Proposed Portable Long Service Leave Scheme for the Community Services Sector

The South Australian Government has released the Portable Long Service Leave Bill 2024 for consultation.

The intention expressed by the Government is to legislate to ensure that relevant employers contribute long service leave payments to a portable industry fund in respect of designated workers.  The Bill, if passed, will establish a scheme for the portability of long service leave in the community services sector and will provide for the ability to extend the scheme to employees in other sectors and for other purposes in the future.  Exactly what those other sectors will be has not been revealed.

If you are in the community services sector  being the ‘area of work within the community that involves the provision of community services’ as specified by the Bill (or prescribed by regulation), the Bill is proposed to apply to your organisation as an employer, if you provide services of this kind:

Aboriginal and Torres Strait Islander community services
Accommodation support services
Advocacy services
Alcohol and other drug services
Child safety and support services
Community development services
Community education services
Community legal services
Counselling services
Disability emergency response services
Disability support services Employment services
Family and domestic violence services
Family day care services
Financial counselling services
Foster care and out-of-home care services
Home and community care services
Homelessness support services
Lesbian, gay, bisexual, transgender and intersex services
Mental health services
Migrant and multicultural support services
Offenders transitioning services
Respite services Seniors community support services
Social housing services
Violence prevention services
Women’s services
Youth justice services
Youth support services

What do you have to do if covered?

If the Bill is passed and you are an employer in South Australia and engage 1 or more designated workers you must apply for registration with the new community services long service leave scheme.[1]  A register of workers will be kept by the industry board.  You will then, as a relevant employer have various obligations, including lodging of returns, payment of annual levies (based on a percentage of your workers’ ordinary weekly wages), and pay the amount of an assessment determined by the Board within 21 days (unless a longer period is allowed).

One effect of this is that relevant employers will no longer be able to retain and make use of the organisation’s funds in respect of designated workers yet to crystalise an entitlement to take or be paid leave. Rather, returns will be paid to and managed by the industry board in respect of designated workers. You will no longer accrue and pay LSL to your workers directly.  You will however be entitled to a tax deduction of the levy paid in each year (capped at 3% of employee ordinary time earnings).

The transitional provisions which are proposed add complexity to this proposal, and in simplified terms will preserve continuity of service of relevant employees up to a ‘designated day’ and thereafter that service will be credited as effective service for portable LSL purposes.  If the employee becomes entitled to long service leave (or payment) under the proposed legislation, the Community Sector Board may recover prescribed amounts from the employer having regard to continuous service under the current LSL Act.

Consultation on the Bill and the Government’s intention

The period of consultation, having regard to the significance and potential reach of the Bill, is very short.  Feedback is to be given by 9 February 2024.

The Government has been clear in its intention to introduce the Bill to Parliament in early 2024, with intended commencement of the operation of the ‘Community Services Board’ from July 2024.

Summary

The impact of this proposed legislation for the Community Services sector will be significant.  Employers should seek specific advice to their circumstances, as a matter of urgency, to enable budgeting, strategy and planning for the intended and likely changes.

The full text of the Bill can be accessed here.