CoINVEST: Portable Long Service Leave in Victoria

What it is

Victoria runs its portable long service leave scheme under the Construction Industry Long Service Leave Act 1997 (Vic). The scheme is administered by CoINVEST Limited as trustee for the Construction Industry Long Service Leave Fund. CoINVEST has traded as LeavePlus since 14 August 2023, but the legal entity is still CoINVEST Limited and the obligations have not changed.

Construction workers in Victoria sit outside the general Long Service Leave Act 2018 (Vic) for this purpose. Their long service comes from the fund, not from the employer of the day.

The key difference from New South Wales

This is the fact that trips up builders working across the border. Victoria is an employer contribution scheme, not a levy scheme.

In New South Wales the money is collected once, from the project, as a percentage of the approved cost of the work. In Victoria nothing is collected from the project at all. Instead every registered employer pays a charge on the ordinary pay of every covered worker, every quarter, for as long as that worker is employed.

A Victorian builder who assumes the levy was handled at permit stage will simply not be paying, and CoINVEST will backdate the service and invoice the arrears with statutory interest under section 5 of the Act.

The charge and the return

The charge is 2.7 per cent of the ordinary pay of covered workers. That rate has been in place since 1 July 2009 and is reviewed each year by the CoINVEST board on actuarial advice.

Ordinary pay includes:

• the gross amount paid to the worker
• shift loadings
• site allowances and tool allowances
• qualification allowances

Ordinary pay excludes travel and fare payments, living away from home allowances, leave loading and payments for work done outside normal hours.

Employers lodge a Workers Days and Wages return each quarter, showing the days worked and the ordinary pay for each covered worker. The invoice that follows is payable within 14 days. Lodging a return late is a criminal offence, and interest runs on anything overdue.

There is no charge for apprentices. CoINVEST carries the liability for up to 1,040 days of a VRQA recognised apprenticeship.

Who has to register

• Employers of covered construction workers in Victoria must register the business
• Working subcontractors who employ workers or apprentices in a covered trade must register and must pay the charge for those workers
• Self-employed people and working directors can register in their own right and pay set monthly amounts toward their own benefit

Service, the qualifying period and the entitlement

Service is measured in days recorded against the worker across every employer they have. Change employers and nothing is lost, which is the entire point of the scheme.

For service accrued from 1 July 2002 the accrual rate is 1.3 weeks of leave for each year of service, so 10 years of service produces 13 weeks. Service accrued before 1 July 2002 accrued at 0.866 weeks a year.

A worker needs 7 years of recognised service, being 1,820 days, before they can claim. Once past that point the worker claims directly from CoINVEST and the fund pays them. The employer does not fund the leave a second time.

Where an employer has paid long service leave directly to a worker and has also reported that worker's service, the employer can claim reimbursement from CoINVEST for the fund's share. That claim has to be lodged within one year of the payment.

Interstate service

CoINVEST recognises service recorded with the other state and territory schemes under the reciprocal arrangements between them. A worker who moves from Queensland or South Australia to Victoria does not restart the clock. Get the worker's interstate scheme number at induction so the transfer can be arranged before a claim is made.

What to do about it

• Register the business with CoINVEST before the first covered worker starts
• Lodge the Workers Days and Wages return every quarter and pay the invoice inside 14 days
• Report days and ordinary pay for every covered worker including casuals
• Report apprentice days even though there is no charge on them
• Do not deduct the 2.7 per cent from wages. It is an employer on-cost