Are you an employer in the Cleaning, Security or Community Services industry? If so, action is required!
Portable Long Service Leave (PLSL) is a new scheme that came into effect from 1 July 2019. It was created when the Victorian Government passed the Long Service Benefits Portability Bill in September 2018.
PLSL affects Victorians working in the industries of contract cleaning, security and community services (excluding NDIS funded services). The scheme allows these employees to build up long service, based on length of service within their industry, rather than length of service with one employer.
Employers with workers in these industries must register with the Portable Long Service Authority. Registration must be completed between 1 July and 30 September 2019 for established businesses. (New businesses must register within 3 months of establishment). More information on the scheme and how to register can be found here.
Registration can be completed online and businesses will be required to provide the following information as part of the registration process:
- Business name
- Business address
- ACN (if applicable)
How does the scheme work?
Once registered, employers must submit a quarterly return to provide information about all employees who worked for their business in that quarter, including the days they worked and the pay they received during the quarter.
Employers will then be required to pay a quarterly levy. The funds from this levy will be pooled into a central fund to pay long service entitlements to workers.
The Quarterly Return calculates the contribution to be made by the employer and is based on each worker’s ordinary pay multiplied by the levy for their industry.
The levy will be calculated as follows:
- 1.65% for community services
- 1.80% for contract cleaning
- 1.80% for security
After seven years of service within the industry, employees will be able to apply for a Long Service leave payment which will be paid as one lump sum. This sum will be equivalent to 1/60 of their total period of recognised service.
The scheme will recognise prior work history from 1 July 2018 to 30 June 2019 for workers within the contract cleaning and security industries, upon request from eligible employees.
Long Service leave was traditionally designed to reward employees who stayed with the one employer for a period of service. Many people believe, that a LSL scheme may no longer be practical in the modern workplace as only one in four Australians stay with the same employer for more than 10 years.
The PLSL scheme was introduced, because those working within the cleaning, security and community service industries rarely qualify for long service leave due to the contractual and project nature of these industries.
Interestingly, the Act has been drafted in such a way as to allow other industries to be included in the scheme in the future.
The scheme has been continuously opposed by many bodies including the Victorian Chamber of Commerce. Victorian Chamber believes that the scheme will increase the cost of labour without delivering a corresponding increase in productivity! They also believe that it will result in additional red tape and administration costs for employers and that these additional costs will discourage employment!