Building and Construction Industry Long Service Payments Act 1986 (New South Wales) — Zoe

New South Wales act

Building and Construction Industry Long Service Payments Act 1986

In ForceNSW

Jurisdiction

New South Wales

Act Number

19 of 1986

Collection

act

Plain English Summary

8/10 complexity

What this law does, who it affects, and how it works

This Act sets up a system for recognising and paying "long service" benefits to people who do building and construction work in New South Wales, funded by levies on building projects and administered by a statutory body called the Corporation (the Long Service Corporation). It creates (a) a register of workers and a method to record "service credits" for time spent on building work; (b) rules for when and how a worker or an employer can claim or be paid a long service payment or long service benefit; (c) a levy on the cost of erecting buildings to fund those payments; and (d) administrative, compliance and enforcement powers for the Corporation and an advisory/appeal Committee. (See Parts 3–5; Committee in s 8; register duties in s 15; payments in Part 4; levies in Part 5.)

Mechanics — step by step, in simple terms

Who keeps the records and decides entitlements: the Long Service Corporation keeps the register of workers and decides registration, credits, payments and levy administration (s 15; s 17; s 29; Part 5). The Building and Construction Industry Long Service Payments Committee provides advice and determines appeals (s 9; Part 6; Schedule 1).
How workers get credited: workers are registered and credited with days of service in the register; full-time employment for a whole financial year is 220 days (s 15; s 22). Subcontractors claim service credits by lodging a verified claim (s 21). Other circumstances (illness, training, emergency volunteering, light duties) can also give credited days if approved by the Corporation (s 23).

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What it does

The Building and Construction Industry Long Service Payments Act 1986 establishes a portable long service leave scheme for workers employed or engaged in the building and construction industry in New South Wales. Its central purpose is to provide long service payments to workers who accumulate sufficient service credits in that industry, irrespective of how many employers they have worked for over time. The scheme is funded primarily by a long service levy imposed on the cost of erecting buildings in the State, capped at 0.6 per cent of that cost (s 35). The levy is payable before building work commences (s 36) and is collected by the Long Service Corporation, the body corporate established under the Long Service Corporation Act 2010 (s 3 definition of Corporation). The Corporation maintains a register of workers (s 15) and credits each registered worker with days of service based on certificates of service from employers or claims for service credits from subcontract workers. A worker becomes entitled to a long service payment when they have completed 10 years of service as a worker (s 28(1)(a)), or 5 years of service if they have permanently ceased building and construction work (s 28(1)(c)), or 55 days of service if they have reached the prescribed retiring age (s 28(1)(d)), or 55 days if they are totally and permanently incapacitated (s 28(1)(e)). A further payment becomes available after each subsequent 5-year block of service (s 28(1)(f) and (g)). The personal representative of a deceased worker may also apply (s 28(2)). The Act also contains machinery for reciprocal arrangements with other States and Territories, so that service in a reciprocating jurisdiction can count towards an entitlement (s 55, s 32A). Payments to employers are authorised where the employer has provided long service leave benefits that duplicate the scheme’s entitlements (s 32). The Act also establishes the Building and Construction Industry Long Service Payments Committee, an 11-member body that advises the Corporation and hears certain appeals (s 8, s 9, Part 6). Overall, the Act creates a self-funding, industry-specific long service scheme separate from the general long service leave regime under the Long Service Leave Act 1955.

Current sections

Direct links to the current provisions in Building and Construction Industry Long Service Payments Act 1986.

Official source available

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Sourced from legislation.nsw.gov.au, CC BY 4.0.

