The Australian Capital Territory has one of the shortest qualifying periods for long service leave in Australia. Employees in the ACT become entitled to LSL after just 7 years of continuous service — and the territory also operates portable long service leave schemes that allow workers in certain industries to carry their entitlements between employers.

For ACT employers, these rules create obligations that differ meaningfully from other states and territories. This guide explains how LSL works in the ACT, including standard entitlements, portability provisions, payment calculations, and common compliance pitfalls.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult an employment lawyer or the ACT Government for guidance specific to your organisation.

What Legislation Governs LSL in the ACT?

Long service leave for most ACT employees is governed by the Long Service Leave Act 1976 (ACT). This legislation establishes the minimum entitlements that employers in the territory must provide to their employees.

In addition, the Long Service Leave (Portable Schemes) Act 2009 (ACT) establishes portable LSL schemes for specific industries, including building and construction, community services, contract cleaning, and security.

As with all Australian jurisdictions, an enterprise agreement or modern award may provide more generous entitlements than the legislation. The employee is always entitled to whichever provision is most favourable.

Standard Long Service Leave Entitlements

The 7-Year Qualifying Period

ACT employees are entitled to 6.0667 weeks of long service leave after 7 years of continuous service with the same employer. This is equivalent to approximately 6 weeks and 1 day, or roughly 230 hours for a full-time employee working 38 hours per week.

The 7-year qualifying period makes the ACT one of the most accessible jurisdictions for LSL in Australia. By comparison, most other states require 10 years before the full entitlement is triggered.

Accrual After the Initial Period

After the initial 7-year entitlement, employees continue to accrue long service leave at the rate of 6.0667 weeks for every subsequent 7 years of service. This works out to approximately 0.8667 weeks per year of continuous service.

Example: An employee with 14 years of service would be entitled to:

2 × 6.0667 weeks = 12.1334 weeks of long service leave

Part-Time Employees

Part-time employees accrue long service leave on a pro rata basis, calculated according to their ordinary hours of work relative to full-time hours.

Example: A part-time employee working 25 hours per week for 7 years would be entitled to:

6.0667 weeks × (25 ÷ 38) = 3.99 weeks of long service leave

Casual Employees

Casual employees in the ACT may be entitled to long service leave if they have been engaged on a regular and systematic basis for the qualifying period. The test focuses on whether the employment relationship was continuous in substance, even if the hours worked varied.

Pro Rata Entitlements on Termination

After 5 Years of Service

In the ACT, employees who are terminated (or who resign in certain circumstances) after at least 5 years of continuous service may be entitled to a pro rata payment of long service leave. This is a more generous threshold than many other jurisdictions.

The pro rata payment is calculated as:

(Years of service ÷ 7) × 6.0667 weeks

Example: An employee terminated after 6 years of service would receive:

(6 ÷ 7) × 6.0667 = 5.2 weeks of pro rata LSL

Conditions for Pro Rata Payment

Pro rata LSL on termination is generally payable when:

The employer terminates the employment (for reasons other than serious misconduct)
The employee resigns due to illness, incapacity, or domestic pressing necessity
The employee dies during employment (paid to the estate)

Pro rata LSL may not be payable if:

The employee is dismissed for serious misconduct
The employee voluntarily resigns without qualifying reasons (depending on service length)
The employee has less than 5 years of continuous service

Always check the specific terms of any applicable award or enterprise agreement, as some provide more generous pro rata access.

Portable Long Service Leave in the ACT

What Is Portable LSL?

Portable long service leave allows workers in designated industries to accumulate LSL entitlements across multiple employers within the same industry. Instead of losing their LSL progress each time they change jobs, workers carry their entitlements with them.

This is particularly important in industries with high turnover or project-based employment, where workers rarely stay with a single employer for 7 or more years.

Which Industries Are Covered?

The ACT operates portable LSL schemes for the following industries:

Building and construction — Managed by the ACT Long Service Leave Authority
Community services — Including aged care, disability services, and family support organisations
Contract cleaning — Workers employed in commercial cleaning services
Security — Workers in the security industry

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How Portable LSL Works

Under a portable scheme:

Employer registration: Employers in covered industries must register with the ACT Long Service Leave Authority
Levy payments: Employers pay a quarterly levy based on the wages of their eligible workers
Service accumulation: Workers accumulate service credits regardless of which registered employer they work for
Entitlement claims: When a worker reaches the qualifying period (typically 7 years of aggregate service in the industry), they can claim LSL from the Authority — not from their current employer

Employer Obligations Under Portable Schemes

If your business operates in a covered industry in the ACT, you must:

Register with the ACT Long Service Leave Authority
Report on all eligible employees each quarter
Pay the levy on time (currently calculated as a percentage of ordinary wages)
Notify the Authority when employees start or leave your business
Display information about the scheme in your workplace

Failure to register or pay the levy can result in significant penalties and back-payment obligations.

