Millions of Australians can now cash out annual leave and take the money instead after new reforms came into force this week.

The industrial umpire has inserted clauses into almost all of Australia's 122 workplace awards, which allow employees to strike agreements with their bosses to cash out portions of leave, as long as they still have at least four weeks remaining after doing so.

The industrial umpire has inserted clauses into almost all of Australia's 122 workplace awards, which allow employees to strike agreements with their bosses to cash out portions of leave. Credit:Louie Douvis

Under the changes, workers will only be able to cash out two weeks of annual leave every 12 months. Employers will also receive greater powers to force staff who have excessive leave balances to take paid leave.

The new clauses affect nearly 2 million Australians covered by modern awards – the basic pay and conditions safety nets for most occupations. The changes were introduced this week, and come after the Fair Work Commission last year delivered the findings of a sweeping inquiry into annual leave provisions.