Purpose-claim (expressed by the structure of the Act): to provide a scheme ensuring that building and construction workers receive long service payments while funding those payments from a levy on building projects (Parts 4 and 5). The mechanism is: (a) collect levies from building projects (s 35–37), (b) record worker service and determine entitlements (Part 3), and (c) make payments from the Fund (s 29; Fund defined in s 3).
Costs and who pays (mechanical): levy payers (generally developers/owners or certificate holders under s 37) fund the scheme through levies (s 35, s 37). Employers also bear administrative costs (keeping records, lodging certificates under s 20; notification under s 16A). Subcontractors must keep records and make claims to obtain service credits (s 21; s 56).
Incentives and trade-offs: the levy raises the cost of erecting a building (a percentage of construction cost — s 35). Employers can choose to provide an alternative scheme and, if they do, may be reimbursed under a statutory formula (s 31–32); this substitutes a private/firm-level cost for the sector-wide levy. The Act gives the Corporation discretion to determine award-equivalent pay rates (s 29(3)(b)), which affects payment amounts and therefore the Fund’s outgoings. Regulations can cap or floor the pay parameter P (s 32B), which can lower payments to workers while reducing Fund outgoings (s 32B(1)–(4)).
Compliance burden and administrative discretion: the Act imposes recordkeeping and reporting duties on employers and subcontractors (s 20; s 21; s 56), with penalties for non-compliance (s 20(1) penalty; s 39). The Corporation has broad discretion to register workers, fix retrospective dates of registration in limited cases (s 17; s 18), to accept or extend late claims (s 20(2); s 21(3)), to determine pay rates where awards do not directly apply (s 29(3)(b)), to assess building costs (s 40) and to waive interest in special circumstances (s 46(3)). Those discretions concentrate significant administrative power in the Corporation and give rise to case-by-case decision-making (see s 15; s 29; s 40; s 46).
Appeal and review: many decisions of the Corporation can be appealed to the Committee (registration, credits, levy assessments, interest directions — Part 6: ss 49–54). The Committee’s composition is set out in s 8 and Schedule 1 (including nomination rights for unions and employer organisations in s 8(2)(b),(c)). Appeals are final decisions of the Corporation (s 54(4)).
Effects on private contracting and competition: the levy increases developer/project costs (s 35); employers can instead provide alternative benefits but then must notify and may be reimbursed only to a formula (s 31–32). Subcontractors who do not register or keep records risk losing credits, which alters the incentives around how contractors classify workers and structure contracts (s 17; s 21; s 56; s 19).
Concentrated benefits, diffuse costs and substitution: the principal beneficiaries are registered workers who meet credit and eligibility rules (s 28). The costs are borne by the people liable to pay levies (developers/owners/certificate-holders under s 37), and by employers for compliance. Employers who can provide an alternative scheme may internalise costs (s 31–32), substituting a firm-level expense for the sector-level levy.
Implementation and operational points: the Act allows the Corporation to appoint authorised agents to collect levies (s 44), to enter premises and compel production of documents (s 58), to share information with other agencies under arrangements (s 58AB), and to authenticate and rely on certificates signed by the CEO (s 45; s 60). These operational powers are central to administering levies and credits.

Main concepts

The Act defines several core concepts that determine who is covered and how entitlements arise.

Building and construction industry is defined exhaustively in s 3(1) by reference to a list of structures and works: buildings, swimming pools, fences, roadworks, railways, airfields, breakwaters, docks, jetties, bridges, tunnels, cooling towers, pipelines, drainage works, transmission works, and others, including site preparation and pile driving. Building and construction work means work in that industry performed in New South Wales that is either carried out under a contract of employment for which an award fixes a rate of pay, or carried out under a contract that is not of employment but would be award-covered if it were, or work by a person who directly supervises such work or is a clerk of works (s 3(1) definition). Work outside NSW may be deemed building and construction work if a levy or agreement is in place (s 3(2)).

Worker is defined broadly to include any person who, under a contract (whether of employment or not), performs building and construction work, however remunerated. The definition excludes classes of persons prescribed as exempt by regulation, and also excludes those employed by certain government bodies: any body constituted by an Act of a State or Commonwealth (other than the Royal Agricultural Society Act 1911 or a prescribed Act), or a council, county council, or joint organisation under the Local Government Act 1993 (s 3(1) definition of worker). A subcontract worker is a worker who performs work otherwise than under a contract of employment (s 3(1)).

Year’s service is deemed to be every 220 days of service credited to the worker in the register, or every period considered a year under a corresponding law (s 3(5)). Service credits cannot exceed 220 days in any financial year (s 24(2)). The method for calculating service credits differs for full-time employees (220 days for a full financial year, or two-thirds of the number of days in a part-year, s 22(1)-(2)), part-time employees (based on full-day equivalents, s 22(3)-(3A)), and subcontract workers (based on income relative to a minimum annual income, s 22(4)-(5)). Service credits may also be granted for illness or injury, training courses, voluntary emergency work, light duties under workers compensation, and unpaid work on residential buildings for sale (s 23).

