Employer FAQs

The long service leave scheme is legislated under the Coal Mining Industry (Long Service Leave) Administration Act 1992 (the Act).

Employers of eligible employees have legal obligations to ensure those employees can access their long service leave entitlements when eligible to do so. Obligations include, for example:

• Submission of a monthly levy advice and payment for all eligible employees.
• An annual audit report, within six months of the end of the financial year.

In addition to matters such as eligibility and entitlement, the legislation addresses:

• How an employee applies and obtains approval for leave.
• The minimum amount of leave that an employee can take at one time.
• When an employer must pay for leave that is taken.

Non-compliance and breaches of the Act can lead to civil or criminal penalties against an employer and, in certain circumstances, its officers.

Coal LSL has the power to seek civil penalties up to the value of 300 penalty units*. Coal LSL can also require people to produce information or documents relating to the employment of an eligible employee or which Coal LSL needs to perform its functions.

Civil proceedings may also be brought by an employee, employee organisation or industrial association for breaches or potential breaches of the Act. The Court may order compensation, injunctions or other orders.

Fair Work Australia also has power to deal with certain disputes between an employer and an eligible employee in relation to leave.

*NB. Penalty units are defined by legislation under subsection 4AA(1A) of the Crimes Act 1914 (Cth) and are subject to change. Visit the ASIC website for more information.

Register

If you are a national system employer* and you employ people who fit the definition of ‘eligibility’, you are legally obligated to register your company with Coal LSL. More information and registration form.

*The definition of ‘employer’ in Coal LSL’s legislation refers only to a national system employer as defined in section 14 of the Fair Work Act 2009.

De-register

If your company is in the process of closing, going into liquidation or no longer operational, you need to de-register with Coal LSL. Please get in touch with us to facilitate that process and to learn what obligations you still have to fulfil under the legislation as part of your close-out processes.

An Authorised Contact is someone appointed by an employer organisation to liaise with Coal LSL about long service leave matters on behalf of the employer and their eligible employees.

These people are usually in payroll or HR roles. They can be authorised by Coal LSL’s Main Contact for your organisation.

We can accept documents for processing from a non-Authorised Contact at your organisation; however, documents must be signed by an Authorised Contact and we will only liaise with an Authorised Contact regarding a matter.

If someone in your team is not yet registered with Coal LSL as an Authorised Contact, the Main Contact for your organisation may make arrangements using the Update Authorised Contact Details form on our website, which can be downloaded from Employer Resources.

IMPORTANT: Online Services users must manage their organisation’s authorised contacts via platform; submitting changes by filling an Update Contact Details Form or via the Employer Portal is no longer necessary.

The portable long service leave scheme for employees in the black coal mining industry operates by imposing a levy on wages paid to eligible employees within the Australian black coal mining industry must make levy payments to Coal LSL. The payroll levy is payable monthly and does not come out of employees’ wages.

What makes up employees' eligible wages is defined in the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992.

The payroll levy rate of 2.7% applies to all eligible employee wages paid on or after 1 July 2023.

Levy rates through time

Goods and Services Tax (GST) is not applied to levy payments. Long service leave levies are neither goods nor services. Levies are not a taxable supply under the GST legislation, therefore, we do not issue tax invoices. Your Levy Advice forms, details of submission and proof of payment should be retained for record keeping purposes.

The legislation provides the minimum entitlements for long service leave, which are:

• If an employee takes leave while employed, they are entitled to be paid at an amount equal to their base rate of pay (including incentive-based payments and bonuses) that would have been payable had they been at work (i.e. not taken the leave).
• If an employee is paid out their accrued leave on cessation, they are entitled to be paid at a rate as if they had taken the leave immediately before they stopped being employed.
• The employment contract or enterprise agreement may provide an enhanced entitlement, as long as that entitlement is at least as favourable as our legislation.

Go to legislation.

• If an employee resigns or you terminate their employment, they may choose to keep their qualifying service and leave entitlement and be paid for that leave at a later date. If a person stops being an eligible employee and at that time they’re entitled to take leave, they can ask you to pay them for their leave not taken.
• If a person stops being an eligible employee because of ill health or retirement on or after age 60, and has any period of qualifying service, they can ask you to pay them for their leave.
• If a person is made redundant and at that time has at least six years' qualifying service, they can ask you to pay them for their leave. There is no longer a three-month waiting period.
• If a person dies and has qualifying service, their leave can be paid to their estate.

Briefly: When your employee takes long service leave you are required to pay them at a rate set by their contract of employment or industrial instrument. In addition, the amount you pay them cannot be less than their base rate of pay (including incentive-based payments and bonuses). The amount you are reimbursed is set by the Employer Reimbursement Rules 2017 and is the eligible wages rate per hour. When the amount required to be paid to the employee under your agreement with them is greater than the eligible wages rate per hour then the reimbursed amount will be less than the amount paid to the employee.

In more detail: The amount an employer is required to pay their employee for long service leave is primarily determined by the terms of the employee’s employment agreement or applicable industrial instrument.

The Coal Mining Industry (Long Service Leave) Administration Act 1992 (the Admin Act) – specifically Part 5A, division 1, 39AC (section 39AC) – advises the minimum amount that must be paid to the employee.

