By Natasha Silveira | 1 October 2026 | 9 min read
Long service leave in Victoria comes down to records. See what the Act requires you to keep, how continuity and pay are worked out, and what goes missing.
KEY TAKEAWAYS
- Victorian employers must keep LSL records for the whole employment and seven years after.
- Records must prove continuity, ordinary pay, leave taken and any change of business owner.
- If hours changed in the last 104 weeks, pay is averaged and the highest average wins.
- After seven years, unused LSL must be paid on the day employment ends.
- Missing start dates and hours history are where most claims go wrong.
A warehouse supervisor resigns after 11 years. Under the rules for long service leave in Victoria, her payout is due on her last day. Payroll opens her file and finds three different start dates, a gap in 2019 nobody can explain, and no record of the hours she dropped after parental leave.
That’s the real risk with long service leave. The maths is simple. Proving the inputs a decade later is not.
This guide covers what the Victorian law expects you to record, how each piece feeds the calculation, and the records that most often go missing.
What your LSL records must be able to prove
Workforce Inspectorate Victoria expects records that demonstrate these four things.
1
Continuity
Start date, every break in service, and why each gap happened.
2
Ordinary pay
Hours and pay history detailed enough to run the averaging rules.
3
Leave taken
Every period of leave, paid or unpaid, including LSL already used.
4
Ownership changes
Any sale or transfer of the business, with the date it happened.
Source: Workforce Inspectorate Victoria, Comprehensive Guide to the Long Service Leave Act 2018
What long service leave law in Victoria requires you to record
The Long Service Leave Act 2018 (Vic) requires you to keep accurate long service leave records for each employee’s entire employment. You must then keep them for at least seven years after the job ends.
The Act defines a record broadly, covering any register, notice, pay sheet or other document relating to the entitlement. According to the Workforce Inspectorate Victoria guide, your records should show:
- How ordinary pay was calculated.
- Continuity of employment, including any gaps.
- Any change in business ownership.
- Every period of leave taken, including long service leave.
You can’t refuse an employee, their personal representative or an authorised officer who asks for the record. Failing to keep records, refusing a request or making a false entry are each offences carrying up to 60 penalty units for a company.
This isn’t a paper exercise. The regulator charged Woolworths with failing to pay more than $960,000 in long service leave to 1,199 former employees, and the case turned on hours and leave data. Staff are also staying put. The ABS found just 7.2% of employed people changed employer in the year to February 2026, so more of your team will reach seven years.
How continuous employment is calculated
Long service leave depends on continuous employment with one employer. Get continuity wrong and every other number is wrong too.
Parental leave and other unpaid leave :
For absences from 1 November 2018:
- Paid leave of any kind counts towards service.
- Unpaid leave, including unpaid parental leave, counts for up to 52 weeks.
- Unpaid leave beyond 52 weeks generally doesn’t count, unless a contract or instrument says it does, or it’s because of illness or injury.
- Absence through illness or injury, paid or unpaid, counts.
No amount of parental leave breaks continuity. Leave beyond 52 weeks can also count if you agree to that in writing. Absences before 1 November 2018 follow the old rules, where unpaid parental leave didn’t count at all. Record the type, start date and end date of every unpaid absence, or you can’t apply these rules later.
Casual, seasonal and fixed-term employees
Casuals and seasonal workers accrue long service leave too. Their service stays continuous if no gap between engagements exceeds 12 weeks. A longer gap still won’t break it if you agreed beforehand, if seasonal factors caused it, or if the work was regular and systematic with a reasonable expectation of re-engagement.
A fixed-term employee re-employed within 12 weeks of a contract ending also keeps continuous service.
Absences that count towards LSL vs absences that don't
Counts towards service
Paid leave - Annual leave, personal leave and paid parental leave all count.
Unpaid leave up to 52 weeks - Including unpaid parental leave taken from 1 November 2018.
Illness or injury - Paid or unpaid absence for these reasons counts, including WorkCover.
Longer leave agreed in writing - Or provided for in the contract or a fair work instrument.
Doesn't count, but needn't break continuity
Unpaid leave beyond 52 weeks - Unless a contract, instrument or written agreement says otherwise.
Gaps before re-employment - Time between jobs when re-hired within 12 weeks.
Pre-2018 unpaid parental leave - Absences before 1 November 2018 follow the old rules.
Casual gaps over 12 weeks - Unless agreed, seasonal, or the work was regular and systematic.
When long service leave accrues and becomes accessible
Leave accrues at one week for every 60 weeks of continuous employment, about 0.866 of a week a year. After seven years, an employee can take their accrued leave, roughly 6.07 weeks at that point.
They can take it in blocks as short as one day. You must grant a request as soon as practicable unless you have reasonable business grounds to refuse. You can agree to leave at half pay for double the time, but never double pay for half the time. You can also agree to leave in advance, or direct someone to take leave with at least 12 weeks’ written notice. Put every one of these agreements in writing, because each one changes the balance you’ll need to prove later.
Victorian long service leave by the numbers
7 years
Continuous employment before leave can be taken or paid out
0.866
Weeks of leave accrued for each year of service
52 weeks
Unpaid leave, including parental leave, that counts as service
7 years
Minimum time to keep records after employment ends
Source: Workforce Inspectorate Victoria, Long Service Leave Act 2018 (Vic)
Calculating the payment rate when hours or pay have changed
Leave is paid at the employee’s ordinary pay for their normal weekly hours at the time they take it or leave. Ordinary pay usually excludes allowances, penalty rates and occasional overtime. A casual’s ordinary pay does include the casual loading.
