Long Service Leave in NSW: A Practical Guide for Employees
Long service leave is one of the oldest entitlements in New South Wales, yet it remains one of the most misunderstood. Many employees are unsure when they qualify, how the entitlement is calculated, or whether they should receive a payout when their employment ends. Employers also get it wrong more often than people realise. This guide sets out the essentials for NSW workers, what long service leave is, how it accrues, and when you can claim it.
The Legal Framework
Long service leave in NSW is governed by the Long Service Leave Act 1955 (NSW). Despite its age, it still applies to most employees in the state, including full‑time, part‑time and casual workers.
In March 2026, NSW Industrial Relations released updated guidance to help employers and employees interpret the Act in modern workplaces. The guidance does not change the law, but it clarifies how long service leave should be calculated for workers with irregular hours, fluctuating pay, or casual service.
Your Core Entitlement
Under the Act, employees are entitled to:
Two months of paid long service leave after completing 10 years of continuous service (approximately 8.667 weeks).
One additional month (approximately 4.333 weeks) for every further five years of continuous service.
These entitlements apply regardless of whether the employee is full‑time, part‑time or casual.
What Counts as “Continuous Service”?
Continuous service does not mean uninterrupted work. The Act preserves continuity in a range of situations, including:
authorised leave (paid or unpaid)
periods of illness
certain transfers of business
Casual employees can also accrue long service leave if their work is regular and systematic. The 2026 guidance provides detailed direction on how to treat:
zero‑hour weeks
breaks between engagements
fluctuating rosters
This is particularly important for employees in industries where casual work is the norm.
Taking Long Service Leave
Once an employee reaches 10 years of service, they can request to take their long service leave.
Key points include:
Leave can be taken as a single block or in separate periods if the employer agrees.
Employers must not unreasonably refuse a request.
Disputes about leave can be escalated through NSW Industrial Relations.
Long Service Leave on Termination
This is where long service leave becomes especially significant — and where misunderstandings are common.
After 10 Years of Service
Employees with 10 or more years of continuous service are entitled to a payout of their accrued long service leave, no matter why the employment ends. This includes:
resignation
dismissal
redundancy
retirement
Between 5 and 10 Years: The Pro‑Rata Entitlement
Employees with at least 5 years but less than 10 years of service may be entitled to a pro‑rata payout, but only in specific circumstances:
the employee resigns due to illness or domestic pressing necessity
the employer terminates the employment (except for serious misconduct)
the employee dies
A voluntary resignation for ordinary reasons: career change, dissatisfaction, relocation by choice, does not attract a pro‑rata entitlement. Conversely, if the employer ends the employment (including through redundancy), the employee is entitled to a pro‑rata payout once they have reached five years.
What Is “Domestic Pressing Necessity”?
This term has been interpreted through case law. It generally refers to situations where an employee had no real choice but to resign, such as:
needing to care for a seriously ill family member
urgent family relocation due to a partner’s employment
other compelling personal circumstances
It does not include general workplace dissatisfaction or a desire for a new job.
How Long Service Leave Is Calculated
The calculation depends on the employee’s ordinary pay at the time the leave is taken or paid out.
For most employees, the process involves:
determining the total period of continuous service
calculating the entitlement in weeks
multiplying by the employee’s ordinary weekly rate
For employees with variable hours or fluctuating earnings, the 2026 guidance sets out a structured approach to ensure consistency and fairness.
Part‑time employees are paid at their ordinary part‑time rate, not a full‑time equivalent.
Portable Long Service Leave Schemes
While the standard NSW scheme ties entitlements to a single employer, some industries have portable long service leave, allowing workers to accrue service across multiple employers.
Portable schemes exist for:
building and construction
contract cleaning
community services (commenced 1 July 2025)
If you work in one of these sectors, your entitlements may differ significantly from the standard LSL Act.
If Your Employer Refuses to Pay
Long service leave is a statutory entitlement. If an employer fails to pay what is owed:
employees can lodge a complaint with NSW Industrial Relations, which has enforcement powers
unpaid entitlements can be pursued through legal proceedings
time limits apply, so delays can be costly
Key Points to Remember
Two months’ leave after 10 years; one month for each additional five.
Pro‑rata leave may be payable after five years in specific circumstances.
Casual employees can accrue long service leave if their work is regular and systematic.
Portable schemes apply in certain industries.
Updated 2026 guidance clarifies calculations for variable hours and pay.
Long service leave must be paid out on termination after 10 years, and sometimes earlier.
We Represent Employees
At Leonard Lawyers, we act for workers. If you believe your long service leave has been miscalculated or unpaid, or you’re unsure whether you qualify for a pro‑rata entitlement, we can help you understand your rights and the steps available to you.