Long service payment is the amount paid to a qualifying registered worker (or their personal representative), calculated using a formula based on the number of credited days (S) and the applicable rate of ordinary pay (P), as defined in s 29. Standard pay is defined either as the rate for a Carpenter/Joiner under a 1975 Award, or as prescribed in regulations (s 3(1)). Long service levy is payable on the erection of every building (with exceptions) at a rate prescribed but not exceeding 0.6 per cent of the cost of erecting the building (s 34, s 35). The levy is due before work commences (s 36). The Fund is the Building and Construction Industry Long Service Payments Fund. The Committee is the Building and Construction Industry Long Service Payments Committee, which has advisory and appellate functions.

Who it affects

The Act affects a broad range of participants in the building and construction industry. Workers, both employees and subcontractors, are directly affected: they must be registered to accrue service credits and become eligible for long service payments. Any person who performs building and construction work as defined is covered, unless they fall within an exempt class (such as employees of certain government bodies). Registration is not automatic; the Corporation may register a person on application or on its own initiative (s 17). Employers who engage workers under contracts of employment have specific obligations: they must notify the Corporation within 7 days of a worker commencing building and construction work (s 16A), provide annual certificates of service within one month after 30 June (s 20(1)(a)), and provide final certificates within 7 days after employment ceases (s 20(1)(b)). They must also keep prescribed books and records for at least 6 years (s 56). Employers who intend to pay an alternative long service benefit (for example under the Long Service Leave Act 1955) must notify the Corporation before making that payment (s 31A). The levy falls on the person who obtains development consent, a construction certificate, or a complying development certificate, or, in other cases, the person for whom the building is erected (s 37). Contractors for the Crown are also liable (s 38). Crown instrumentalities must withhold instructions to commence work unless evidence of levy payment is produced (s 38A). Directors and managers of corporations face executive liability for certain offences: failure to notify under s 16A and failure to pay levy under s 39 (s 63). The Long Service Corporation administers the register, the fund, collects levies, makes payments, and shares information with other agencies (s 58AB). The Committee advises the Corporation and hears appeals on registration, service credits, levy assessments, and application of minimum and maximum pay rates. The Minister appoints Committee members, and the Chief Executive Officer (Secretary of the Department of Customer Service) chairs the Committee (s 8). Reciprocating States and Territories are affected through agreements under s 55, enabling cross-border service recognition.

Key duties and rights

The Act imposes several concrete duties on employers and confers corresponding rights on workers.

Duties of employers: An employer who employs a worker under a contract of employment must notify the Corporation within 7 days after the worker commences building and construction work in New South Wales (s 16A). Failure is an offence with maximum penalty 20 penalty units. The employer must furnish certificates of service annually (within one month after 30 June) and within 7 days after the worker ceases employment, and also within a time specified by the Corporation (s 20(1)). The certificate must be in approved form, state whether the worker was employed for the whole or part of the period, contain particulars of time spent on building and construction work, and be verified (s 20(3)-(4)). Extensions may be granted but not exceeding 2 months (s 20(2)). Employers must keep prescribed books and records for at least 6 years (s 56). They must also notify the Corporation before paying any alternative benefit (s 31A). On the levy side, the person liable must pay the levy before work commences (s 36) and lodge a notice in approved form (s 39). If a supplementary levy is required due to increased costs, the Corporation may issue a notice requiring additional payment (s 41).

Rights of workers: Any person may apply for registration as a worker (s 16). The Corporation must register every person it is satisfied is a worker (s 17). A registered worker is entitled to have service credits recorded in the register, up to 220 days per year (s 24(2)). They may claim service credits for subcontract work (s 21) and for certain non-work periods (s 23). They must receive an annual notice of their credited days (s 25(1)) and may object within 6 months (s 25(2)). They may apply for a long service payment upon meeting the qualifying criteria (s 28). Personal representatives of deceased workers may also apply. Workers may request an earlier registration date under s 18(2), but the Corporation cannot backdate more than 2 years without special circumstances (s 18(3)). Workers have a right to appeal certain decisions to the Committee: refusal or cancellation of registration (s 49), refusal of service credits (s 50), limitation of payment due to minimum/maximum rates (s 50A), levy cost determinations (s 51), and directions on interest on levies (s 52). The appeal must be lodged within 21 days of notification (s 54(1)(a)) or as prescribed. The Committee’s decision is deemed the final decision of the Corporation (s 54(4)).

