Portable Long Service Leave provides benefits to both employers and employees.
Why does portable long service leave exist?
Anyone who works in the construction industry knows it’s a little bit different from the normal 9-5.
Portable long service leave exists because the construction industry is mostly project-based meaning workers frequently move from project to project and employer to employer.
Back in the 1970's industry groups (both employers and employees) recognised this unique aspect and that for most workers in construction long service leave would be unachievable. Wanting to ensure a strong, vibrant, and attractive industry to existing workers and newcomers they adopted a portable model and Portable Long Service Leave was born. This meant long service leave could be taken from employer to employer as long as you stayed in the industry.
Sounds good right? We think so and here’s why:
- It's portable - providing a fluid and efficient market of labour and skills throughout the industry when and where they are needed most, without losing entitlement.
- Attraction and retention - we think the construction industry is pretty awesome anyway (we’re biased) but the world is a pretty competitive place and construction like other industries wants to attract and retain the best. Portable long service leave ensures construction can compete with other industries by offering equivalent benefits.
- Refresh and reinvigorate - although a highly rewarding industry, construction can also be stressful. Constant problem solving, long hours, safety risks, billion dollar projects, million dollar equipment, and uncertainty between projects can manifest in costs to business of turnover, burnout, productivity and injury. Even small routine installation or service and maintenance tasks can be repetitious and take their toll through boredom and de-motivation. 13 weeks leave after 10 years service provides sufficient time to relax, recharge and then return to the industry boosting morale, reducing safety risks and increasing productivity.
- Cost certainty - portable long service leave provides cost certainty and allows an employer to discharge long service leave obligations through payment of a levy so you don’t have to worry about making a large payment sometime in the future. The levy is also tax deductible.
- Administration - we handle all the tracking of long service leave, calculation of the payment, and withholding tax.
We think portable long service leave is great and adds to the prosperity of the building and construction industry. However with everything there can be a downside. Here’s what's not so great about portable long service leave:
- It's portable - some employers see portability as a disincentive for workers to remain with them.
- Cost - portable long service leave is a cost to business. We acknowledge this and that’s why we focus on being a cost effective operation in order to keep the levy as low as possible whilst maintaining the viability of the fund. This in turn enables the industry to remain competitive.
- Administration - every two months you need to complete an employer return in order to track portable long service for your workers and calculate the appropriate levy. We try and make this as easy and quick as possible with online returns and easy payment options.
- Cashflow - every two months you need to pay the appropriate portable long service leave levy. This represents 2.00% of employee remuneration for that period (excluding apprentices) and undoubtedly needs to be planned for. However it’s a small amount in comparison with a claim for long service leave of which we manage and have responsibility for.
Over the years there have been hundreds of studies both locally and internationally on the effect of both paid and unpaid leave on the workforce. Most of these center around annual leave, sick leave, and parental leave but the premise applies to long service leave as well.
And that is, whether paid or unpaid, leave can have a significant positive effect on long term productivity through improvement in health and well being.
With tight margins and timeframes construction has to be an industry with high productivity. Downtime associated with unplanned sick leave, stress and mental health issues, injury, low morale and motivation can mean the difference in delivery of a successful project.
It stands to reason that long service leave has an important part to play in the industry.
Fortunately, in construction, long service leave is portable meaning it is more achievable and readily accessible providing a valuable tool to refresh and recharge your workforce and industry. Paying a bimonthly levy means there is no large payment to make when an employee takes leave either.
Because it is compulsory across the sector there are no free riders and whether you are a long term or short term employer you contribute equivalently and share the dividends of a highly productive workforce.
Other industries are catching onto the benefits this brings to an industry and construction has been doing it for 40 years!
Discuss Long Service Leave openly with your employees and plan and encourage with them to utilise it for a decent break ready to return to the workforce rested, motivated and productive. You can both share in the benefits it will bring!
If you are the Working Director of a company and perform building, electrical or metal trades work in South Australia, you can continue accruing long service leave by making voluntary contributions.
How does the Working Director scheme work?
Six returns are issued each year for the following bi-monthly periods
If you would like to make a contribution for that period, you will need to log in to the Employer Portal to lodge the return. An invoice for payment will be generated upon lodgement.
For each invoice you pay, we credit you with the maximum number of
service days in that two month period. If you pay all six invoices each
year, you will be credited with 260 service days.
Payment of each invoice is completely voluntary, however naturally if you choose not to make payment you will not be credited with any service days for that period.
Upon request, invoices can be paid in advance until the end of the financial year.
What is the current contribution rate?
The contribution rate for the 2022-2023 year is $265.
Contributions will accrue interest at 1.2% per annum.
When should I register?
The sooner you register, the sooner you will be eligible to take long service leave! In order for your time as a Working Director to be added onto the service days accrued as an employee, you will need to register within the following timeframe.
|Number of service days accrued||Timeframe to register after ceasing as an employee|
|Less than 1,300 (equivalent to 5 years full time employment)||2 years|
|More than 1,300 but less than 1,820 (equivalent to 7 years full time employment)||3 years|
|More than 1,820 (equivalent to 7 years full time employment)||No time limit (as if you have accrued 1,820 service days you are eligible to claim a pro-rata payment if you choose)|
How do I register?
Register as a Working Director through the Worker Portal. If the company is not registered, you will need to fill in an employer registration form online.