The Governing Board of the ACT Long Service Leave Authority (LSLA) has recently agreed to a reduction in the employer levy payable under the Building and Construction Scheme of the Long Service Leave (Portable Schemes) Act 2009 (ACT) (Act).

Leave Schemes under the Act

The Building and Construction Scheme allows workers in the construction industry to accrue leave entitlements across multiple employers. It also applies to self-employed workers in these industries.

Other schemes included in the Act that operate in the same manner include:

  • The security industry;
  • The contract cleaning industry; and
  • The community sector industry.

Levy Rate

Employers pay a levy on all wages for the administration of the Scheme. This levy is reviewed at least every three years. The Governing Board has reduced the rate from 2.5% to 2.1%, effective on 30 April 2018.

The reduction was due to the following factors:

  • Solid investment returns on the scheme investments;
  • Strong revenue collection from employers; and
  • Continued efficiencies in administration.

The levy rate decrease does not have an effect on employee leave entitlements, so they also benefit from the employer having fewer tax obligations to the LSLA.

Conclusion

Formal notification of the levy reduction will occur in early May to avoid confusion for the quarterly remittance in the January to March quarter.

In the interim, the notice of the reduction will be great news for employers and employees in the building and construction industry and signals that the regime is working effectively.