Penalties and enforcement

The Act contains a range of penalties and enforcement mechanisms to ensure compliance.

Penalties for specific offences:

Employer fails to notify Corporation of employment of a worker: maximum 20 penalty units (s 16A).
Employer fails to furnish a certificate of service within the required time: maximum 20 penalty units (s 20(1)).
Person fails to pay long service levy or lodge notice: maximum 20 penalty units (s 39).
Person fails to comply with a requirement to provide information on actual cost: maximum 20 penalty units (s 41(2), (4)).
Person fails to keep prescribed books and records for at least 6 years: maximum 20 penalty units (s 56(3)).
Person wilfully delays or obstructs an authorised person, or fails to comply with a requirement under s 58: maximum 50 penalty units (s 58(4)-(5)).
Person makes a false or misleading statement in any application, certificate, claim, etc: maximum 50 penalty units (s 58A).
Person makes a false or misleading statement in an application for a long service benefit under corresponding law: maximum 50 penalty units (s 32A(3)).

Interest and recovery of levies: Any long service levy not paid by the due date bears interest at 2 per cent per calendar month or part thereof (s 46(1), (4)). Interest is deemed part of the unpaid levy (s 46(2)). The Corporation may waive or reduce interest in special circumstances, or extend the due date (s 46(3)). The levy becomes a debt due to the Crown payable to the Corporation, and may be sued for in any competent court (s 47(1)-(2)). The Corporation may make an assessment of the amount due and that assessment is evidence in proceedings (s 47(3)-(5)).

Enforcement of payment: The Corporation may recover any charge, fee, or money due as a debt in a competent court (s 61). It can take possession of records for evidence (s 58AA). Penalty notices may be issued for prescribed offences (s 64A). Proceedings for offences are dealt with summarily in the Local Court, and may be instituted within 6 years of the act or omission (s 64). Appeals from the Local Court lie to the Industrial Relations Commission in Court Session under the Industrial Relations Act 1996 (s 64(2)).

Executive liability: Directors or individuals involved in management of a corporation may be personally liable for executive liability offences committed by the corporation. The designated executive liability offences are s 16A (failure to notify employment) and s 39 (failure to pay levy). The maximum penalty for the individual is the same as for the corporation (s 63). Additionally, directors and managers may be liable as accessories for any corporate offence under s 63A (aiding, abetting, inducing, conspiring, or being knowingly concerned).

How it interacts with other laws

The Act does not operate in isolation. It expressly interacts with several other Acts and schemes.

Long Service Leave Act 1955: The Act does not grant a right to long service leave as such; s 30A confirms that leave is not an entitlement under this Act, but a worker and employer may agree on unpaid leave, which is treated as an absence from employment under the Long Service Leave Act. Where a worker receives an alternative benefit (such as long service leave taken in advance under the Long Service Leave Act or a corresponding law), any long service payment under this Act is to be reduced accordingly (s 31(1)). A person cannot receive a double benefit for the same period (s 31(2)). If the alternative benefit is taken due to bankruptcy or liquidation of the employer, the worker may claim the difference from the Corporation (s 31(3)). Employers who provide alternative benefits can claim reimbursement from the Corporation under s 32. Before paying an alternative benefit, the employer must notify the Corporation (s 31A).

Workers Compensation Act 1987: A registered worker who performs light duty work while partially incapacitated due to a building and construction injury may be credited with service days for that light duty work, but only for up to 3 years after the injury (s 23(4)-(5)).

State Emergency and Rescue Management Act 1989: Voluntary building and construction work performed in an emergency declared or recognised under that Act (or similar) can generate service credits (s 23(3)).

Environmental Planning and Assessment Act 1979: The levy provisions refer to development consent, construction certificates, and complying development certificates under that Act (s 37, s 40, s 42). The definition of building and erection in the levy part adopts meanings from the Local Government Act 1993 (s 33).