The trap is changed hours. If ordinary hours changed in the 104 weeks before leave starts, you average them over the last 52 weeks, the last 260 weeks and the entire period of employment. The highest average applies. The same averaging applies when hours simply vary week to week, which covers most casuals. Weeks of unpaid leave come out of the divisor, and paid leave hours go in.
Pay that isn’t fixed, such as commission, works the same way, using average weekly earnings across the same three windows. Without hours history going back to the start date, you can’t run the third test, and that’s usually the one that wins.
What happens on termination
Once an employee has seven years’ continuous service, any accrued and untaken leave must be paid on the day employment ends. That applies whether they resign, are dismissed, are made redundant or die, in which case payment goes to their personal representative. Deduct any leave already taken or paid.
Late payment is a criminal offence, and the penalty applies for each day it stays unpaid. In one 2026 case the regulator noted the maximum penalty was over $11,500 per day. Before seven years, there’s no payout under the Act. Cashing out leave during employment is generally prohibited.
Transfer of business provisions
When a business is sold or transferred and an employee stays on, their service carries across. The new owner becomes liable for long service leave for the employee’s whole period at that business, not just the time since settlement.
Service is also continuous if the old owner dismisses someone and the new owner re-employs them within 12 weeks for the same or substantially the same work. A sale contract can adjust the price for this liability, but it can’t reduce the employee’s entitlement. If you’re buying, get the seller’s leave and hours records before settlement. You inherit the liability whether or not you inherit the paperwork.
The records that go missing when a claim is made
Most disputes aren’t about the law. They’re about evidence that’s ten years old. These are the records we see go missing most often:
- The true start date, including earlier casual stints or work for a related entity.
- Hours history before a payroll system change, often lost in a migration.
- Dates and types of unpaid leave, especially parental leave before November 2018.
- Written agreements for half-pay leave, leave in advance or extended parental leave.
- The seller’s records from a business you bought.
Each gap tends to be resolved in the employee’s favour, because you can’t prove otherwise.
Not sure your LSL records would hold up?
VeiraMal can check your start dates, leave history and hours data now, while the gaps are still fixable.
Book Your Free Discovery CallQuick scorecard: are your LSL records claim-ready?
Tick every item that applies to your business.
Getting your long service leave records in order
Start with your longest-serving staff, because their claims are closest and their records are oldest. Confirm each start date, rebuild any missing hours history from old payroll exports, and log every unpaid absence by type. Then set a retention rule that keeps former employees’ files for at least seven years.
Our payroll services team can rebuild hours history and run the averaging tests. Our HR outsourcing team in Melbourne can set up the record-keeping process so it holds up long term. For a quick read on your position, email info@veiramal.com or send a message through the contact form. Our guide to HR documents every Australian business must have covers the rest of the file.
How VeiraMal Works
1
Discovery Call
A free conversation about your workforce and where the LSL risk sits.
2
Threshold Review
Start dates, leave history and hours data checked against the Victorian Act.
3
Ongoing Support
Payroll and HR support when an employee asks about their balance.
A four-step LSL records audit
Work through these in order, starting with your longest-serving staff.
1
Confirm coverage
Check whether the Act, a portable scheme or an older agreement applies.
2
Fix start dates and gaps
Include earlier engagements, related entities and every unpaid absence.
3
Rebuild hours history
Enough to run the 52 week, 260 week and full-period averages.
4
Set your retention rule
Keep each file for the whole employment plus seven years.
Long service leave Victoria FAQs
Do casual employees get long service leave in Victoria?
Yes. Casual and seasonal employees accrue long service leave if their employment is continuous. Service stays continuous when no gap between engagements exceeds 12 weeks, or a longer gap was agreed, seasonal, or the work was regular and systematic. Their ordinary pay includes the casual loading, and varying hours are averaged.
Does parental leave count towards long service leave in Victoria?
Parental leave never breaks continuous employment. Paid parental leave counts as service, and unpaid parental leave counts for up to 52 weeks. Longer periods count if a contract, instrument or written agreement provides for it. Unpaid parental leave before 1 November 2018 doesn't count towards service.
How long must employers keep long service leave records in Victoria?
For the whole period of employment, then at least seven years after it ends. The records must show how ordinary pay was calculated, continuity including gaps, any change of business owner, and leave taken. You must provide them to the employee or their representative on request.
Can long service leave be cashed out in Victoria?
Generally no. Paying long service leave instead of the employee taking the break is an offence for both parties, with limited exceptions under some fair work instruments. Unused leave is paid out when employment ends after seven years. Taking leave at half pay for double the time is allowed by agreement.
What happens to long service leave when a business is sold?
If the employee stays on, their service carries over and the new owner is liable for their whole period at the business. The same applies if the new owner re-employs them within 12 weeks to do substantially the same work. A sale contract can't reduce the entitlement, so buyers should get the seller's records.
Long service leave claim coming? Get the records right first
VeiraMal reviews your headcount, contracts, policies and termination process against the obligations that actually apply to your size. Businesses in Melbourne, Sydney and Hobart.
Book Your Free Discovery Call
Melbourne: Level 2, 480 Collins Street, VIC 3000
Sydney: Level 26, 44 Market Street, NSW 2000
Hobart: Level 6, Reserve Bank Building, 111 Macquarie Street, TAS 7000
info@veiramal.com
