November 5, 2018   |   Compliance

What you need to know about the new Victoria LSL legislation

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, then you need to make sure 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 seven years

Employees can now take their accrued LSL after only seven years of continuous service. This is a massive change, as previously, employees had to wait until they had reached ten years of continuous service to take their LSL.

Furthermore, once an employee reaches seven years of continuous service, they are automatically entitled after that 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.

Furthermore, 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 usually 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 before 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 five years; or
  • Weekly hours of work for the whole period of continuous employment.

Implementing these changes

If your company has employees covered by Victoria’s new LSL legislation, there are actions you need to take to make sure you are compliant.

So what do you need to do? An essential first step is implementing the regulatory changes in your payroll system to make sure you are correctly accruing LSL entitlements for your employees. Other actions you may need to take include; reviewing and updating your HR LSL policies and communicating the changes to your employees affected by the updated legislation.