On 5 September 2018, the Long Service Benefits Portability Act 2018 (Vic) (the Act) passed through parliament. The Act will come into effect on 1 April 2019, and will grant portable long service leave to employees within the Community Services, Security and Contract Cleaning sectors.
Under the new scheme, eligible employees will accumulate long service leave irrespective of how many different employers (within the industry) they have over the required period of service. After completing seven years of recognised service, eligible and registered employees may apply to the Authority for payment of long service leave benefits equal to 1/60th of their total period of service.
With respect to the community services sector, the Act provides that the benefits apply to Community Service employees who work for a for-profit entity that provides support to persons with a disability or other vulnerable people, but not to workers ‘employed by (an) employer whose primary role is to provide health services’ to persons with a disability. Additionally, it will not apply to employees covered by the Aged Care Award 2010 or government community services.
The Act provides that a Statutory Authority will be established to operate and distribute cash payments for employees (within the industry) who apply for the benefits from the authority. Employers may face penalties if they do not register themselves and their employees with the statutory authority. In order to fund the scheme, the new Authority Board will set a levy that employers will be required to pay.
Employers will be required to submit quarterly returns to the Authority which must include the names of employees who worked during that quarter, the total ordinary payment by the employer to the worker for work performed during that quarter and the number of days the payment was made for, in addition to any other prescribed information.
Victorian IR Minister Natalie Hutchins has pledged that the Victorian government will begin designing and adapting the new schemes for the early childhood and disability sectors in the near future.
If you have any questions or require advice in relation to possible obligations under the new scheme, please do not hesitate to contact Nick Stevens, Jane Murray or Angharad Owens-Strauss.