You have just realised that one of your employees passed the seven-year mark, or you are buying a business whose staff have been with it for a decade, and the number you need is the same: how much long service leave has accrued and what will it cost? In Victoria the answer comes from the Long Service Leave Act 2018 (Vic) (the Act), which applies to almost every employee in the state. The Act gives every covered employee, including casual, seasonal and fixed-term workers, an entitlement to long service leave once they complete seven years of continuous employment with one employer. The entitlement is one sixtieth of the employee's total period of continuous employment, payable on ordinary pay. The arithmetic is simple. The traps are in deciding what counts as continuous service, and this article walks through both.
The Rule: Seven Years of Continuous Service, Then a Week for Every 60
Section 6 of the Act states the core entitlement: after completing seven years of continuous employment with one employer, an employee is entitled to long service leave on ordinary pay equal to 1/60th of their total period of continuous employment, less any long service leave already taken. That works out to one week of leave for every 60 weeks of service, or roughly 0.867 weeks per year. The entitlement keeps growing with no cap, so an employee who stays 15 years accrues 13 weeks and one who stays 20 years accrues 17.33 weeks.
The Act reaches almost all employees. The definition of employee in s 3 includes full-time, part-time, casual and seasonal workers, apprentices and people learning an occupation, and most public sector employees. The main exclusions in s 5 are employees covered by another Victorian long service leave scheme, notably construction workers in the portable scheme under the Construction Industry Long Service Leave Act 1997 (Vic) and teachers under the Education and Training Reform Act 2006 (Vic), plus employees whose workplace agreement gives them more favourable long service leave entitlements, where the Industrial Division of the Magistrates' Court has found the agreement more favourable.
Two features of the Act matter when you calculate. First, continuous employment is measured against "one employer", and s 11 defines that phrase broadly. Service with a related company, service across a business sale where the employee keeps working, and certain asset transfers and contracting-out arrangements all count as service with the same employer. A new owner steps into the old owner's shoes, including for leave that accrued before the sale. Second, the leave is paid at ordinary pay as defined in s 15, being the pay the employee is entitled to on the day the leave starts, calculated on their normal weekly hours at their ordinary time rate. Where no ordinary rate is fixed, the Act applies the most generous of the average weekly rates over the previous 52 weeks, the previous 260 weeks, or the whole period of employment.
Once the seven years are up, an employee can request leave of at least one day under s 18, and you must grant it as soon as practicable unless you have reasonable business grounds to refuse. You can also direct an employee to take long service leave, but only with at least 12 weeks' written notice, and an employee who disagrees can challenge the direction in the Industrial Division of the Magistrates' Court under s 19. You may agree to let an employee take leave before the seven-year mark, but if employment ends before the entitlement accrues, you can deduct the advanced amount from final payments under s 8.
The Figures at a Glance
Because the accrual rate is uniform, the entitlement for any length of continuous service is easy to read off. The tables below set out the accrual by employee type and by years of service, assuming no long service leave has already been taken.
| Employee type | Qualifying service | Accrual | What actually varies |
|---|---|---|---|
| Full-time, part-time and fixed-term | 7 years | 1/60th of service | Standard continuity rules; paid leave never breaks service |
| Casual | 7 years | 1/60th of service | Gaps over 12 weeks can break service; parental leave counts only up to 104 weeks |
| Seasonal | 7 years | 1/60th of service | Off-season gaps generally do not break service; same 12-week rules as casual |
| Years of continuous service | Weeks of service | Long service leave accrued |
|---|---|---|
| 7 | 364 | 6.07 weeks |
| 8 | 416 | 6.93 weeks |
| 10 | 520 | 8.67 weeks |
| 12 | 624 | 10.40 weeks |
| 15 | 780 | 13.00 weeks |
| 20 | 1,040 | 17.33 weeks |
The Victorian Government publishes a long service leave calculator that applies the Act's rules, and it is worth using as a cross-check. Its own warning is important: if a federal award or enterprise agreement contains long service leave provisions for the employee, the Act may not apply, so confirm the governing instrument before relying on these figures.
Two Worked Examples
Example 1: The Standard Case
Priya is a full-time office manager earning $1,300 a week and has 10 years of continuous service with the same employer. She has taken no long service leave. Ten years is 520 weeks, so her entitlement is 520 divided by 60, which is 8.67 weeks. At $1,300 a week that is about $11,267. If she takes the leave as time off, that is the amount you pay her across the leave period. If her employment ends before she takes it, the same amount is due and payable on her final day under s 9.
