Portable Long Service Leave – NSW

From 1 July 2025, a new portable long service leave scheme will apply to employees within the community services sector in New South Wales. This reform enables eligible employees to accrue long service leave entitlements based on total service within the sector, regardless of the number of employers they have worked for.

While the scheme aims to address mobility and prevalence of part-time, casual, and contract work within the community services sector, and intends to attract employees to the industry, the change will result in an increase in costs, as well as additional reporting and compliance obligations, for community service organisations.

Employers must register their employees with the Long Service Leave Corporation within one month of the scheme’s commencement, being 1 July 2025. Transparency with staff is critical regarding the new entitlements, which may also include updated employment agreements.

Penalties may apply for employers who fail to register eligible workers within the required timeframe as specified in the Act.

Additionally, it is important to determine the applicability of the scheme to your organisation. Certain sectors, such as residential aged care and early childhood care and education, are not included, while Commonwealth, State or Local Government authorities are not considered employers for the purposes of the scheme.

The scheme is funded through a levy paid by employers on a quarterly basis to the Long Service Leave Corporation. Employers will need to prepare and lodge a form, which includes salary and wage information for the quarter, with a levy payable based on a percentage (currently expected to be 1.7%) of gross ordinary wages paid to registered workers.

The first lodgement is set to be due in April 2026, which will include the first 3 quarters of reports, and has been set to provide organisations adequate time to prepare and collate records for accurate reporting, after which point employers will be required to lodge and make levy payments on a quarterly basis.

Employees will now accrue long service leave based on their time within the community service sector regardless of the number of different employers they may work for. After completing 7 years of service within the industry, an employee is entitled to 6.1 weeks of paid long service leave and will continue to accrue 0.8667 weeks for each additional year of service.

Employees that register before 31 December 2025 are classified as foundation workers and receive a one-off 365-day service credit, allowing them to access their long service leave entitlement after 6 years of service, rather than 7 years.

Service time accrued by employees prior to 1 July 2025 do not count toward the portable scheme, however the employee may continue to access entitlements under the existing Long Service Leave Act 1955 for that period.

When payments of portable long service leave are made by the employer, they can seek reimbursement from the Long Service Leave corporation.

Organisations should ensure that their accounting treatment of the levy payments, leave provision, and reimbursement asset are accurate and comply with Australian Accounting Standards.

Accru Felsers offers assistance with complex accounting matters, as well as financial reporting and a range of audit and assurance services for a variety of for-profit and not-for-profit organisations. Please feel free to contact us should you require any further information.