Time running out to clarify how portable long service leave scheme works Analysis

Time running out to clarify how portable long service leave scheme works

The Victorian community services portable long service leave scheme starts in less than three weeks.

We now know the Employer Levy for the community services industry will be 1.65 per cent of wages in 2019–20.

We know that organisations can register from 1 July 2019, and will need to lodge their first quarterly return (including details of all workers, their hours and pay rates) and make their first levy payment in October 2019.

We also know that the community services scheme is a ‘cash scheme’ where employees, after seven years or more, apply to the Authority to have their accrued entitlement paid out as money (instead of leave).

But there are lots of questions remaining. We still don’t know for sure which organisations are covered by the scheme, how to determine which employees are within scope and how the scheme will work where organisations have different entitlements under their enterprise agreements or other portable long service leave schemes.

The community services industry needs these questions answered urgently, so we are prepared for the scheme to begin on 1 July 2019.

VCOSS will continue to work with the Government and the Portable Long Service Leave Authority to clarify issues where there is ambiguity, and make sure community service organisations are provided with the support and information they need to meet their obligations.

VCOSS recently provided the government with feedback on the draft regulations for the scheme.

In particular we raised issues around:

Which employees are covered?

Before they can calculate their contributions, organisations need to know which staff members are in. They will need to provide the Authority with information about the hours and pay of staff members who are covered by the scheme.

The draft regulations exclude employees in executive and management roles, and roles that are ‘wholly administrative.’ VCOSS seeks clarification about whether the scheme will cover staff in middle management, administrative and executive support roles.

Are peaks bodies covered?

The status of peak bodies is still unclear. VCOSS seeks clarification around the inclusion of peak bodies and organisations that are federally funded.

What happens when organisations offer staff different leave entitlements to the scheme?

Some organisations have enterprise agreements with different or more generous conditions than the award and the scheme. For example, in some organisations staff can access some of their long service leave after five years. It is unclear how organisations will manage these differences, and what support will be available to do so.

When will the early learning and disability sectors be included?

The draft regulations propose including the early learning and National Disability Insurance Scheme organisations in the scheme from 1 January 2020. VCOSS recommends extending the inclusion date six months, to give these sectors more time to prepare for the transition.

Is community health included?

The legislation is unclear about whether community health is included. The situation for community health is complicated because they have existing portability entitlements (with different conditions about eligibility, when employees can access leave and how much they are entitled to) that will interact with the scheme, and may mean organisations will need to pay levies to both schemes.

VCOSS recommends extending their inclusion date at least six months to give community health more time to prepare for the transition.