Example 2: The Unpaid Leave Trap
Mia has also been with her employer for 10 years at $1,300 a week, but 18 months of that was unpaid parental leave, about 78 weeks, with no written agreement that it counts as service. Under s 13, only the first 52 weeks of unpaid leave count towards the period of continuous employment. Her countable service is 520 weeks minus 78 plus 52, or 494 weeks. Her entitlement is 494 divided by 60, which is 8.23 weeks, about $10,703. The 26 weeks of service that did not count cost her roughly $564 in long service leave, which is exactly why accurate service records matter.
A third scenario is worth naming precisely because it is the one employers get wrong. An employee who leaves at six years and eleven months has no entitlement at all. The Act provides no pro-rata payment before the seven-year mark, so nothing is payable under the Act when employment ends.
Where the Standard Figure Does Not Apply
The uniform rate assumes standard continuous service, and the Act adjusts the figure when these situations arise:
- Unpaid leave beyond 52 weeks: Only the first 52 weeks of any unpaid leave count towards continuous service. The rest counts only if the leave was taken on account of illness or injury, the parties agreed in writing before the leave that it would count, or the employment agreement says it counts (ss 13 and 14).
- Casual and seasonal gaps over 12 weeks: A break of more than 12 weeks between engagements normally breaks continuity for casual and seasonal employees. It does not if the absence was agreed before it started, arises from the terms of engagement, is caused by seasonal factors, or the employee has been engaged regularly and systematically with a reasonable expectation of re-engagement (s 12).
- Termination and re-employment: If employment ends and the employee is re-employed within 12 weeks, service is continuous. The same applies where an apprenticeship ends and the former apprentice is re-employed within 52 weeks.
- Change of ownership and restructures: Under s 11, a new owner takes on the employee's full service history, including leave accrued before the sale, and cannot refuse to provide it. Dismissing staff just before a sale and re-engaging them through the new owner within 12 weeks does not reset the clock.
- Employees outside the Act: Construction industry workers covered by the portable scheme and teachers covered by the Education and Training Reform Act 2006 accrue under their own schemes, not the Act. Employees whose agreements give more favourable long service leave keep the better deal.
- Federal awards and agreements: If a federal award or enterprise agreement contains long service leave provisions for the employee, those provisions can displace the Act. Check the applicable award or agreement before relying on the Act's numbers.
- Payments in lieu are banned: You cannot pay an employee for long service leave while employment continues. Section 34 makes it an offence for both employer and employee to give or accept a payment in lieu, other than on termination or as permitted under a fair work instrument. The only cash-out in the ordinary course is the s 9 payment when employment ends.
- Termination after seven years: Once seven years' continuous service is complete, the full accrued entitlement is payable on the day employment ends whatever the reason, including dismissal for serious misconduct. The current s 9 contains no misconduct carve-out.
Confirming Your Figure With a Lawyer
The maths above is straightforward, but the inputs are not, and that is where an employment lawyer earns their fee. A practitioner can reconstruct continuous service across related entities, business sales, asset transfers and labour hire arrangements under s 11, and apply the continuity exceptions to unpaid leave, parental leave and casual gaps. Where hours or rates have changed over time, they can work out ordinary pay under the s 15 and s 16 rules. Before settlement on a business purchase, a lawyer can audit the vendor's long service leave records and price the accrued liability so it is reflected in the purchase price rather than discovered afterwards. If the Victorian wage inspectorate investigates an underpayment allegation, the Act's offences carry penalties of 12 penalty units per offence for individuals and 60 for companies, and legal advice at that point is not optional.
The Trap: Counting Years on the Books as Continuous Service
The number most employers quote is wrong for the same reason every time: they divide calendar years by the rate and ignore what the Act counts as continuous service. An employee can sit on your payroll for 10 years while 26 weeks of unpaid leave do not count. A casual can lose continuity through a 13-week gap that nobody thought to document. A business sale can quietly reset or preserve the clock depending on how it was structured. Before you quote a figure to an employee, a buyer or an inspector, reconstruct the actual continuous service rather than the years on the books.
The core rules to remember are these. The Long Service Leave Act 2018 (Vic) covers almost all Victorian employees. Entitlement begins at seven years' continuous employment with one employer. Leave accrues at 1/60th of continuous service, about 0.867 weeks per year, with no cap. Unpaid leave counts only up to 52 weeks. Casual and seasonal continuity has its own 12-week rules. A change of ownership carries the accrued liability across. And the only lawful cash-out is on termination. The calculation itself is easy. Getting the inputs right is the job.