The Master Builders Victoria industrial relations team receives many enquiries from members who want to understand their legal obligations. They often seek our advice in relation to minimum wages, overtime rates, annual leave and other employee entitlements. When advising members, we find that one particular obligation isn’t always well understood and is sometimes overlooked completely. Here are some of our most frequently asked questions on the topic of CoINVEST.
What is CoINVEST?
CoINVEST is the construction industry long-service leave fund in Victoria, 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 a single employer for the required seven years. CoINVEST operates as a fund into which 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, which 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 among 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 of leave.
I do only 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?
Yes, it does. CoINVEST is a statutory obligation under the Construction Industry Long Service Leave Act 1997 (Vic). It applies to all businesses that 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 scheme and that both their working days and school days are recorded.
Do I have to pay CoINVEST if I useonly subcontractors?
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 work only for your business, they are paid based on hours worked rather than per job and they don’t provide their own materials. If CoINVEST determines that the subcontractor 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 who 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 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 can happen if I don’t pay?
CoINVEST is a legal obligation for 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 that 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 Master Builders’ industrial relations team for a confidential discussion regarding your situation. CoINVEST can be complicated if you’re unfamiliar with the scheme, but 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 has 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 has agreed to waive the statutory interest charges that would otherwise apply. The statutory interest charges, in some cases, can amount to tens of thousands of dollars, so this represents a significant savings 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 us on (03) 9411 4555 for a confidential discussion of your situation.