If you employ workers who perform work covered by the scheme in Victoria for five or more days in the month, you are required to report that service to CoINVEST and make contributions to the Fund. The contribution is currently at 2.7% of the total gross wage reported on Workers’ Days and Wages forms. This amount is not deducted from workers’ wages.
Contributing as an employer is split into two processes:
This credits each worker with their respective service days for the quarter. No dollar amount is credited against any worker’s file, and there is no running balance of monies; ONLY service days are credited to each worker.
You will be invoiced for 2.7% of the total gross wage reported on your WDW. The cost is not itemised per employee, and not to be deducted from any worker’s wages – this is an on-cost to employers.
The contribution process is split into two parts because their components act in two different ways.
The purpose of Long Service Leave Contributions from the employers is to fund the scheme and ensure CoINVEST is funded sufficiently to be able to pay out claims to all workers who have accrued an eligible entitlement.
There is no dollar value against any worker’s name, as any payment made to a worker when they claim Long Service Leave is entirely dependent on their rate of pay (as indicated by their payslips) at the time of when they make their claim. Therefore, a cumulative contribution amount would have absolutely no relation to how much a worker will be paid when they claim their Long Service Leave.
It is sometimes the case that an employer has not recorded service for one of their workers for previous periods, and in order to comply with their obligations under the law, the employer must supply information to CoINVEST detailing the amount of days worked and total gross wages for each financial year in which that worker was under their employ performing covered work.
To backdate days and wages for workers you must complete the Employer Missing Service Form and return to us with attachments detailing the days worked and wages paid for each year of missing service.
For apprentices, you still need to complete the form and advise of the days worked in each year where service may be missing, but you do not need to provide any details regarding wages – CoINVEST covers the liability of apprentices up to the first 1,040 days (4 years) of any covered apprenticeship, meaning there are no charges on the part of the employer for apprenticeship service.
Backdated adjustment charges may contain statutory interest charges due to non-compliance with your employer obligations. These charges are payable to CoINVEST in accordance with CoINVEST Rules as Trustee of the Long Service Leave Act.
Why is the contribution rate 2.7%?
We use a percentage rather than a set dollar amount to keep the charges uniform and fair between the larger and the smaller employers, so that everyone pays their fair share proportionally to fund the scheme.
The rate is agreed in advance by our Board of Directors and reviewed yearly. The current rate of 2.7% has been in place since 1 July 2009. The contribution rate is agreed upon and implemented to match market conditions so that CoINVEST can provide the best service to its members in administering Long Service Leave.
The contribution rate does not apply to reported service for apprentices, as CoINVEST covers the liability for apprentices for up to four years of any covered apprenticeship.