Reciprocal arrangements: The Governor may declare a State or Territory reciprocating, and its corresponding law a corresponding law, if an agreement under s 55 is in force and the Governor is satisfied that law provides long service benefits for building and construction workers (s 3(6)-(7)). Service and payments can then be transferred or recognised across borders. The Corporation can pay benefits under a corresponding law and seek reimbursement (s 32A).

Commonwealth industrial instruments: The definition of award includes a Commonwealth industrial instrument, being a prescribed award or agreement under Commonwealth law (s 3(1)).

Long Service Corporation Act 2010: The Corporation and Fund are established under that Act, and many administrative provisions were relocated from this Act to that Act, leading to the repeal of former Divisions 1 and 3 of Part 2.

Criminal liability laws: The executive liability provisions (ss 63, 63A) complement general criminal law principles of accessorial liability.

Amendment history

The Act has been amended extensively since its original enactment in 1986. The schedule of amendments listed after s 3 shows amendments in 1986 (No 149), 1989 (Nos 79, 226), 1992 (No 57), 1995 (No 11), 1998 (Nos 33 and 120), 2004 (No 55), 2005 (No 43), 2007 (No 27), 2010 (Nos 15 and 123), 2011 (No 22), 2012 (No 97), 2017 (No 65), 2018 (No 25), and 2022 (No 59). Additionally, amendments from 2021, 2023, and 2024 are reflected in the current text (ss 19, 19A, 58AA, 58AB, 64A, and Sch 3 amendments). Key amendment themes include:

The 1998 Act (No 33) made substantial changes: it substituted the definition of building and construction work, rewrote registration provisions (s 16, s 17), introduced s 16A (employer duty to notify), overhauled service credit calculation (s 22, s 23), and inserted new provisions on alternative benefits (s 31) and payments to employers (s 32). It also inserted s 30A (long service leave agreement) and s 31A (notification of alternative benefits).
The 2010 Act (No 15) restructured administration by transferring functions to the Long Service Corporation and repealing various sections (4-7, 10-14). It inserted s 32B (deemed minimum and maximum rates), s 50A (appeal on pay rate limits), s 38A (Crown contractors to give evidence of levy payment), and s 54A (personal representative appeals). It also amended s 18 (date of registration), s 19 (cancellation and suspension), s 22(3A) (part-time work), and s 42 (refunds).
The 2010 Act No 123 (Long Service Corporation Act) consequential amendments replaced references to the old Long Service Payments Corporation with the new Long Service Corporation and updated fund references.
The 2012 Act (No 97) introduced s 63A (accessorial liability for corporate offences) and modernised s 63 (executive liability for specific offences). It also amended s 16A and s 39 penalty units.
The 2018 Act (No 25) substituted s 57 (service of documents) to allow modern methods including email.
The 2021 Act (No 23) inserted s 58AA (power to take possession of records), s 58AB (exchange of information), and s 64A (penalty notices). It also amended s 59.
The 2024 Act (No 84) inserted s 19A (special circumstance for restoration of cancelled registration relating to Commonwealth place days) and amended s 19(6) to allow longer restoration window.

Gotchas

Practitioners and clients should watch for these less obvious provisions.

Seven-day notification trap: An employer who engages a worker under a contract of employment must notify the Corporation within 7 days after the worker commences building and construction work in NSW (s 16A). Failure is an offence of 20 penalty units, and for corporations it is an executive liability offence (s 63). This is easy to overlook in a busy industry.

Levy due before work commences: The long service levy is due and payable before work is commenced on the erection of a building (s 36). Paying after starting work is a breach, and interest accrues at 2 per cent per month on late amounts (s 46). The Corporation may grant extensions only in special circumstances (s 46(3)).

Backdating registration limited: A person can request an earlier registration date, but the Corporation cannot fix a date earlier than 2 years before the request unless special circumstances warrant (s 18(3)). This means late registration may lose years of potential service credits.

Cancellation after 4 years of non-service: If a worker has less than 5 years’ service and 4 consecutive years of non-service days pass, the Corporation must cancel registration (s 19(1A)). For those with 5 or more years, the Corporation may suspend (s 19(1B)). Restoration is possible only within 6 years after cancellation unless special circumstances exist, or if required under a reciprocal agreement (s 19(6)). The special circumstance of performing work on a Commonwealth place (s 19A) can salvage a cancellation if the non-service days included work at a Commonwealth place within NSW.

