Victorians claw back $1.5 million in long service leave

Tuesday, 17 May 2022 at 10:00 pm

Short-changed Victorian workers have now clawed back $1.5 million in unpaid long service leave entitlements with the help of Wage Inspectorate Victoria. That's the equivalent of over 73,000 hours' or more than 9,000 days' leave, based on the minimum wage.

Over the last 4 years, almost 200 people were repaid an average of $7,929 each. There were underpayments across Melbourne and in regional Victoria.

In one case, two long-serving employees of an ASX-listed company recouped $65,000 and $44,000 respectively. In another, the Wage Inspectorate helped 12 childcare workers from the same employer secure $8,000 in long service leave entitlements.

Retail, hospitality and professional service businesses were the most likely to owe long service leave entitlements, accounting for over 40 per cent of all cases.   

Companies can face official warnings or prosecution for failing to meet long service leave obligations. Last year, Coles Supermarkets Australia Pty Ltd pleaded guilty to criminal charges filed by the Wage Inspectorate relating to underpayment of long service leave.

Most Victorian employees qualify for long service leave if they have worked continuously with one employer for at least 7 years. The leave accrues at a rate of one week for every 60 weeks of continuous service.

If an employee leaves after 7 years before the long service leave is taken, the employer must pay out the entitlement, which can exceed $10,000.

The milestone comes as the Wage Inspectorate launches a new public information campaign that aims to help businesses avoid long service leave "bill shock" by planning ahead.

The authority is encouraging employers to check their long service leave obligations and factor them into their budgets, so there's no costly surprise.  

Employers and employees can visit Wage Inspectorate Victoria for information on long service leave, including frequently asked questions and a long service leave calculator.

The Wage Inspectorate enforces Victoria's wage theft, long service leave, child employment and owner-driver laws, educating the community and taking action to enforce the law.  

Quotes attributable to Robert Hortle, Commissioner, Wage Inspectorate Victoria:

"It's disappointing these entitlements weren't honoured in the first instance, but Victorians can be assured there's a strong regulator enforcing the law and helping workers get the long service leave they're owed."

"We've helped workers recoup $1.5 million, but that doesn't tell the full story. It's hard to put a value on the 9,000 days of leave workers were initially denied. This is time that could have been spent with family, travelling or just relaxing."

"Long service leave can catch employers by surprise. Some don't realise casual and fixed term staff can qualify. Others buy a business without realising they may become responsible for existing long service leave. We're here to set the record straight."

"You have 7 years to plan for an employee's long service leave, so take that opportunity. Plan ahead and avoid long service leave bill shock."