Portable long service leave in Victoria

Background

CoINVEST is Victoria’s compulsory construction industry portable long service leave scheme. All employers, subcontractors, workers and apprentices in the construction industry must be registered with CoINVEST.

The scheme requires employers in the building and construction industry to make long service leave contributions to CoINVEST where they have eligible workers.  When an eligible worker has completed seven years of recognised service in the industry, they are eligible for long service leave. CoINVEST pays for workers’ long service leave, relieving employers of any financial responsibility.

Are you a construction industry employer?

If you employ workers on construction sites, engaged in ‘construction, erection, installation, reconstruction, re-erection, renovation, alteration, demolition or (in some limited cases) maintenance or repairs’ you are required to register as an employer. This includes companies that employ working directors.

Who must you register?

You must register all ‘eligible workers’.  An eligible worker is a person who is ordinarily a resident in Victoria and is employed under any verbal or written contract of employment (inc. workplace agreement), to perform work defined under an award recognised by CoINVEST.

CoINVEST recognises most awards covering construction, erection, installation, reconstruction, re-erection, renovation, alternation, demolition and certain maintenance or repair work. 

You are generally not required to register office workers, supervisors, managers and sales people.Similarly, an employer is not required to register genuine working subcontractors.

Workers versus working subcontractors

A worker may be a qualified tradesperson or a labourer. A worker is employed directly by an employer under a contract of employment, and includes apprentices. A worker is paid a weekly wage, not price per job, and works under the direction of the employer. A worker uses the employer’s tools and equipment.

If you are the director of an incorporated business and you also work on site, you are treated as a worker for your own company (a working director).*

A working subcontractor is independent of the employer and works on a price per job basis, supplying his/her own tools and equipment. The working subcontractor may have his/her own registered unincorporated business.

If you are a contractor you may be able to register with CoINVEST and make your own contributions. For more information see HIA’s information sheet on Portable Long Service Leave in Victoria – Working Subcontractors.

How do you register and what are my responsibilities?

To register contact CoINVEST on 03 9664 7677 or 1800 805 844. To request a registration form or download it at www.coinvest.com.au. You must provide CoINVEST with a ‘service return’ every quarter where you employ any eligible worker for five days or more in a month. Penalties apply for late lodgement.

From 1 July 2009 the contribution rate is 2.7% x total gross wages.* The wage to be shown on the service return includes all allowances except overtime, travel allowance and annual leave loading. No contributions are due on apprentices (although they must still be registered as workers).

If you are engaged in joinery work, cabinet-making, shopfitting and landscape gardening, you may be covered for only part of the work you do. Only wages related to ‘on site’ work need be included in service returns. In these circumstances, you should contact a HIA Workplace Adviser to discuss your particular obligations.

*Working directors – If the business is structured in such a way that your remuneration as a worker is less than the award wage, then the contribution amount payable must be at the minimum award wage for the type of work you do.

What are the workers’ entitlements?

An eligible worker receives service credits for all work performed and reported.

From 1 July 2002 eligible workers are entitled to pro-rata long service leave of 9.1 weeks on full pay for every seven years of service credits or 13 weeks after 10 years of service credits. Any service credits received for work performed before 1 July 2002 are calculated at a rate of 6.06 weeks leave after seven years of credited service.

Long service leave is paid on a worker’s current ordinary rate of pay. This includes current allowances, but does not include travel allowance, overtime or annual leave loading.

You should seek further advice on eligible worker entitlements where the worker is employed outside the construction industry for more than four years or is engaged as a contractor for a period of time.

At present, there is no provision in Victoria for any LSL payments for less than seven years of service, except for the death benefit. However, working subcontractors who pay into the scheme for themselves, will receive a refund of their own contributions if they do not reach seven years.

Workers who work interstate

If you are a Victorian employer who employs workers in another state or territory for short periods, you may apply to the Long Service Leave Authority in the other state or territory for an exemption from their scheme, provided that you continue to record their service under the CoINVEST scheme.  Alternatively, you may need to register as an employer with the relevant long service leave scheme in that state or territory.

Long service leave is portable between all states and territories in Australia. Until an employee actually applies for long service leave, their record of service in the industry is kept separately in each state or territory scheme. Therefore it is important that employees notify CoINVEST when they have long service leave credits elsewhere and update all schemes of any change of address.

 

For further information call the HIA Memberline on 1300 650 620.