Annual Leave Accrual During Workers' Compensation in NSW

Do Annual Leave Days Accrue During Workers' Compensation?

In New South Wales, annual leave continues to accrue while an employee is receiving workers' compensation payments, but the accrual rate may be affected by the nature of the injury and the employer's policy. Employees on a workers' compensation claim retain their normal leave accrual schedule unless the injury or recovery period is so severe that the employer reduces or suspends working hours.

How the Accrual Process Works

Under the Fair Work Act, annual leave accrues at a rate of 4% of ordinary hours worked. When an employee is on a workers' compensation claim and is unable to work, the employer may calculate leave based on the hours actually worked before the injury and any partial return to work. If the employee returns to a reduced schedule, the accrual rate adjusts proportionally.

Key Factors That Influence Accrual

Several elements determine how leave accrues during a claim:

• Severity of Injury: A serious injury that limits the employee's ability to work may lead to a temporary reduction in accrual.
• Return‑to‑Work Arrangements: Partial or modified duties can maintain a higher accrual rate than a full leave of absence.
• Employer Policy: Some employers choose to continue full accrual regardless of injury severity, while others adjust based on hours worked.

Legal Obligations for Employers

Employers must keep accurate records of hours worked and leave accrued during a workers' compensation claim. Failure to do so can result in disputes over entitlements when the employee resumes normal duties or applies for leave.

What Employees Should Do

Employees should request written confirmation of how their annual leave will accrue during the claim period. If the employer proposes a reduction, the employee can negotiate or seek advice from the Fair Work Ombudsman. Maintaining clear documentation helps avoid future conflicts over leave entitlements.

Conclusion

Annual leave generally accrues during workers' compensation in NSW, but the rate can be adjusted based on injury severity, return‑to‑work arrangements, and employer policy. Both employers and employees benefit from transparent communication and proper record‑keeping to ensure compliance with the Fair Work Act.