Are you someone who works in the construction or building industry? If so, then good news! You may be eligible for long service leave as an employee in the construction and building industry.
What is long service leave?
Long service leave refers to extended period of leave awarded to employees who have been employed by the one employer for usually ten (10) years. This rewards loyalty for a specific employer as well as affords the opportunity for an extended break from work.
Employees: Portable Long Service Leave
The construction industry is unique in its project-based work and therefore, most employees are not able to stay with one particular employer long enough to accrue for long service leave. As a result, portable long service leave schemes were introduced by the construction industry so that employees could still enjoy the same benefits as other industries.
How does it work?
Each state runs a slightly different scheme setup by a fund that employers make contributions to. In the case of NSW, employers do not pay direct contributions. Instead, these are fully funded by a levy on building and construction work of $25,000 and above, paid by the person for whom the construction work is being performed. This covers both employed and self-employed individuals in the construction industry.
As a result, employees will receive their long service leave irrespective of which employer they are with whilst the employer is full reimbursed for any out of pocket leave liability when the employee takes leave. As a result, this also minimises the liability for the employer.
Employers: What are my employer legal obligations?
Employers in the building and construction industry are required to register as an employer with the Long Service Corporation.
Whilst having employees work for you, as an employer, you must lodge their start and end notices as well as all relevant records whilst they are employed. Ensure you check that they have a Long Service Corporation registration number and if so, include their registration number on the notices. These are required even if employers are employed for only one day of work.
Prior to paying long service leave, the employer must advise the Corporate before the payment is made. This is to prevent workers from duplicating payments for any period of work. The form can be filled online through the Long Service Corporation website.
How am I reimbursed?
It is required that you apply for a payment via phone by calling the Corporation Helpline on 13 14 41 and requesting for an application form. A “tell us about long service payments to workers” form. It’s imperative that this form is submitted to avoid non-payments from the Corporation and potentially debt recovery action for any double payments.
Employer returns are an annual activity record of any workers you have employed for the purpose of building and construction activity. This should outline how much work that each worker has done for you within a month of the end of the financial year. These can be completed and lodged throughout July following the start of the new financial year. The return should include a list of workers that you have recorded as being employed under your corporation. These can be lodged either online or via mail. If no submission is made by 31st July of each financial year, your business will be targeted by the Corporation for an audit of your records.
The portable long service leave scheme was designed to provide mutual benefits to both employers and employees. However, it’s important that as a business owner, you are understanding what your obligations are to ensure that you can enjoy these benefits. This article provides a guide to understanding what this process is entails. For more information, the Long Service Corporation website provides comprehensive resources to the scheme. Note, that this article is predominantly focused on the NSW Long Service Scheme for the building and construction industry. As mentioned previously, each state or territory may have differing compliant requirements.
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Please note that every effort has been made to ensure that information provided in this guide is accurate. You should note however, that the information is intended as a guide only, providing an overview of general information available to contractors and small businesses. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal or tax advice. You should, where necessary, seek your own advice for any legal or tax issues raised in your business affairs.