Section 39AC Payment for long service leave contemplates that the employee could be paid more than the minimum amount prescribed in that section:

‘(1) If an eligible employee takes a period of long service leave, the employer must pay the employee for the long service leave no less than an amount that is equal to the base rate of pay (including incentive-based payments and bonuses) that would have been payable to the employee during the period had the employee not taken the leave.

(3) In this section: (a) a reference to the base rate of pay payable to an employee is a reference to the employee’s base rate of pay before any amounts are deducted under a salary sacrifice arrangement; and (b) a reference to an incentive-based payment in relation to an employee is a reference to a payment of that kind that is paid to the employee at least once a month; and (c) a reference to a bonus in relation to an employee is a reference to a bonus that is paid to the employee at least once a month.’

If the terms of an employment agreement or applicable industrial instrument provide that the amount an employee is to be paid when long service leave is taken is greater than their base rate of pay (including incentive-based payments and bonuses), an employer would be required to pay their employee more than the minimum amount prescribed in section 39AC for their long service leave.

Rule 9 of the Reimbursement Rules provides for the payment of the reimbursement calculated by multiplying the hours of long service leave taken by the eligible wages amount per hour.

‘The reimbursable amount for a payment to an eligible employee is the amount worked out in accordance with the formula: LSL paid x eligible wages amount per hour’

‘LSL paid’ is defined in that Rule as: ‘LSL paid means the hours (including any part of an hour) of long service leave entitlement paid for by the employer in respect of an eligible employee, not exceeding the hours of long service leave entitlement (including any part of an hour) recorded by the Corporation with respect to that employee, immediately prior to the date of payment by the employer and not including any hours for which a reimbursement has already been made…’

Eligible wages amount per hour is also defined in Rule 9(1): ‘eligible wages amount per hour means the amount per hour of the employee's eligible wages: (a) if the employee is employed by the employer at the time the payment is made – immediately before he or she was paid for, or commenced to take, the long service leave, or (b) if the employee is not employed by the employer at the time the payment is made – immediately before he or she left their employment with that employer.’

The eligible wages amount per hour is in most cases the eligible wages amount used in the levy return form immediately before the leave is taken. If the amount to be paid to the employee when they take their long service leave is greater than the eligible wages amount per hour disclosed in the levy return form, this would result in you as the employer paying an employee while on their leave more than you will receive as a reimbursement from the Fund under Rule 9 of the Reimbursement Rules.

Related resources:

• List of Coal LSL governing legislation
• Coal LSL Admin Act 1992 section 39AC – Payment for long service leave
• Coal LSL Admin Act 1992 section 39EB – Industrial instruments (Part 5A, Division 5) – ‘This Part establishes minimum entitlements and rights in respect of long service leave for an eligible employee and is not intended to override entitlements or rights in respect of long service leave under an industrial instrument that covers the employee.’
• Employer Reimbursement Rules 2017 section 9 – How is the reimbursable amount for a payment to an eligible employee calculated?

The Employer Reimbursement Rules 2017 outline how Coal LSL calculates reimbursement amounts payable to employers under the Admin Act.

The current rules came into effect on 1 July 2017. Under these rules, on administration approval, an employer will be reimbursed at a rate equivalent to the eligible wages amount per hour which is generally the amount disclosed in the relevant levy return form immediately prior to the leave being taken. See Rule 9 for further details.

Please note: an employer is not able to claim a reimbursement for any amount greater than the amount actually paid to the employee. See sub-rule 9(2).

The changes to the legislation in 2012 are documented in the Coal Mining Industry (Long Service Leave) Administration Act 1992 (the Act).

The key changes were:

• Minimum leave entitlements for eligible employees are prescribed in the Act itself. These entitlements substantially mirror past award-based entitlements.
• Eligible employees accrue leave for their aggregate service rather than continuous service for all qualifying service after 1 January 2000. For service before 1 January 2000 only ‘continuous service’ counts.
• Leave accrues for qualifying service and is calculated in hours, not days or weeks.
• Coal LSL establishes for each eligible employee a notional account representing the leave levy paid by their employers after 1 January 2012 .
• Eligible employees must take a continuous period of at least 14 days when taking leave.
• Where an employee is made redundant and has more than six years’ but less than eight years’ qualifying service, the employee is immediately entitled to be paid leave. There is no longer a three-month waiting period.
• There are new definitions of eligible wages for the calculation of the leave levy.
• Transitional arrangements apply to convert eligible employees’ existing leave into hours for their qualifying service before 1 January 2012.
• Some employees and their employers can make waiver agreements under which, instead of accruing leave, the employee can be paid or salary sacrifice into super the amount of levy which the employer would otherwise pay for them. Waiver agreements must first be approved by Coal LSL.
• Coal LSL has stronger policing and enforcement powers to ensure that all employers of eligible employees comply with the Act.
• Breaches of the Act can lead to criminal or civil penalties.

Only the legal personal representative of the deceased may make leave accrual enquiries and lodge a claim through the deceased’s last known employer, in accordance with the legislation (Part 5A, Division 3, Section 39CC of the Administration Act 1992).

An employer must pay any unclaimed leave entitlement to the deceased’s legal personal representative within 30 days of a written request. Use the deceased employee Entitlement Application to initiate the process with Coal LSL. It is located under Employer Forms in the Employer Resources section of the website. A certified copy of the official Death Certificate must be provided with the application.

Once payment is made, you can claim reimbursement of the amount through the usual leave reimbursement process.