It has recently come to our attention that business owners operating in the construction industry may not be aware of their statutory obligations under theConstruction Industry Long Service Leave Act 1997(Vic) and more particularly with CoINVEST.
Whilst this is not an area where we provide advice, the following is a general guide of how the scheme operates and is a quick snapshot for those who it may be applicable to:
CoINVEST applies to all businesses that engaged workers in the construction industry, regardless of whether or not they have an enterprise agreement.
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.
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.
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.
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.
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.
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 directorsmustpay contributions for themselves and can be penalised for failing to do so. This can also apply to some trustee directors, too.
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.
If you are operating in the construction industry, you have an obligation to contact CoINVEST on 03 9411 4555 to ensure that you meet your obligations where necessary.
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Chris Beks
Chris Beks
CeebeksTM Founder and Director Chris is a man on a mission and a man with a vision. An internationally renowned accountant, he is regularly featured in a range of publications and often called on as a guest speaker at conferences and events around the country.You’ll find Chris to be as passionate about your lasting financial success as he is about creating a better world.
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