Business Owners

Many business owners in the construction industry also perform trade work covered under the rules of the Scheme. Employers may have different obligations on behalf of their business owners, dependent on the way that their business is structured and the work that the business owner carries out.

Generally business owners fall into one of two major categories, which is dictated by the structure of their business.

Self-employed subcontractors operating under a sole trader or partnership ABN structure.
Working directors operating under a company ABN/ACN structure.

Self-employed subcontractors

Business owners operating under a sole trader or partnership ABN are self-employed subcontractors and are not an employee of the business that they operate. Visit our Self-Employed section of the website to read more about the requirements of sole trader and partnership ABN operators under the Rules of the Scheme.

Working directors

A working director is a person who performs work covered by the Scheme and is the director of an incorporated company, which means it is registered with the Australian Securities and Investments Commission (ASIC). An incorporated company generally has ‘Pty Ltd’ in its company name.

Working directors are employees of the company. The employer is required to report service to LeavePlus and pay long service leave charges to the Fund on behalf of all eligible workers who are covered by the Scheme including working directors.

As a working director, you are considered to be both the employer and the employee. This means that there are certain legal obligations your business must fulfil:

Register your business as an employer, and yourself as an individual employee/working director.
Complete quarterly Workers’ Days and Wages returns on behalf of all workers.
Pay long service leave charges to the Fund.

Working directors fall into one of two categories depending on how they are paid – those who take a consistent and provable PAYG wage, and those who are not (often taking drawings or inconsistent amounts from the company).

Consistent PAYG wages

If a working director takes a consistent wage provable through pay slips showing PAYG and tax withheld at the time of payment, then you can report wages for the period consistent with the days worked on your quarterly Workers Days and Wages return.

Inconsistent wages / drawings

If the working director does not take a consistent wage and you cannot provide proof of your PAYG wage, you are required to report your service to LeavePlus based on the ‘Minimum Contribution Rate’ for your trade – you can find these in the menus on the ‘Workers Days and Wages returns’ page. Any subsequent Long Service Leave claim for the working director will then be paid out according to this same rate.

Two-thirds rule

In any given Workers’ Days and Wages return period where a working director performs covered work for at least two-thirds of their employment, the employer must record 100% of the working director’s employment on the quarterly return. This is referred to in the Rules of the Scheme as the ‘Two-thirds rule’.

For example, a working director may perform a mix of covered (on-site-construction – 47 days) and non-covered (office-admin/tendering – 18 days) work.

Where the proportion of covered-work vs non-covered-work is more than two thirds (in this case 72%), the days and wages must be rounded up to reflect the full employment period.

Days Performing Covered Work	Equivalent Wages	TWO THIRDS RULE ROUNDED DAYS	TWO THIRDS RULE ROUNDED WAGES
47	$8,930	65	$12,350

For all instances where the proportion of covered-work vs non-covered-work does not exceed two-thirds, then the service should be reported only as the days performing covered work and their equivalent total gross wages.

Calculated Rate of Pay:

The rate of pay for your claim matches your ordinary rate of pay as a working director. LeavePlus is regularly updated with your wage information via your quarterly Workers Days and Wages returns. We use this information to present you with an accurate ‘calculated’ rate of pay when you apply to claim Long Service Leave.

By accepting the rate of pay presented in your claim, you won’t need to provide any pay slips or further information. Payment will generally occur within 1-3 business days from application for this type of claim.

Complex Claims:

In some cases, we may not be able to offer you a ‘calculated rate of pay’, or you may choose not to accept the offered rate. These types of claims will be more complex and will require additional time to process.

We will request further information and proof of financial documentation to determine an accurate rate of pay for your claim, consistent with the documentation you provide.

If you are unable to provide proof of financial documentation, LeavePlus reserves the right to put your claim ‘on hold’ or pay your claim at the Minimum Contribution Rate for your trade which are listed on our ‘Workers Days and Wages returns’ page.

Any excess above this rate from previous contributions will then be refunded to your company in a separate ‘adjustment’ process.

Trusts, Trustees, and companies

Where a company is a Trustee, directors of the company are employees and will be classed as working directors if:

The director is performing construction trade work covered by the scheme for more than 5 days in the month, and;
The director’s wage is subject to personal income tax as a PAYG regular income (weekly, fortnightly, or monthly) where tax is withheld at the time of payment and remitted to the ATO, and;
The director’s wage is subject to the Superannuation Guarantee Charge.

If all three criteria are met, the employer must register the director with LeavePlus and report service for them as a working director on quarterly Worker Days & Wages returns and pay long service leave charges to the Scheme. If all three criteria are not met, the director is classified as a self-employed working subcontractor.