Victorian Long Service Leave: What Employers Need To Know

If you employ staff in Victoria, long service leave (LSL) isn’t a “nice to have” - it’s a legal entitlement under the Long Service Leave Act 2018 (Vic). Getting it right builds trust with your team and protects your business from penalties.

We’ll walk you through how Victorian long service leave works, how to calculate entitlements and pay rates, and what to do when employees request leave. We’ll also cover common edge cases like casuals, parental leave, and transfers of business so you can confidently manage LSL in real life, not just on paper.

The good news? With clear policies, clean records and the right processes in your payroll system, LSL compliance in Victoria is very manageable - and we’re here to help you set it up properly.

What Is Long Service Leave In Victoria?

Long service leave is paid leave that employees earn for continuous service with the same employer. In Victoria, employees start accruing LSL from their first day of work, including most casuals and part-time staff.

Under Victoria’s law, an employee’s entitlement is 1/60th of their total period of continuous employment. Put simply, that’s about 0.8667 weeks for each year of service. Practically, an employee becomes entitled to take LSL after 7 years of continuous employment (they don’t need to wait until 10 years).

Here’s what that looks like in typical milestones:

• After 7 years: The employee can take LSL (pro-rata) and is also entitled to a pro-rata payout if their employment ends.
• After 10 years: The entitlement continues to grow - for example, around 8.67 weeks at 10 years - and keeps accruing over time.

If you’d like a simple way to estimate entitlements, a long service leave calculator can help you sanity check your numbers before you finalise payroll. For context on later milestones, this 10-year LSL guide for Victoria explains how entitlements keep building.

How Do You Calculate LSL In Victoria?

There are two parts to any Victorian LSL calculation: the amount of leave (time) and the rate of pay (money).

1) Calculate The Time Entitlement

Use the 1/60th formula. Take the employee’s total period of continuous employment (in weeks) and divide by 60. That’s the weeks of LSL they’ve accrued.

For example, at 7 years (approximately 364 weeks), the entitlement is about 6.07 weeks. At 10 years (about 520 weeks), it’s around 8.67 weeks. Keep in mind, LSL continues to accrue beyond these milestones while employment continues.

Continuous employment usually includes paid leave and many absences, and it is not broken by things like authorised unpaid leave or certain parental leave periods. Some absences won’t count towards service, but won’t break it either. If you’re unsure whether a specific gap counts, get advice before you calculate.

2) Work Out The Rate Of Pay

In Victoria, LSL is paid at the employee’s “ordinary pay” when the leave is taken. This generally excludes overtime but includes the usual loadings and allowances that form part of ordinary pay.

For employees with varying hours or pay patterns, you calculate the “normal weekly number of hours” using an average. To protect employees whose hours have fluctuated, the Act uses the greatest of these averages:

• Average weekly hours over the last 12 months; or
• Average weekly hours over the last 5 years; or
• Average weekly hours over the full period of continuous employment.

Use the highest result to determine the paid hours for each week of LSL. Multiply that by the current ordinary rate at the time the leave is taken (or at termination, if you’re paying out unused LSL).

3) Double-Check With A Calculator And Your Records

Victoria-specific rules can feel technical, so it’s smart to cross-check your math with a reliable tool such as a long service leave calculator and ensure your employment records clearly show start dates, breaks, and variations in hours. The cleaner your records, the smoother each calculation will be.

When Can Employees Take LSL In Victoria?

Employees can request LSL once they hit 7 years of continuous employment. Here’s what you need to manage in practice:

• Notice: The employee should give at least 12 weeks’ written notice before taking LSL. You can agree to a shorter notice period if it suits your operations.
• Direction by employer: You can direct an employee to take LSL by giving at least 12 weeks’ written notice, provided it’s reasonable based on business needs and the employee’s circumstances.
• How leave is taken: LSL can be taken in one continuous period or by agreement in smaller blocks. In Victoria, it can be taken in periods as short as one day (which can help you and your employee plan around peak times).
• Cashing out: Generally, LSL isn’t cashed out while employment continues. Unused LSL is paid out on termination.

If your business needs to balance multiple leave requests or manage rosters around holidays and peak demand, put your process in writing and apply it consistently. A clear policy prevents disputes and helps set expectations well in advance.

Special Scenarios Employers Often Ask About

Casual Employees

Casuals in Victoria can be entitled to LSL if they have continuous employment (regular and systematic hours) over time. Regularity matters more than fixed hours. If a casual has long gaps without engagement, check whether continuity has been broken before you make the call.

Parental Leave And Other Absences

Parental leave and certain unpaid absences won’t necessarily break continuity of employment, although some time may not count towards accrual. Paid leave generally counts. Always verify how a specific absence impacts accrual and continuity so your calculation holds up.

Transfer Of Business

When you buy or sell a business, employees often transfer to the new employer. In many cases, their service is taken to be continuous for LSL purposes, meaning the new employer inherits the service history. Make sure your sale terms, due diligence and payroll setup reflect this. For a broader overview of handling accrued entitlements in these scenarios, see transferring long service leave.

