The ACT Government has delayed the expansion of its portable long service leave scheme to the hospitality, accommodation, hairdressing and beauty industries by six months, citing the difficult conditions facing many businesses.

The new industries will now join the ACT Leave Services Industry Scheme on January 1, following an announcement by the Minister for Skills, Training and Industrial Relations. The scheme had previously been due to commence in mid-2026.

ACT Leave, the statutory authority that administers portable long service leave schemes, said the extension was designed to give businesses more time to prepare while easing pressure during a challenging economic period.

The delay follows sustained criticism from hospitality groups and the Canberra Liberals, who argued the scheme would add to the financial pressures facing businesses.

Opposition Leader Mark Parton labelled the levy “a tax” rather than reform, saying cafés, restaurants and clubs were already grappling with rising costs, staff shortages and economic uncertainty. He argued businesses would be required to pay into the scheme for all workers, despite the sector’s high staff turnover meaning many employees would never qualify for long service leave.

Despite the delayed start date, registration remains compulsory. Eligible employers must register with ACT Leave by January 1, although businesses that have already registered do not need to take any further action until they are contacted in December with details about the next steps.

The Services Industry Scheme builds on the former Contract Cleaning Industry Scheme and extends portable long service leave to workers in hairdressing and beauty services, and accommodation and food services.

Once the expanded scheme takes effect, employers will be required to lodge quarterly returns and pay a levy based on their employees’ gross ordinary wages. The current levy rate is 1.07 per cent, with the first quarterly return and payment due by 30 April 2027.

Industrial relations lawyer Richard Calver has also warned the levy would have an immediate financial impact on employers. Writing in CityNews earlier this year, he said the 1.07 per cent levy on gross ordinary wages represented “a burdensome additional payroll cost” for small cafés and restaurants operating on thin profit margins.

To reduce the initial impact on the hospitality sector, food and beverage businesses will receive discounted levy rates over the first three years of the scheme. They will pay 25 per cent of the full levy in 2027, increasing to 50 per cent in 2028 and 75 per cent in 2029 before the full levy applies from 2030.

Portable long service leave allows eligible workers to accrue long service leave entitlements across multiple employers within the same industry, rather than with a single employer.

ACT Government piles on more cost for small businesses