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Long service leave - NSW building and construction industry

Employers need to be aware that there are two long service schemes that may apply to the NSW building industry.

There are two long service schemes that may apply to the NSW building industry:

  • Building and Construction Industry Long Service Payments Act 1986 (NSW) (Portable Scheme)
  • Long Service Leave Act 1955 (NSW) (State Scheme)

Portable versus normal long service leave?

Under the State Scheme, an employee would receive long service leave after working for the same employer for 10 years).

Due to the project-based nature of the building and construction industry, it is unusual for someone to work with the same employer for 10 years. The Portable Scheme was established by the Long Service Corporation to ensure building and construction workers have the opportunity to access similar entitlements.

The scheme covers both employed and self-employed workers who perform building and construction work in NSW. The scheme rewards long service to the industry rather than long service to a particular employer.

It is important to note that an employee is only entitled to a benefit (payment or paid leave) under one of the schemes (for example, an employee may be employed by same employer for 10 years, they cannot get a payment from the Portable Scheme and take long service leave from their employer).

What do employers need to know?

The Portable Scheme only covers workers that perform building and construction work on or offsite. This includes workers who directly supervise building and construction work, providing they physically perform work. The scheme does not cover workers who perform office/ administrative tasks such as estimators, architects, designers and engineers.  These workers are covered by the State Scheme.

It is a requirement for all employers of workers who perform building and construction work within NSW to register with the Corporation as an employer and to notify the Corporation of a worker’s commencement, service, and cessation of employment. 

Within 7 days of a worker starting, employers need to complete and lodge a Start Notice for all workers covered by the scheme (whether they are already registered or not – if not already registered, the Corporation will register the worker).

Unlike other schemes, employers do not pay direct contributions for their employees and there is no cost to workers or employers to join the scheme.  The scheme is funded by a 0.25% levy as of 1 January 2023 (previously 0.35%) payable on building and construction works in NSW valued over $250,000 ($25,000 prior to 1 January 2023), usually when plans are approved by local councils and before the commencement of construction work (prior to building approval). Generally, the building applicant, or the person for whom the work is being done is responsible for paying the levy.

What entitlements do workers get?

After 10 years of service employees may be entitled to long service leave payments under the Portable Scheme or the State Scheme.

Portable Scheme State Scheme

10 years’ service must be in the building and construction industry and must be recorded with the Corporation.

10 years of service must be accrued with the same employer.
An employee is entitled to a payment equivalent to 8.66 weeks pay at the applicable award rate of pay or, where a certified enterprise agreement is in force, at the worker’s rate of pay under that agreement.

An employee is entitled to 2 months leave on ordinary pay.

Pro rata leave entitlements

If the employment relationship ends:  Portable Scheme State Scheme
After 55 days of service

The employee may be entitled to a payment if the employee:

  • is 55 years old and is leaving the industry permanently
  • is unable to work in the industry ever again, because of illness or injury
  • dies
N/A
After 5 years of service An employee may be entitled to a payment if the employee stopped during building and construction work

An employee may be entitled to a payment equal to the proportionate amount of 2 months for 10 years service if the employment relationship was terminated:

  • by the employer for any reason, other than the employee's serious or wilful misconduct, or
  • by the employee on account of illness, incapacity or domestic or other pressing necessity, or by reason of the employee's death
After 10 years of service but less than 15 N/A The employee will be entitled to a proportionate amount on the basis of 3 months for 15 years service

How to join

To register as an employer under the Portable Scheme you must complete a registration form, which can be obtained by calling 13 14 41 or by completing the form online. 

What happens after you notify the Corporation of a new employee starting?

Each July employers are required to complete an Employer Return, either online or paper form. The return provides details of all workers recorded as being employed. Employers need to check details and provide details of each employee’s service (and indicate whether any of those workers have since ended employment, and identify any employees not on the return). 

There is an obligation to notify the Corporation via an End Notice of an employee’s termination, within 7 days of the employee’s termination.  

What if I don’t notify the Corporation of eligible workers or record worker service? 

The Portable Scheme is compulsory for employers. 

The Corporation aims to educate and assist employers meet their obligations however does have the power to issue of on-the-spot penalty notices (fines), and substantial penalties for each non-compliance on the scheme’s requirements, for example, a maximum penalty of $2200 may apply for failing to register a worker within 7 days of employment starting.

Note

For an employee to fall within the Portable Scheme they need to be either doing work or directly supervising work that has its minimum rate of pay fixed under one of the following modern awards:

  • Asphalt Industry Award 2020 [MA000054].
  • Building and Construction General On-site Award 2020 [MA000020].
  • Electrical, Electronic and Communications Contracting Award 2020 [MA000025].
  • Joinery and Building Trades Award 2020 [MA000029].
  • Mobile Crane Hiring Award 2020 [MA000032].
  • Plumbing and Fire Sprinklers Award 2020 [MA000036].
  • Manufacturing and Associated Industries and Occupations Award 2020 [MA000010] (but only to the extent which it relates to performance of work as a carpet layer).

To find out more, contact HIA's Workplace Services team

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