220-day annual cap: A worker cannot be credited with more than 220 days’ service in any financial year (s 24(2)). Service in a reciprocating jurisdiction also counts towards this cap (s 24(2A)-(2B)). This can limit the benefit for workers who work multiple jobs or overtime.

Reduction for alternative benefits: If a worker takes long service leave under another scheme (e.g., Long Service Leave Act 1955), the payment under this Act is reduced (s 31(1)). The Act attempts to prevent double-dipping. The employer must notify the Corporation before paying any alternative benefit (s 31A).

No payment for certain cancellations: If registration is cancelled due to non-service (s 19(1A)) or because the person is not a worker (s 19(2)), the person loses all entitlement to any long service payment for days already credited (s 19(4)(b)). This can be harsh for workers who have accumulated credits but then become inactive for 4 years.

Appeal time limits: Appeals to the Committee must be lodged within 21 days after notification of the decision (s 54(1)(a)). Missing this deadline may forfeit the right to challenge. There is limited flexibility to extend time unless regulations prescribe otherwise.

Executive liability for directors: Directors and managers can be personally liable for corporate offences under s 16A and s 39, even if the corporation is not prosecuted (s 63(5)). The defence of taking all reasonable steps (defined in s 63(7)) requires proactive compliance systems.

Levy refund time limits: Refunds for overpaid or mistakenly paid levies must generally be applied for within 12 months of payment, or within 12 months of completion of building work for other refunds (s 42(4), (7)). The Corporation may allow later applications in special circumstances, but this is not automatic.

Certificate of service late filing: If an employer furnishes a certificate of service more than 2 years late, the days in that certificate are not counted for the purposes of the employer’s reimbursement under s 32 (s 32(3A)), which took effect from 1 July 2011.

How to comply

Compliance requires proactive attention to registration, reporting, levy payment, and record-keeping.

For employers: Immediately upon engaging a worker (employee) to perform building and construction work in NSW, notify the Long Service Corporation within 7 days using the approved form (s 16A). Ensure that the worker is or becomes registered; the Corporation will handle registration, but the employer can assist. Annually, within 1 month after 30 June, complete and submit a certificate of service for each worker for the preceding financial year (s 20(1)(a)). On cessation of employment, provide a certificate within 7 days (s 20(1)(b)). The certificate must be accurate and verified; errors can lead to penalties. Keep all prescribed books and records for at least 6 years (s 56). Before paying any long service leave benefit under another scheme to a building and construction worker, notify the Corporation (s 31A). For levy purposes, before erecting a building, determine the cost, calculate the levy (at the prescribed rate up to 0.6%), pay the levy to the Corporation before work commences, and lodge a notice of payment (s 36, s 39). If costs increase, be prepared to pay supplementary levies (s 41). If the building is for the Crown, the contractor is liable (s 38). Obtain evidence of payment (a receipt) and if dealing with a Crown instrumentality, produce it before starting work (s 38A). Keep copies for at least 6 years.

For workers (including subcontractors): Apply for registration if not already registered (s 16). Ensure current contact details are recorded with the Corporation. For subcontract work, lodge a claim for service credits within 12 months after 30 June each year (s 21(2)(a)) or within 12 months after permanently ceasing work (s 21(2)(b)). Provide accurate income and costs details. For employees, rely on employer certificates but check the annual notice of service credits sent after 31 July (s 25). If the notice is inaccurate, lodge an objection within 6 months (s 25(2)). Keep personal records of work days. If you cease work permanently, reach retiring age, or become incapacitated, apply for a long service payment using the approved form (s 28). If you die, your personal representative should apply promptly. If you disagree with a Corporation decision, appeal to the Committee within 21 days (s 54). Keep copies of all communications.

For levy payers (developers, builders, owners): Determine the cost of erecting the building, pay the levy before work starts, and keep the receipt. If the cost changes, be ready for supplementary assessments. Apply for refunds if the building is not built or costs decrease within the required timeframes (s 42). Use instalments only if the cost exceeds $100,000 (or prescribed amount) and the construction period exceeds 1 year or a lump sum is unduly onerous; first instalment must be paid before work starts (s 43).