Long Service Leave for the Construction Industry
Unlike the standard long service leave, where an employee is entitled to take long service leave after seven years of continuous service with the same employer, the construction industry is one of the only industries that has a portable long service scheme, which enables workers to take long service leave after seven years of service within the industry.
The Portable Long Service Leave Scheme is administered in Victoria by CoINVEST. The scheme was established in 1976 to ensure workers in the construction industry would have access to long-service leave, even if they didn’t remain with a single employer for the required seven-year period. CoINVEST operates as a fund in which employers pay a quarterly contribution. After seven years of working in the construction industry, workers can claim their long-service leave from CoINVEST.
The rationale behind the CoINVEST scheme is that employees in the construction industry frequently change employers due to the nature of the industry. Without the CoINVEST scheme, these employees would be disadvantaged compared to other industries if they had to work seven continuous years with one employer to obtain long service leave.
Who is Covered by CoINVEST?
If you’re an employer in the construction industry in Victoria, carrying out:
shop fitting or
floor covering work,
chances are you are required to be making regular CoINVEST contributions on behalf of your employees. The scheme covers employees but also extends to working directors and some independent contractors. The CoINVEST scheme also covers apprentices. Although you don’t have to pay contributions for apprentices, you must ensure they are registered with the scheme and that their working days and school days are recorded.
How does CoINVEST work?
If you employ workers who perform work covered by the scheme in Victoria for more than five days in the month, you are required to report that service to CoINVEST and make contributions to the Fund. Every three months, employers must complete a ‘Workers’ Days and Wages’ form. This form records how many days their employees worked in the quarter and how much the employee was paid over the same period. CoINVEST will then issue an invoice to be paid, currently based on 2.7 per cent of total gross wages reported on the form. This amount is not deducted from the workers’ salaries. It’s simply an additional cost to the employer, just like superannuation.
Once workers have completed seven years of service in the construction industry (even among different employers), they can claim long-service leave. CoINVEST will pay the worker 9.1 weeks’ pay. After the first seven, workers receive an additional 1.3 weeks of leave for every additional year of service.
I haven’t registered for CoINVEST?
If you haven’t registered with CoINVEST, you should contact your Accountant or me for a discussion about your circumstances. CoINVEST has also agreed to help Master Builders Victoria members unaware of their obligations under the scheme. If your business has never been registered in the past and you come forward through Master Builders, CoINVEST has agreed to waive the statutory interest charges that would otherwise apply. These interest charges, in some cases, can amount to tens of thousands of dollars, so this represents significant savings for members of the Master Builders who choose to come forward voluntarily and have the charge waived. Whilst the interest charges will be waivered, it is important to note that you must still back-pay the contributions owed, but payment plans are also available through CoINVEST to assist people with meeting their obligations.