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INDUSTRIAL RELATIONS
Make certain you’re meeting your CoINVEST obligations
The Master Builders Victoria industrial relations team receives many enquiries from members who want to understand their legal obligations. Members will often seek our advice in relation to minimum wages, overtime rates, annual leave and other employee entitlements. When advising our members, we find that one particular obligation isn’t always well understood, and sometimes, it is overlooked completely. Here are some of our most frequently asked questions on the topic of CoINVEST. The hardship precipitated by the COVID-19 pandemic underscores the importance of resources like CoINVEST. Particularly in times like these, when the people behind the building and construction industry need support in ways they perhaps have never imagined, ensuring your compliance with a long service leave fund requirement is essential.
What is CoINVEST?
CoINVEST is the construction industry long service leave fund in Victoria and is governed by the Construction Industry Long Service Leave Act 1997. 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 one employer for seven years. CoINVEST operates as a fund, where employers pay a quarterly contribution fee proportionate to the size of their workforce’s total wages. After seven years of working in the construction industry, workers can claim their long service leave from CoINVEST.
Who is covered by CoINVEST?
Broadly speaking, CoINVEST covers work in the principal and allied construction industry – this encompasses building, electrical, and metal trades in commercial industrial and domestic settings throughout Victoria. The scheme also includes renovation, maintenance and installation work, as well as some service, maintenance and repair work. In the construction industry, most trades, labourers, apprentices and forepersons are covered by the scheme. The scheme covers employees, but also extends to working directors and some independent contractors.
How does it work?
Every three months, employers must complete a Workers’ Days and Wages form. Employers record how many days their employees worked in the quarter and also 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. Once workers have completed seven years of service in the construction industry (even with different employers) they can make a claim for long service leave. CoINVEST will pay the worker 9.1 weeks’ pay. For every additional year after the first seven, workers receive an additional 1.3 weeks leave.
I only do domestic work. Do I still have to pay?
CoINVEST is a compulsory requirement for all kinds of building work including new builds, renovations, installations, maintenance and repair work. The scheme applies to both commercial and domestic businesses.
I don’t have an EBA. Does CoINVEST still apply?
CoINVEST is a statutory obligation under the Construction Industry Long Service Leave Act 1997 (Vic). It applies to all businesses who engaged workers in the construction industry, regardless of whether or not they have an enterprise agreement.
Do I have to pay for my apprentice?
Apprentices are also covered by the CoINVEST scheme. Although you do not have to pay contributions for apprentices, you must ensure they are registered with The hardship precipitated by the COVID-19 pandemic underscores the importance of resources like CoINVEST.
the scheme and that their working days and school days are recorded.
I don’t pay CoINVEST because I only use subbies.
You don’t have to pay CoINVEST for genuine subcontractors. Genuine subcontractors can make their own contributions if they wish, but this is optional. However, you will still need to make contributions for a subcontractor if they are deemed to be your employee for the purposes of CoINVEST. Some indications of a deemed employee are that they only work for your business, they are paid based on hours worked rather than per job and they don’t provide their own materials. If CoINVEST determine that the subbie is a deemed employee, you will be required to record their service with CoINVEST as an employee, even if they work under an ABN.
What about casual employees?
If you have casual employees that perform more than five days of covered work in any month, you are legally required to record this service with CoINVEST.
I’m the director of my business. Do I need to pay CoINVEST for myself?
If you are operating under a company ABN and perform building and construction work, you will be classed as a working director under CoINVEST. This means that you are treated as an employee of your business for the purposes of CoINVEST. Working directors must pay contributions for themselves and can be penalised for failing to do so. This can also apply to some Trustee directors too.
What if I don’t pay?
CoINVEST is a legal obligation on employers and penalties apply to businesses that fail to comply. Aside from back-paying contributions, CoINVEST may require you to pay additional statutory interest charges on the amount owed. This can be very costly, particularly for businesses who have operated in the industry for some time and have never paid contributions in the past.
I haven’t been paying CoINVEST. What should I do now?
Call the Master Builders Industrial Relations team for a confidential discussion regarding your situation. CoINVEST can be complicated if you’re unfamiliar with the scheme — we can assist you to determine your obligations and help you work out the next steps. Information you discuss with our advisors is confidential — we will never contact CoINVEST about your situation unless you ask us to.
What is it going to cost?
CoINVEST have agreed to help Master Builders Victoria members who were 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 have agreed to waive the statutory interest charges that would otherwise apply. The statutory interest charges in some cases can be up to tens of thousands of dollars - this represents a significant saving for members who choose to come forward voluntarily and have the charge waived. 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. If you would like to discuss the interest waiver or have questions about CoINVEST, call the Master Builders Industrial Relations team on (03) 9411 4555 for a confidential discussion regarding your situation.
Adrian Ziccone Senior Industrial Relations Advisor
In the construction industry, most on-site employees will be covered by the Building and Construction General On-site Award (the Award), or by an enterprise agreement that incorporates the terms of the Award. The Fair Work Commission (FWC) has made important changes to the Award from 1 July 2020. These changes have been made with the intention of simplifying and modernising the Award, but have had the effect of varying some entitlements, which may have implications for you.
Industry allowance
The most significant change made by the FWC was the consolidation of several special, disability and expense allowances into a single industry allowance. The updated industry allowance payable depends on if work is performed in the commercial or residential industry. In the commercial industry, the allowance will be six per cent of the weekly standard rate, whereas in the residential industry it will be 4.8 per cent. As this industry allowance is payable for all purposes under the Award, it is generally built into the employee’s standard rate of pay. Given the allpurpose industry allowance has increased as a result of this change, it has had the effect of increasing minimum wage rates from 1 July 2020. While the increases are only marginal, it may be worthwhile reviewing employee rates of pay to ensure compliance with the new pay obligations.
Travel allowance
The Award now expressly states that no travel allowance is payable if an employee is provided with a fully maintained vehicle free of charge to the employee or provided transport from the employee’s home to the place of work and return. The entitlement to payment for distant work has also slightly changed. Employees will be entitled to the distant work travel payment (i.e. time spent in travel and $0.47 per km) only when they exit the radial boundary and the site is more than 50 km by road from their usual place of residence.
Time off in lieu
A new feature was inserted to provide flexibility in relation to overtime. Rather than be paid for overtime, the Award now allows weekly-hire employees to take time off instead. In short, the employee’s overtime gets recorded in a bank for the employee to take at a later stage. Any time off in lieu arrangement must be agreed by the employer and employee, recorded in writing, and taken within six months.
Appropriate footwear
Another change concerns boots. The Award now requires that employees are provided with steel-capped boots, where there is a legal, or employer imposed, requirement for such boots to be worn. Employers must reimburse the cost of such boots and replace them on a fair wear-and-tear basis.
Other changes
Admittedly, there is a raft of changes to the Award made by the FWC — too many to list in one, short article. Further changes include simplifying clauses, minor wording changes or adding other flexibilities. We also remind members that the FWC has already announced that minimum rates of pay under the Award will increase by 1.75 per cent from the pay period commencing after 1 November 2020. If members would like further information on the Award changes or the minimum wage rates, they can contact the MBV IR Team on (03) 9411 4555.
