Employer obligations for the building and construction industry long service payments scheme
Find out what your obligations are for the building and construction long service payments scheme if you are an employer in NSW, including what you need to do when you employ workers also eligible under the Long Service Leave Act.
About the scheme
As a statutory body of the NSW Government, Long Service Corporation (LSC) manages the long service payments scheme for the building and construction industry.
The portable long service payments scheme (the scheme) allows building and construction workers to receive long service benefits without having to work with the same employer for 10 years.
The scheme's benefits and requirements are defined by the Building and Construction Industry Long Service Payments Act 1986 (the Act).
The Act entitles eligible workers with 10 years of recorded service to the industry long service payments even if the worker:
- worked for multiple employers, or
- was a contractor, such as a self-employed worker.
Employer obligations
Employers with workers performing eligible building and construction work in NSW must:
- register with LSC as an employer
- inform LSC about who has worked for you during each financial year
- submit a service return each year
- keep records of service
- contact LSC before paying a worker long service entitlements.
This information is used to allocate service to workers.
Joining the scheme if you are a working director
You can join the scheme if you are performing eligible building work as a:
- working director, or
- family members of the owner/director.
You are not eligible to record service if you are performing:
- office work
- administration work.
A working director needs to register as an employer and record service for their workers, including themselves.
When you employ workers also eligible under the Long Service Leave Act 1955
The scheme does not override the obligations of the Long Service Leave Act 1955 (the 1955 Act) and does not have any direct relationship with entitlements to benefits under the 1955 Act. Workers eligible for an entitlement under both Acts can choose:
- to take paid leave through their employer, or
- a lump sum payment from LSC.
Employer reimbursement
As a registered building and construction employer under the Act, you may be entitled to reimbursement for a payment you make to a worker under the 1955 Act.
To be eligible for a reimbursement you must notify LSC prior to paying a long service entitlement to your worker.
Learn more about paying long service leave.
Workers must choose their entitlement
Workers eligible for benefits under both Acts must nominate whether to take payment from LSC or their employer. Both relevant Acts state that a worker can only receive one benefit for any period of work.
If a worker has been with the same employer for at least 10 years, they can receive a benefit from that employer. In certain circumstances, benefits may be available for shorter periods.
This must be a period of paid leave.
The employer must tell LSC of the intention to pay the worker before paying the entitlement to the worker.
Learn more about paying long service leave.
A worker can receive a long service payment directly from LSC which includes any service with their current employer. This means the employer has no further long service liability for that period of service for that worker. Depending on the circumstances, such periods could be 10 years or more and represent a saving to the employer.
In all cases, we will advise employers when we pay a long service payment to a current worker who has long standing employment with one employer.
Payments made by LSC are calculated:
- at the worker's applicable award rate of pay or,
- where a certified agreement is in place, at the worker's rate of pay under that agreement.
Payments made by LSC do not include:
- over award payments, or
- other informal arrangements to pay higher than the award or certified agreement rate.
Learn more about long service leave payments made by LSC.
Employers who stop trading
If you're an employer who has stopped trading, you must advise LSC so we can update our records. Employers will need to complete a final return.
Your workers will take certain steps to protect their long service entitlement if you:
- cease trading, or
- go into liquidation before long service records are lodged.
Free registration for eligible employers
The scheme is free to eligible employers. Learn more about: