Who must pay long service leave under the LSL Act 2018 (Vic)?
The applicability test for Pay long service leave under the LSL Act 2018 (Vic), computed across 35 industries, 9 business structures and 6 size bands.
Short answer: Some businesses
Applies when the business has employees.
What the obligation is
VIC employees accrue LSL after 7 years continuous service — paid on entitlement or termination.
The Long Service Leave Act 2018 (Vic) gives most Victorian workers long service leave once they have worked continuously for one employer for at least 7 years. Leave accrues at one week for every 60 weeks of continuous service (about 0.866 of a week a year). After 7 years an employee may take the leave, and when employment ends for any reason, including resignation, dismissal, redundancy or death, the employer must pay out the full accrued balance on the last day. Contract terms that give less than the Act are invalid, and cashing out leave while employment continues is generally an offence. Workforce Inspectorate Victoria (known as Wage Inspectorate Victoria until 12 December 2025) investigates and prosecutes breaches.
The applicability test
Applies when the business has employees.
How the regulator frames it: Employers of Victorian employees, covering full-time, part-time, casual, seasonal and fixed-term staff. Casual and seasonal service stays continuous unless a gap between engagements exceeds 12 weeks (with exceptions, such as up to 104 weeks of parental leave or a regular and systematic engagement). Some industries are covered by portable schemes instead.
What triggers it: An employee reaching 7 years of continuous employment with the business, including service with a previous owner where the business changed hands and employment continued.
Jurisdiction: Victoria law only. A business with no operations in VIC is outside it, whatever the rest of the test says.
Which industries are in or out
Outcome across the 35 industries Rules Mate maps (35 of 35: depends on size or structure).
The answer is the same in every industry: depends on size or structure. Industry does not change who must comply.
Business structure and size
Structure does not change the answer across all industries: for every structure the answer is "depends on size or structure".
| Size band | Answer across all industries, any structure |
|---|---|
| No employees (turnover $100K–$1M) | No |
| 1–5 employees (turnover $100K–$1M) | Yes |
| 6–19 employees (turnover $1M–$3M) | Yes |
| 20–99 employees (turnover $3M–$10M) | Yes |
| 100–499 employees (turnover $10M–$100M) | Yes |
| 500+ employees (turnover $100M–$1B) | Yes |
Worked examples
Each line is one run of the Rules Mate applicability engine for a single business profile, with the reason the engine gives:
- Pty Ltd company in real estate agents with 6–19 employees, turnover $1M–$3M: applies. You have employees (6–19)
- Pty Ltd company in real estate agents with no employees, turnover $100K–$1M: does not apply. Requires employees.
What you must do, and when
- When due
- Leave may be taken after 7 years, on agreement or on at least 12 weeks' written direction from the employer. On termination after 7 years, payment of the full accrued entitlement is due on the day employment ends.
- Frequency
- When a triggering event occurs
- Evidence to keep
- Long service leave records for every employee (start date, service, absences, leave taken and paid), which must be provided to current or former employees on request; timesheets or hours records for casual and seasonal staff; written directions to take leave; final-pay calculations showing weeks of service divided by 60.
- Status
- Current
- Priority
- High
Penalty for not complying
Maximum penalty: Failing to pay the full accrued entitlement on the day employment ends is an offence carrying 12 penalty units for a natural person and 60 penalty units for a body corporate, for each day the offence continues, and a criminal conviction may be recorded. Paying out leave instead of letting it be taken is also an offence for both employer and employee.
Audit or assurance level
Rules Mate has not yet classified the audit or assurance level for this obligation. Any audit, review or certification requirement is set by the regulator source listed below.
Obligations with the same applicability test
If this obligation applies to you, so do these 2: the engine uses the same rule for each.
Where it sits in the corpus
Rules Mate tracks 5 published obligations tagged "lsl", 0 of them rated critical. For a professional services Pty Ltd company with 6–19 employees operating in every state, 3 of those apply outright. This obligation is rated high priority, and is triggered by events.
Regulator, legislation and tools
Free tools that help with this obligation:
Questions
- Who must pay long service leave under the LSL Act 2018 (Vic)?
- Applies when the business has employees.
- Do sole traders need to pay long service leave under the LSL Act 2018 (Vic)?
- Depends on size or structure. Across every industry and every size band, the engine's answer for a sole trader is: depends on size or structure.
- Do businesses with 1–5 employees need to pay long service leave under the LSL Act 2018 (Vic)?
- Yes (1–5 employees, turnover $100K–$1M).
- When is "Pay long service leave under the LSL Act 2018 (Vic)" due?
- Leave may be taken after 7 years, on agreement or on at least 12 weeks' written direction from the employer. On termination after 7 years, payment of the full accrued entitlement is due on the day employment ends.
Related
Sources
Computed by the Rules Mate applicability engine from the published obligation corpus; facts last checked 3 October 2026. Rules Mate is not a law firm and this is general information, not legal advice. Confirm your position with the regulator source or a qualified adviser before acting.