Resignations, Redundancies Or Dismissals

When employment ends, pay any unused LSL that the employee is entitled to. Remember: once an employee hits 7 years, pro-rata payout applies on termination in Victoria. You’ll also need to finalise other entitlements correctly - this guide to calculating final pay can help you map the overall process.

Portable LSL In Certain Industries

Some Victorian industries have separate portable long service leave schemes (for example, construction and certain community services). If your business operates in a covered industry, different rules about accrual and funding may apply. Check the scheme for your industry and ensure your payroll processes match those requirements.

Set Your Business Up For LSL Compliance

LSL works best when it’s part of your everyday HR and payroll processes, not an afterthought. Building it into your employment documents, policies and systems means fewer surprises and cleaner audits.

1) Bake LSL Into Employment Documents

• Employment Contracts: Include clauses about LSL accrual, requests, and notice expectations in your Employment Contract so everyone understands the process from day one.
• Staff Policies: Spell out who to notify, lead times, how requests are prioritised and how you’ll manage overlapping leave in your Staff Handbook or leave policy. Clear rules reduce friction during busy periods.

2) Record-Keeping You’ll Actually Use

Accurate records are your best defence against disputes. Keep a definitive record of:

• Start dates and service history (including any transfers of business)
• Employment status changes (casual to part-time/full-time)
• Leave periods (paid and unpaid) and whether they count toward accrual
• Hours patterns and changes (to calculate the “normal weekly number of hours” for variable roles)
• Pay rates and allowances that form part of ordinary pay

While many laws require you to keep records for set periods, LSL can span many years. It’s smart to keep historical data securely accessible for the full length of service so you can evidence your calculations whenever needed.

3) Payroll Settings And Routine Checks

Make sure your payroll system is set up to accrue Victorian LSL correctly. Test how it handles variable hours, promotions, and different pay types. Schedule a periodic review (for example, quarterly or biannually) to sample-check calculations against the law and your policies - especially for long-tenured staff whose entitlements are significant.

4) Plan For Busy Periods

Leave requests will come at inconvenient times if you don’t plan ahead. Forecast peak periods for your business and communicate black-out dates early (if appropriate and lawful) so staff can plan their LSL around those windows. If you need to direct an employee to take LSL, remember the 12 weeks’ notice requirement and keep your approach reasonable and consistent.

5) Know The Interaction With Rostering And Other Leave

LSL is separate from annual leave, personal leave and TOIL. If you’re coordinating multiple leave types and juggling rosters, make sure your team understands the differences and that your systems capture each category distinctly. If rostering is a pain point, revisit your processes against the legal requirements for employee rostering to avoid accidental breaches elsewhere.

Frequently Asked Questions About Victorian LSL (For Employers)

How long is long service leave in Victoria?

Employees accrue LSL at 1/60th of their total period of continuous employment. At around 7 years, that’s roughly 6.07 weeks. At 10 years, it’s about 8.67 weeks - and accrual continues after that.

Do casual employees get LSL in Victoria?

Yes, most casuals accrue LSL if they have regular and systematic employment over time. Continuity (not fixed hours) is the key consideration.

When can an employee take LSL?

From 7 years of continuous employment, employees can request to take LSL. They should give at least 12 weeks’ written notice unless you agree to a shorter period.

Can you refuse or change an LSL request?

You can negotiate timing and, if needed, direct an employee to take LSL with 12 weeks’ notice, provided it is reasonable. The aim is a fair balance between employee entitlements and your business needs.

What happens to LSL when someone leaves?

In Victoria, unused LSL is paid out on termination once the employee has reached 7 years of continuous service. Make sure you include it when you finalise termination payments alongside other entitlements outlined in your processes for final pay.

How do transfers of business affect LSL?

Often, an employee’s service is treated as continuous when a business changes hands, so the new employer inherits the service history for LSL. This should be identified and accounted for during due diligence and reflected in payroll on day one - see our overview on transferring long service leave.

Key Takeaways

• Victorian long service leave accrues from day one at 1/60th of total continuous employment; employees can take LSL from 7 years.
• For variable hours, use the greatest average of 12 months, 5 years, or the entire service period to determine paid hours for LSL.
• Employees should give 12 weeks’ notice to take LSL; employers can direct LSL with 12 weeks’ notice where reasonable.
• Document your rules in an Employment Contract and a clear Staff Handbook to manage requests consistently and reduce disputes.
• When employment ends after 7 years, unused LSL must be paid out; align this with your process for final pay.
• Transfers of business and portable LSL schemes can change how entitlements are handled - factor these in during due diligence and payroll setup.
• Clean records and routine payroll checks, supported by a reliable LSL calculator, make Victorian LSL compliance straightforward.

If you’d like a consultation about managing Victorian long service leave in your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.