Most Australian technology companies are not covered by a modern award — they operate under the National Employment Standards (NES) and individual employment contracts. That makes leave management simpler in theory, but the flexibility that tech offers — remote work, flexible hours, global teams — creates its own compliance traps.
This guide covers leave management for Australian technology businesses: the NES entitlements that apply to all employees, how to manage leave across remote and flexible teams, and the compliance mistakes most common in the sector.
Key takeaways
- All Australian technology employees — regardless of award coverage — receive 4 weeks annual leave per year under the NES.
- Part-time tech employees accrue annual leave and personal leave pro-rata based on ordinary hours.
- Technology companies commonly offer above-NES leave as a recruitment benefit — additional annual leave, purchased leave, or flexible leave arrangements.
- Remote and distributed tech teams must still comply with Australian leave law — the NES applies regardless of where the employee works.
- Leave loading is not required unless the employee is covered by a modern award or enterprise agreement that mandates it.
The NES as the default framework
Most technology employees — software engineers, product managers, designers, data scientists — are not covered by a modern award. The Clerks—Private Sector Award 2020 covers some administrative and clerical roles, but most technology professionals fall outside award coverage.
This means their leave entitlements are governed by the NES alone, supplemented by their employment contract. The NES provides:
| Leave type | Full-time entitlement | Part-time (pro-rata) | Casual |
|---|---|---|---|
| Annual leave | 4 weeks per year | Pro-rata by ordinary hours | None |
| Personal/carer’s leave | 10 days per year | 10 days pro-rata | None (2 days unpaid per occasion) |
| Compassionate leave | 2 days per occasion | 2 days per occasion | 2 days unpaid per occasion |
| Family & domestic violence leave | 10 days paid per year | 10 days pro-rata | 10 days paid per year |
Key point: The NES always applies as the minimum floor. An employment contract can provide more leave than the NES — for example, 5 weeks annual leave — but cannot provide less.
Leave loading in technology
Leave loading is not a NES requirement. It is only mandatory where a modern award or enterprise agreement requires it. Since most technology employees are not covered by an award, leave loading is generally not applicable.
However, if your technology company has employees covered by the Clerks—Private Sector Award (for example, office administrators or receptionists), those employees are entitled to 17.5% leave loading on annual leave.
Check your award coverage: If any employees are covered by a modern award — even if most of your workforce is not — those employees receive leave loading.
Above-NES leave as a recruitment tool
The Australian technology sector uses above-NES leave as a competitive recruitment benefit. Common offerings include:
| Benefit | Typical offering | NES minimum |
|---|---|---|
| Additional annual leave | 5–6 weeks | 4 weeks |
| Purchased leave | Employees buy additional leave days | Not in NES |
| Work-from-anywhere leave | Additional days to work remotely overseas | Not in NES |
| Birthday leave | 1 day off per year on employee’s birthday | Not in NES |
| Volunteer leave | 1–2 days per year for community service | Not in NES |
These are contractual benefits, not statutory entitlements. They are governed by the employment contract and must be managed consistently. If you offer purchased leave, the terms — including what happens to unused purchased leave on termination — must be clearly documented.
What happens to above-NES leave on termination?
This is a critical area of confusion:
- Statutory annual leave (NES): All accrued but unused annual leave must be paid out on termination.
- Additional contractual leave (above NES): Payment depends on the employment contract. If the contract states the additional leave is paid out on termination, it must be paid. If the contract is silent, the default position is that it is not payable — but this should be explicitly stated.
Managing leave across remote and distributed teams
Technology’s remote-first culture creates specific leave management challenges:
Flexible working arrangements
Many tech employees work flexible hours — starting early, finishing late, or working compressed weeks. Leave must be tracked against ordinary hours, not just days.
Example: An employee working a 9-day fortnight (9 × 8.5 hours = 76.5 hours per fortnight) accrues leave based on their ordinary hours, not based on a standard 38-hour week. Their annual leave entitlement is 4 weeks of their ordinary hours.
Employees working interstate or overseas
The NES applies to employees working in Australia. If a technology company has employees working remotely from other states, the NES applies uniformly. Long service leave, however, is state-based — an employee working remotely from Victoria is subject to Victoria’s Long Service Leave Act 2018, not the state where the employer is headquartered.
If an employee works overseas for an extended period, the interaction between Australian leave law and the overseas jurisdiction’s laws becomes complex. The Fair Work Ombudsman applies Australian law to employees who are based in Australia, but the position becomes less clear for employees permanently based overseas.
