Long Service Corporation: The NSW Portable Long Service Leave Scheme

What it is

New South Wales runs a portable long service leave scheme for building and construction workers under the Building and Construction Industry Long Service Payments Act 1986 (NSW). The Long Service Corporation administers it.

The scheme records a worker's days in the NSW industry rather than their service with any single employer. A carpenter who works for six different builders across a decade still reaches the entitlement, because the record follows the person and not the job.

How the scheme is funded

NSW is a levy scheme. The long service levy applies to building and construction work in NSW costing $250,000 or more including GST, and the rate is 0.25 per cent of the total cost of the work.

The levy is paid by the applicant for the building approval or by the person the work is being done for. On Crown work the contractor generally pays it. It must be paid before building work starts, and the construction certificate or complying development certificate is not released until it has been.

This is the structural point most builders get wrong. In Victoria, Western Australia, South Australia, Tasmania and the ACT the employer pays a percentage of ordinary wages on a recurring return. The cycle differs by scheme: quarterly in Victoria, Western Australia and the ACT, bi-monthly in South Australia and monthly in Tasmania. In NSW the money comes off the project once, at approval, and the builder pays nothing per worker.

Who has to register

• Employers of eligible building and construction workers in NSW must register with the Corporation and register each of their workers
• Workers may register themselves if they are unsure their employer has done it
• Contractors, working directors and sole traders may register in their own right and accrue service on their own account

Only work that meets the definitions of building and construction work in the 1986 Act can be recorded. Work carried out on Commonwealth places is currently outside the scheme, although the Corporation keeps a record of it.

How service is recorded

Employers notify the Corporation of each worker's service at the end of every financial year, and lodge start and end notices when a worker joins or leaves. Part-time work and casual work both count, since the unit is days in the industry rather than continuous employment.

Registered contractors report differently. They supply their taxable earnings each financial year through a tax agent, and the Corporation converts those earnings into an equivalent number of days worked in the NSW industry.

The entitlement

The scheme pays the equivalent of 8.67 weeks of pay for 10 years of recorded service. The payment is based on award rates or on the rate under a registered enterprise agreement, not on what the last employer happened to pay.

Benefits can be payable to workers with less than 10 years of recorded service in some circumstances, calculated pro rata.

An employer who pays a long service benefit directly to a worker under the Long Service Leave Act 1955 (NSW) can claim part or all of it back from the Corporation, provided both the employer and the worker are registered and the service is on the record.

Moving employers and moving states

Because the record sits with the Corporation, changing employers inside NSW changes nothing. The worker keeps every day.

Moving interstate is handled by the reciprocal arrangements between the eight schemes. Service recorded in another state or territory can be recognised toward a NSW claim, and NSW service can be recognised elsewhere. Give a new worker's scheme registration number to the Corporation so the transfer is clean.

What to do about it

• Register the business with the Long Service Corporation before you put a worker on
• Register each new worker within 7 days. The maximum penalty for missing this is $2,200
• Lodge start and end notices within 7 days of a worker starting or finishing. Same $2,200 maximum penalty
• Confirm by 31 July each year the workers you employed as at the preceding 30 June. Same $2,200 maximum penalty
• Pay the levy before work starts on any job of $250,000 or more, and keep the receipt with the approval file
• Keep books and records the Corporation can inspect