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Unlike regular long service leave, which essentially rewards an employee’s long and faithful service with their employer, access to PLSL entitlements is based on a worker’s length of service in the construction industry rather than with a particular employer. The rationale is that in the construction industry, employees are typically engaged on a project basis and move from employer to employer as one project is completed and another starts.
The purpose of this Information Sheet is to answer some of the common questions which HIA receives from members about PLSL in Western Australia, including:
“Relevant employers” must register with the Construction Industry Long Service Leave Payments Board (the Board).
A relevant employer under the scheme is an employer who has “employees” in the “construction industry”, including apprentices and employees on worker’s compensation. Relevant employers includes labour hire agencies.
The construction industry includes the on-site construction, erection, installation, reconstruction, re-erection, renovation, alteration, demolition, maintenance of or repairs to a diverse range of building and other works.
Accordingly, PLSL generally only covers onsite workers and tradespeople in construction, reconstruction or renovation.
Off-site construction employees, such as employees who carry out work exclusively in a workshop or are in purely office-based or administration roles, are not included in the scheme. They are covered by other awards and legislation.
Contributions are paid on a quarterly basis (similar to workers compensation and payroll tax).
From 1 January 2022 through 31 December 2022 the contribution rate is 0.1% of the ordinary rate of pay paid to the employee.
The ordinary rate of pay paid to the employee is the rate of pay (disregarding any leave loading) which the employee is entitled to for leave – note that this includes any allowances which are paid for leave periods.
Along with full time, part-time and casual employees, PLSL also applies to so-called ‘labour-only’ contractors.
The Board has produced a list of 5 key factors for determining whether or not portable long-service leave contributions are payable in respect of contractors. These are whether the contractor:
If the answer to any of these questions is ‘no’ then, there is a risk that the Board may decide to investigate your affairs in closer detail. This may lead to the Board determining that portable long service leave contributions are payable by you, and ordering you to back-pay any contributions.
As the Board’s criteria potentially cover many on-site contractors, it is important that members regularly review their working arrangements with their contractors.
Working directors, which are treated as employees of a firm, and who draw a regular wage, are also included in the scheme.
It is to be noted that that the method of calculating the ‘ordinary rate of pay’ for a working director can be complex. MyLeave has advised the HIA that the ‘ordinary rate of pay’ for working directors is the amount that they draw down as wages (up to 38 hours per week) on a defined, regular and at least monthly basis, that they pay tax on a PAYG basis for, have wage records for and are issued a PAYG Group Certificate at the end of each financial year for. One off adjustments during or at the end of the financial year are not included nor are salary sacrificed sums.
It is important that working directors are compliant with the above guidelines otherwise they may not be entitled to receive a long service leave benefit from MyLeave.
Employers may apply for an exemption for contributing for employees who are domiciled in another State but work in Western Australia if payments are made for those employees to a long service leave scheme in the other State.
Employers who wish to make payments for employees living in Western Australia but who work in another State will need to apply to the relevant interstate long service leave scheme in the other State for an exemption from that State’s scheme.
An employer must maintain a record of each employee’s name and address, date of birth, registration number, the applicable industrial award and classification of work applicable to the employee, starting and finishing dates, the days on which the employee was absent from work, and the number of days the employee completed on-site. The records must be kept for a period of 7 years after the last entry was made.
Board Inspectors have a wide range of powers to check and enforce compliance with the scheme. These include the power to enter the premises of an employer at any reasonable time of the day to inspect books and other papers for any of the purposes of the Act, which may include copies of any contractor agreements, work orders and invoices. Inspectors have the power to take extracts from or copies of any such books or papers. Penalties may be imposed for non-compliance with the requests of an Inspector.
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