Here’s a summary of where each state and territory stands on the issue of ‘cashing out’ long service leave.
New South Wales
In NSW, most workers derive their entitlement from the Long Service Leave Act 1955 (NSW). The NSW legislation does not contain any provisions that allow an employee to be paid for their LSL without actually taking some time off. For this reason, cashing out LSL in NSW is prohibited, regardless of the fact that it may be to an employee’s benefit.
In Victoria, most employees derive their entitlement from the Long Service Leave 2018 (VIC). Going farther than NSW, it constitutes an offence under the law in Victoria for an employee to ‘cash out’ their LSL. Employers and employees who do so may be subject to civil and criminal penalties.
Australian Capital Territory (ACT)
In the ACT, the Long Service Leave Act 1976 (ACT) provides employees with their entitlement to LSL. An employee must actually take the period as leave and may not receive a payment in lieu. In other words, employees in the ACT cannot cash out their LSL.