be a welcome flexibility for employers.
- Up to 52 weeks of unpaid parental leave is included when calculating an employee’s continuous employment, and unpaid parental leave in excess of 52 weeks does not break continuity of employment (not so under the 1992 LSL Act).
- If an employee is re-employed within 12 weeks of termination due to dismissal or resignation, expiry of a specified term contract or completion of their apprenticeship, their employment is taken to be continuous (under the 1992 LSL Act, this only applies if the employee is dismissed).
- If an employee’s ordinary hours of employment fluctuate in the 2 years before they take LSL the hours they will be paid their LSL upon is the greater of the average hours they have worked over the past 12 months, the past 5 years or over the entire period of their employment with the employer.
- Penalties for a body corporate for failure to pay LSL are increased from a maximum of 20 penalty units ($3171.40) under the 1992 LSL Act to 60 penalty units ($9514.20) under the 2018 Act. Criminal rather than civil penalties will now apply for taking adverse action against an employee because s/he is entitled to LSL and for failing to disclose that an employment agreement would modify or remove an employee’s LSL entitlements. Authorised officers will have new powers to compel the production of documents from employers (but they will still not have right of entry powers).
- Payments in lieu of LSL are to be permitted in Victoria if provisioned to occur in accordance with an enterprise agreement or other relevant fair work instrument. 2
Employers need to be on the ball about these changes!
- Now is the time to review and update any relevant policies and procedures (including payroll systems) to ensure LSL entitlements will be correctly calculated and administered once the new law takes effect.
- Remember that if LSL entitlements are not paid correctly on cessation of employment, employers are liable for penalties and interest until the payment is rectified.
- Keep copies of all records that may be relevant to an employee’s entitlement to LSL to ensure that entitlements are correctly calculated and you can defend any claims as necessary.
- If purchasing a business, ensure you take LSL accruals into account when negotiating a purchase price and obtain appropriate warranties and indemnities from the vendor.
There are more changes taking place - make sure you're familiar with all of them! You can read the full Long Service Leave Act here. If you're unsure of these changes, talk to your HR representative! And if you're taking a holiday under the new Act - happy travels!