A New Era for Community Service Workers in NSW: Portable Long Service Leave Scheme

The new portable long-service leave scheme is set to introduce significant changes in the community service sector in New South Wales, Australia. 

This initiative, which will come into effect on July 1, 2025, aims to provide better job security and recognition for workers in an industry known for its high job mobility. 

Let's explore what this scheme entails and how it will impact both workers and employers in the sector.

This differs from traditional long-service leave, where entitlements are typically tied to a single employer.

Portable schemes are particularly beneficial for workers in sectors with high job mobility, where individuals often move between organisations or have short-term contracts.

Under a portable scheme, workers accrue long service leave entitlements based on their total time working in the industry, regardless of how many employers they have worked for.

Each state and territory in Australia has its own eligibility requirements and rules surrounding portable long-service leave. Industries that commonly provide employees with access to portable long-service leave include:

• Security
• Community services
• Building and construction
• Coal mining
• Contract cleaning

The specific entitlements and minimum service periods vary between jurisdictions. 

However, many workers in this sector often move between organisations or have short-term contracts, making it difficult for them to access their long service leave entitlements.

So, the NSW government has introduced a new portable long-service leave scheme for workers in the community service sector. This reform was passed by the NSW Parliament on June 20, 2024, and is set to commence on July 1, 2025. 

Under the new scheme, workers will be eligible for 6 weeks of paid leave after 7 years of employment in the sector. 

The reform was introduced to improve the lives of the estimated 250,000 hard-working and dedicated staff in various community service sectors, such as:

• SCHADs
• Domestic and family violence support
• Homelessness services
• Community housing
• Social workers
• Youth workers
• Aged care workers 
• Other community services

Both not-for-profit and for-profit organisations that provide community services will be included in the scheme.

This scheme recognises these workers' valuable contributions to society, provides them with improved job security, and recognises their service in the sector.

One of the key benefits of the scheme is that it encourages workers to stay in the community service sector long-term.

The scheme removes one of the barriers to job mobility within the sector by allowing workers to accumulate and retain their long service leave entitlements. 

This can lead to reduced stress and burnout among workers, as they can take their well-deserved leave without fear of losing their entitlements.

Organisations must familiarise themselves with the scheme's administrative requirements and ensure they comply with their obligations.

One of the key requirements for employers is the payment of a Scheme Levy. This levy will be used to fund the portable long-service leave entitlements for workers in the sector. 

Employers will also need to develop strategies for managing the scheme effectively within their organisations. This may include:

• Updating payroll systems to record and report on employee service and accruals accurately
• Communicating with employees about their entitlements under the scheme
• Ensuring adequate staffing levels to cover employees taking long service leave
• Budgeting for the financial costs of the Scheme Levy and leave payments
  
  

The bill underwent extensive consultation and review before being passed by both houses of Parliament on June 20, 2024.

Following the bill's passage, the scheme is now awaiting Royal Assent, which is the final step in the legislative process. Once Royal Assent is granted, the scheme will officially become law, with a commencement date of July 1, 2025.

Victoria

Victoria has expanded its portable long-service leave scheme to include the community services sector. Employers in this sector must register with the Portable Long Service Authority if they employ at least one person to perform community service work, whether they are a non-profit or for-profit entity. The scheme covers workers under five specific community services sector awards, regardless of their employment arrangement.

Queensland

QLeave administers the portable long service leave scheme for the community services industry in Queensland, which started on January 1, 2021. 

Employers pay a levy to QLeave each quarter and submit a return detailing their employees' wages. Workers are entitled to 6.1 weeks of long service leave, paid by QLeave, after accruing seven years of service in the industry, regardless of changes in employers.

Australian Capital Territory (ACT)

The ACT introduced a portable long-service leave scheme for the community sector in accordance with the Long Service Leave Act (Portable Schemes) Act 2009. Eligible workers can accrue long service leave entitlements while moving between employers or even while self-employed. 

As of July 1, 2010, registered workers are entitled to 4.33 weeks of leave after five years of recorded service and an additional 0.867 weeks for each year thereafter. Employers must register with ACT Leave and pay a levy of 1.85% of their employees' gross ordinary wages.

South Australia

The South Australian government has released a consultation draft of the Portable Long Service Leave Bill 2024, proposing a portable long-service leave scheme for the community services sector. Under the proposed scheme, workers would be entitled to 13 weeks of paid long-service leave after accruing the equivalent of 10 years of full-time employment.

• A new portable long-service leave scheme for community service workers in NSW will commence on July 1, 2025.
• The scheme covers many workers and organisations in the community service sector.
• Workers will accrue long service leave entitlements based on their length of service in the sector, regardless of how many employers they have worked for.
• The scheme benefits workers, including improved job security, recognition of service, and reduced stress and burnout.
• Employers must comply with administrative requirements, pay a Scheme Levy, and develop strategies for managing the scheme effectively.
• The Community Services Sector (Portable Long Service Leave) Bill 2024 has been passed by the NSW Parliament and is awaiting Royal Assent.
• Consider implementing an automated payroll system to streamline the management of portable long-service leave entitlements. Automated payroll can help ensure accurate record-keeping, simplify reporting, and reduce your organisation's administrative burden.

As the scheme's commencement date approaches, it is essential for both workers and employers in the community service sector to stay informed about its progress and prepare for its implementation.