Leave Loading: Are you getting it right?

This is a new wrinkle of which Payroll needs to be aware.

In NSW, employers have traditionally adopted the position that leave loading is not to be paid on any leave that is paid out on termination, as opposed to leave actually taken during the course of employment, because when leave is paid out it is technically not "taken".

However, the Fair Work Ombudsman has recently reviewed this issue and has concluded that the terms of the Fair Work Act mean that leave loading must be paid when accrued leave is paid out on termination of employment.

Furthermore, this is still the case even though some modern awards specify that leave loading is not payable in those circumstances because the Act 'trumps' the provisions of modern awards.