Public holiday management
Technology companies with employees across multiple Australian states face the complexity of different public holiday dates in each state. The NES provides that employees are entitled to public holidays as declared in their state or territory.
Practical solution: Set your leave management system to automatically apply the correct public holidays based on each employee’s state of residence.
Personal leave and mental health
The technology sector faces elevated rates of burnout and mental health challenges. Personal/carer’s leave under the NES serves as the primary safety net.
Key rules for employers:
- Employees can use personal leave for their own illness or injury — including mental health conditions
- Employees can also use personal leave to care for an immediate family member or household member who is ill or injured
- Employers may request evidence (medical certificate or statutory declaration) — but demanding a certificate for every absence may be considered unreasonable
- Unused personal leave accumulates year to year — there is no cap
What employers cannot do:
- Refuse to accept a valid medical certificate
- Require the employee to use annual leave instead of personal leave when they are sick
- Set attendance targets that penalise employees for using personal leave
- Require disclosure of the specific diagnosis (the CID code is voluntary)
Common compliance mistakes in technology
1. Not accruing leave for part-time contractors reclassified as employees
If a worker is reclassified from contractor to employee — for example, after a long engagement — they are entitled to back-accrued leave from the start of the engagement. The Fair Work Act looks at the substance of the arrangement, not the label in the contract.
2. Offering “unlimited leave” without a statutory floor
“Unlimited leave” policies are popular in technology but must still provide at least the NES minimum. If an employee takes no leave under an unlimited policy, they still accrue statutory annual leave — and it must be paid out on termination.
3. Not paying out contractual leave on termination
If the employment contract entitles the employee to additional leave above the NES, and the contract says it is paid on termination, it must be paid. Forgetting this creates a back-pay liability.
4. Ignoring long service leave for long-tenured employees
Technology employees who stay with the same company for 7+ years accrue long service leave under state legislation. Forgetting to track this — particularly for employees who have been with the company since the start-up phase — creates a significant liability on termination.
5. Applying overseas leave policies to Australian employees
A technology company headquartered in the US or UK must still comply with the NES for its Australian employees. A US-style “unlimited PTO” policy that provides less than 4 weeks of leave is a breach of Australian law.
Practical steps for technology employers
- Confirm which employees are covered by a modern award — if any are, apply the award’s leave provisions.
- Document all above-NES leave benefits in the employment contract, including what happens on termination.
- Track ordinary hours for flexible workers to ensure accurate leave accrual.
- Apply state-based public holidays automatically based on each employee’s location.
- Track long service leave separately under the applicable state legislation.
- Set a clear leave policy for remote and distributed teams — including how leave is requested, approved, and tracked.
For more on your core obligations, see our guide to annual leave entitlements in Australia, personal leave in Australia, and the Fair Work compliance checklist.
Frequently asked questions
Are technology employees covered by a modern award?
Most technology professionals — such as software engineers, product managers, and designers — are not covered by a modern award. Their leave entitlements are governed by the NES and their employment contract. Administrative or clerical staff may be covered by the Clerks—Private Sector Award.
Do I need to pay leave loading to tech employees?
Leave loading (17.5%) is only mandatory where a modern award or enterprise agreement requires it. Since most technology employees are not award-covered, leave loading is generally not required unless specified in the employment contract.
Can I offer “unlimited leave” to Australian employees?
Yes, but the policy must still provide at least the NES minimum of 4 weeks annual leave for full-time employees. Employees on unlimited leave still accrue statutory annual leave, and unused statutory leave must be paid out on termination.
How do I handle leave for remote employees in different states?
The NES applies uniformly regardless of the employee’s state. However, long service leave is state-based, and public holidays differ by state. Apply the correct public holidays based on each employee’s state of residence.
What happens to unused leave on termination?
All accrued but unused statutory annual leave (NES) must be paid out on termination. Additional contractual leave (above NES) is paid only if the employment contract specifies this. Personal leave is not paid out on termination.
Sources
- Annual leave — Fair Work Ombudsman
- Sick and carer’s leave — Fair Work Ombudsman
- National Employment Standards — Fair Work
- Long service leave — Fair Work Ombudsman
- Fair Work Act 2009
This article is general information, not legal advice. Confirm entitlements with the Fair Work Ombudsman and the applicable modern award or employment contract.