On 1 July 2025, a new portable long service leave scheme commenced in New South Wales covering employers and employees engaged in the community services sector.
The Community Services Sector (Portable Long Service Leave) Act 2024 No 39 (NSW) (“the Act”) introduces a portable long service leave (PLSL) scheme, recognising continuous service and accrual of long service leave based on an employee’s time in the industry rather than with a single employer.
Community service providers must register and pay a levy calculated as a percentage of each registered employee’s gross ordinary wage to the Long Service Leave Corporation (NSW). The Corporation assumes responsibility for administration of the scheme.
Who is covered?
Employers covered by the scheme are employers who employ 1 or more persons to do community service work in NSW or supply a person through a labour hire arrangement to do community service work in NSW.
Community service work means:
- work to provide a community service, or
- work for an employer, if the predominant purpose of the employer is to provide a community service.
Community service means any of the 31 activities specified in Schedule 1 of the Act, including: community care and welfare services, disability supports and services, employment services and financial counselling services.
Paying the Levy
Employers are required to pay a quarterly levy calculated at 1.7% of the gross ordinary wages of employees.
The first levy payment (covering the first 3 quarterly returns) is due from April 2026. After the first levy return period, employers will be required to submit levy payments on a quarterly basis.
Accruing and taking long service leave
The rate of accrual of long service leave is unchanged i.e. 0.8667 weeks per year of continuous service. However, a registered worker who completes 2,555 days (7 years) or more of recognised service after 1 July 2025 is entitled to take 6.1 weeks of long service leave. The entitlement to leave under the old Act occurs after 10 years of continuous service.
Pro-rata payment of untaken long service leave is available after 5 years of recognised service if the worker has permanently ceased doing community service work and 10 weeks has passed since the day the worker permanently ceased work.
What Employers Need to Do
1. Register with the Scheme
- Every employer in the community services sector must register with the Long Service Leave Corporation.
- Registration must cover all eligible employees (full-time, part-time, and casual).
2. Quarterly Contributions
- Employers will be required to contribute to the scheme fund based on their payroll of eligible employees.
- Contribution rates will be set by regulation and published by the PLSL Authority.
- These contributions are in place of accruing long service leave liabilities on your books for covered employees.
3. Records and Report
- Employers must maintain accurate payroll records of eligible employees, service periods, and wages.
- Regular quarterly returns must be lodged with the Long Service Leave Corporation.
- These records will form the basis of calculating entitlements for employees.
No Double-Dipping during the Transition
Registered workers are not entitled to a double benefit if a long service leave entitlement has accrued prior to the commencement of the portable scheme.
Employers must continue to manage and honour existing entitlements accrued under the Long Service Leave Act 1955. These entitlements will not transfer into the new scheme. Employers will need to comply with both Acts. Employers are entitled to reimbursement of the proportion of long service leave payment that accrues after 1 July 2025.
Next Steps and Further Advice
There are several important tasks employers must undertake to adjust to the new scheme including registration, record keeping, quarterly returns and payments under the scheme. Employment contracts should be varied to reflect the new entitlement and leave policies and payroll systems updated.
Maguire Legal subscribers and clients operating community service businesses in NSW should contact us for further advice.
If you are not a subscriber or current client and would like further information or for any enquires, feel free to contact us here