Checking If Your Industry Is Covered

If you are unsure whether your business falls within a covered industry, contact the ACT Long Service Leave Authority directly. Industry boundaries can be complex — for example, a company that provides both cleaning and security services may need to register under both schemes.

The Authority maintains a register of covered employers and can advise on your obligations.

How Is Long Service Leave Paid?

Ordinary Rate of Pay

Long service leave in the ACT must be paid at the employee’s ordinary rate of pay at the time the leave is taken. This includes:

Base salary or wages
Regular allowances that form part of normal remuneration
BUT NOT: overtime, penalty rates, or irregular bonuses

Payment Timing

Employers should pay long service leave before the employee commences leave. For termination payouts, the amount must be included in the employee’s final payment.

Tax Treatment

Long service leave payments are taxable income. The tax treatment depends on whether the leave is taken as time off (taxed as normal income) or paid out on termination (where concessional tax rates may apply for the pre-August 1978 component, if relevant).

Continuous Service in the ACT

What Counts as Continuous Service?

The following periods count towards continuous service for LSL purposes:

All paid leave (annual leave, personal leave, public holidays)
Unpaid parental leave (up to 12 months)
Workers’ compensation periods
Jury duty
Authorised short-term unpaid leave

What May Break Continuity?

Unauthorised absences exceeding a reasonable period
Resignation followed by a gap before re-employment
Termination and subsequent re-hire (unless continuity is preserved by agreement)

Business Transfers

When a business is transferred or sold, the new employer generally inherits the LSL liabilities of the transferring employees. This applies to both the standard scheme and portable schemes.

Employers acquiring a business in the ACT must carefully assess any inherited LSL obligations during due diligence.

Record-Keeping Requirements

ACT employers must keep detailed records of:

Employee start dates and periods of continuous service
Any breaks in service and the reasons for them
LSL entitlements accrued and taken
Payment amounts and dates
Correspondence relating to LSL requests and approvals

Records must be retained for at least 7 years and made available for inspection on request.

For employers covered by portable schemes, the ACT Long Service Leave Authority maintains its own records, but you are still responsible for submitting accurate quarterly returns.

Common Compliance Mistakes

1. Missing the 5-Year Pro Rata Threshold

Many ACT employers are unaware that pro rata LSL may be payable from 5 years. Always check whether a departing employee qualifies for a pro rata payment.

2. Not Registering for Portable Schemes

Employers in covered industries who fail to register with the Authority face penalties and must pay retrospective levies. If you are unsure whether your industry is covered, seek advice early.

3. Underpaying the Levy

The portable LSL levy is calculated on ordinary wages, including some allowances. Underreporting wages can result in audit adjustments and penalties.

4. Ignoring Business Transfer Liabilities

When acquiring a business, always assess the LSL liabilities of transferring employees. These can represent a significant financial obligation, particularly for long-serving staff.

5. Paying at the Wrong Rate

LSL must be paid at the employee’s current ordinary rate, not the rate at which the entitlement first accrued. Employees who have received pay rises over 7 years must be paid at their current rate.

How Leave Balance Helps ACT Employers

Leave Balance simplifies long service leave management for ACT businesses by:

Tracking the 7-year qualifying period and alerting managers when employees approach their entitlement date
Calculating pro rata entitlements automatically for employees with 5+ years of service
Managing portable LSL reporting by maintaining accurate records of eligible employees and service periods
Generating termination payout calculations that account for LSL, annual leave, and other entitlements
Maintaining audit-ready records that satisfy ACT legislative requirements

Whether you operate under the standard scheme or a portable scheme, Leave Balance ensures your LSL obligations are met accurately and on time.

Key Takeaways

ACT employees are entitled to 6.0667 weeks of LSL after 7 years of continuous service
Pro rata LSL may be payable from 5 years of service on termination
The ACT operates portable LSL schemes for building and construction, community services, contract cleaning, and security
Employers in covered industries must register and pay a quarterly levy to the ACT Long Service Leave Authority
LSL must be paid at the employee’s current ordinary rate of pay
Records must be kept for at least 7 years
Always check whether your industry falls within a portable scheme

Understanding both the standard and portable LSL obligations in the ACT is essential for compliance. Getting it right protects your business and ensures your employees receive their full entitlements.