Starting 1 July 2025, a new portable long service leave (LSL) scheme will take effect in New South Wales (NSW). Specifically designed for the community services sector, the scheme will allow eligible workers to accrue long service leave entitlements across multiple employers – addressing the industry’s unique employment patterns.  

This guide outlines who is covered, how the scheme works and what organisations in the community services sector need to do to comply with the upcoming changes. 

 

Who is covered by the NSW Portable Long Service Leave Scheme? 

The new portable long service leave scheme will primarily impact workers and employers within the community services sector. Community service has specific meaning in the Community Services Sector (Portable Long Service Leave) Act 2024, which outlines 31 different types of community services.  The scheme does not cover workers in residential aged care or early childhood care and education, even though these are commonly considered community services. 

The complete list of all 31 community service types is available on the NSW legislation website here.  

Organisations that employ individuals to perform community service work or supply workers through labour hire arrangements will be required to participate in the scheme. This includes non-for-profit organisations, private companies, and other entities whose primary purpose is to provide community services. 

Employees who provide community services will be eligible. Self-employed contractors doing community service work have the option to opt-in to the scheme by registering themselves as workers. Unlike the Victorian portable long service leave scheme, workers do not need to be covered under the community service sector award to be eligible. 

How the NSW Portable Long Service Leave Scheme Works  

Under the new scheme, eligible workers will be allowed to claim up to six weeks of long service leave with payment based on ordinary wages after seven years of service to the industry with one or more employers. 

Workers registered in the scheme within the first six months of commencement (1 July 2025 to 31 December 2025) are recognised as foundation workers and will receive a bonus year (365 days) to add to their service credits. 

Employers are required to pay a quarterly levy based on a percentage of wages or remuneration. The levy rate is expected to be 1.7%; however, it is to be determined by the Minister.  

How Can Organisations Prepare? 

To ensure a smooth transition to the new portable long service leave scheme, organisations should take several steps including: 

1.Understand the scheme  

It’s important for organisations to develop a clear understanding of how the new portable long service leave scheme operates. Some key questions to consider include: 

• Who is eligible for Portable Long Service Leave?  

• How does the scheme work? 

• How do employers and workers register for the scheme?  

• How do employees make a claim and what does the claim include? 

•  What happens if existing EBA or Fair Work instrument offer more generous long service leave entitlements than this new scheme? 

• What are the accounting and reporting requirements under this scheme? 

Please note: As of the date of this article, the Community Services Sector Long Service Leave Committee has yet to address some of the questions above.

2.Assess Eligibility and Coverage

Organisations need to determine whether their employees and the nature of their work is covered under the Community Services Sector (Portable Long Service Leave) Act 2024. Eligibility for some organisations may not be clear and could require legal assistance.

3.Budget for Financial Implications

Organisations must budget for the financial costs associated with the scheme, including the quarterly levy payments and the potential increase in long service leave payouts. This will help in managing cash flow. 

4.Update Payroll Systems  

This scheme will change how organisations should account for long service leave, especially during the transition period. It is crucial to update payroll systems to accurately record and report employee service and accruals.  

5.Communicate with Employees 

Ensuring staff are informed about their new entitlements under the scheme is essential. Organisations should inform their staff about how the scheme works, the benefits they will receive and how leave will be accrued and claimed under the new scheme. 

 

Need Help Preparing?  

If you have any questions about the new NSW portable long service leave scheme in the community service industry, please don’t hesitate to contact us.  

Speak to our specialists Paul Tan and Elton Teh.