Portable long service leave scheme in the ACT expanded to include the hair and beauty industry

Home / HABA Blog / Portable long service leave scheme in the ACT expanded to include the hair and beauty industry

Posted June 5, 2023

The Long Service Leave (Portable Schemes) Amendment Act 2023 (the Amendment Act) will expand the ACT’s portable long service leave scheme (portable scheme) to include the hairdressing and beauty services industry. The expanded scheme will also include the accommodation and food services industry.

Background

Portable long service leave schemes in the ACT have been in place since 1981. Currently the portable scheme covers the building and construction industry, contract cleaning industry, community sector industry and security services industry. The portable scheme will be expanded to include a new ‘services industry scheme’ which will combine the hairdressing and beauty services industry and the accommodation and food services industry into the existing contract cleaning industry scheme.

Ai Group, on behalf of HABA, strongly opposed the expansion of the portable scheme arguing that the expansion was ill-conceived.

How is the hairdressing and beauty services industry defined?

The hairdressing and beauty services industry is defined by the Amendment Act which sets out a summary of the types of work covered under the hairdressing and beauty services industry including barbers, beauty services, electrolysis services, hairdressing services, make-up services, nail care services, skin care services and tanning services.

What obligations will employers have under the portable scheme?

Under the portable scheme, employers will be required to apply to the ACT Long Service Leave Authority (Authority) for registration.

Once registered, employers will be required to provide a quarterly return to the Authority. The quarterly return must include the following information:

• The name of each worker who carried out work during the period to which the return relates;
• The amount of ordinary remuneration paid or payable by the employer to each of the workers during the period; and
• The number of days, or part days, during the quarter to which the remuneration relates.

The quarterly return must also be accompanied by the payment of a levy based on a percentage of the ordinary remuneration paid or payable to each employee during the quarter. The amount of levy for each industry is determined by the Minister.

The levy for the new services industry scheme, which will include hairdressing and beauty services, has not yet been declared.

How will employees take long service leave under the portable scheme?

Currently, employees in the hairdressing and beauty services industry in the ACT must reach 7 years of service with a single employer before the employee is entitled to long service leave under the Long Service Leave Act 1976.

The expanded portable scheme means that employees will be entitled to long service leave once they reach 7 years of service in the industry, regardless of whether they were employed by a single or multiple employers in that period.

An employer is required to grant an employee long service leave within 6 months of the employee reaching the entitlement, unless agreement is reached between employer and employee to take long service leave later than 6 months from the date the employee reaches the entitlement.

An employee may apply to the Authority for payment relating to their long service leave. The Authority must pay the employee within 21 days provided the Authority is satisfied the employee is entitled to leave under the portable scheme.

Alternatively, an employee may elect to take long service leave under the Long Service Leave Act 1976, in which case the employer may seek reimbursement from the Authority for the amount paid to the employee for long service leave.

When will these changes be operative?

The provisions expanding the portable scheme to the hairdressing and beauty services industry will commence on 11 April 2025.

The 2-year transition period was established to allow time for employers and the Authority to prepare for the obligations arising from the expanded portable scheme.

What steps should employers take?

Employers with salons in the ACT should start reviewing and preparing for what will be required of them once the scheme takes effect.

Are there portable long service leave schemes that cover the hairdressing and beauty services industry in other states?

No, there are portable long service schemes in all the states and territories but at this stage, only the ACT has introduced a portable scheme for the hairdressing and beauty services industry.

HABA will keep employers informed of any developments in this area.

Further information

Some information about the expanded portable scheme is available on the ACT Government’s website: Home – The ACT Long Service Leave Authority

More detail is expected to be added over the 2-year transitional period.

HABA members can speak to a workplace adviser by calling the HABA Workplace Advice Line on 02 9221 9911