By Charles Power
If you have a number of employees who have accrued large amounts of long service leave, it can be a huge liability for your business.
Why? Because the more accrued liability builds up, the more it can cause your business to have significant cash flow problems. But you can take steps to reduce this liability – by directing your employees to take long service leave.
However, if you decide to go down this path, there are a number of guidelines you must abide by.
For starters, depending on which state your business operates in, employers must give an employee at least the following amount of notice of the date from which the leave will be taken:
- NSW: 1 month;
- VIC: 3 months;
- QLD: 3 months; and
- WA: 1 month.
By giving an employee the requisite period of notice, you can either:
- direct them to take all of their long service leave in one continuous period as soon as practical for your business; or
- agree with them that they should take it at a later date.
Alternatively, if you wish, you can agree with your employee that they take their long service leave:
- in two separate periods (if their accrued leave entitlement is 2 months);
- in two or three separate periods (if their accrued leave entitlement exceeds 2 months and does not exceed 19 ½ weeks); or
- in two, three or four separate periods (if their accrued leave entitlement exceeds 19 1/2 weeks).
For more information on your long service leave responsibilities, check out chapter L6 Long Service Leave in your copy of the Employment Law Practical Handbook.