Employers’ New Labour Hire Obligations – State-by-State Guide and Update
Labour hire policy is complicated; contact myWorkCover for a free health check of your policy to review whether you are eligible for premium refunds. myWorkCover can provide you with accurate classifications, allowing you to pay the correct premium and avoid the penalty for under-declaring your remuneration.See Penalty Review.
Workers’ Compensation insurance is one of the most expensive insurance policies for many businesses. Many businesses are unaware that the cost of their premium business can be managed and reduced using a strategic management system. myWorkCovercan provide you with expert services to meet your organisation’s needs.More reading Case Studies
The new financial year has arrived, and it is time to review your labour hire workers’ compensation policy for potential refunds. You can avoid overpaying your premiums by properly managing your policy. More information is available here.
Labour hire, also known as labour hire services or labour hire agencies, is a practice where businesses or organisations hire workers on a temporary basis through a third-party agency. These agencies specialise in recruiting, screening, and supplying workers to meet the temporary staffing needs of other companies.
Here’s how labour hire typically works:
Client Businesses: These are companies or organisations that have short-term or seasonal staffing requirements, or need temporary workers to fill in for regular employees who are on leave or for specific projects.
Labour Hire Agencies: These agencies have a pool of pre-screened and qualified workers from various industries and backgrounds. They maintain a database of available workers who can be dispatched to client businesses as needed.
Temporary Workers: Individuals seeking temporary employment register with labour hire agencies. These workers may have a variety of skills and experiences and are available for short-term assignments.
Matching: When a client business requires temporary workers, they contact the labour hire agency. The agency then matches the client’s needs with suitable workers from their pool of candidates.
Placement: The selected temporary workers are sent to the client business to perform the required tasks. The client business is responsible for supervising and managing the workers’ tasks during their tenure.
Payment: The labour hire agency handles the workers’ payroll, including wages, taxes, and benefits, and invoices the client business for the services provided.
Labour hire is commonly used in industries with fluctuating workloads or in situations where businesses need to quickly scale up or down their workforce without the long-term commitments associated with traditional employment. It provides flexibility for both employers and workers but also raises concerns about worker rights, job security, and fair treatment, which vary depending on labour laws and regulations in different regions.
Labour Hire Licensing Laws in Australia
If you provide labour hire services in Queensland, Victoria, the ACT, or South Australia without a licence, you risk being fined. It is illegal in these states to use an unlicensed labour hire service provider. Individuals and organisations with high moral and financial standards are permitted to provide labour hire services. This article will examine and compare the main components of labour hire licencing systems.
Labour Hire Licensing
Everything you need to know about the new Labour Hire Licensing, what it is, how does it affect you and the steps you need to follow to avoid fines!
Labour Hire Authority
Information on Labour Hire should commonly apply to all states & territories. Please contact the relevant Workers Compensation Authority for more information upon placement as each state & territory will have different procedures and premium calculation formulas.
Labour hire providers and hosts remain responsible for complying with Victorian and Commonwealth workplace laws such as occupational health and safety laws, workers compensation laws, superannuation laws and applicable accommodation and transportation standards.
Labour Hire Authority
Labour Hire in Each State of Australia: Legislation and Premium Calculation
Labour hire regulations, legislation, and premium calculations vary across Australian states. Here’s an overview of labour hire in each state with references to legislation and premium calculation:
New South Wales (NSW): Labour hire is governed by the Labour Hire Licensing Act 2018 (NSW). Premium calculations for workers’ compensation insurance consider industry classification, claims history, and payroll.
Victoria (VIC): VIC follows the Labour Hire Licensing Act 2018 (VIC). Premium calculations for workers’ compensation insurance depend on factors such as industry and payroll.
Queensland (QLD): QLD’s labour hire industry is regulated under the Labour Hire Licensing Act 2017 (QLD). Premium calculations for workers’ compensation are influenced by industry classification and wages paid to workers.
South Australia (SA): SA has its Labour Hire Licensing Act 2017 (SA). Premium calculations for workers’ compensation insurance consider the nature of work and employee wages.
Western Australia (WA): Discussions about labour hire regulation are ongoing in WA, and premium calculation specifics may vary.
Tasmania (TAS): Labour hire providers in TAS must adhere to state-specific regulations. Premium calculations depend on factors like industry classification and payroll.
Northern Territory (NT): While discussions about regulation have occurred, specific premium calculations may differ.
Australian Capital Territory (ACT): ACT follows its Labour Hire Licensing Act 2021 (ACT). Premium calculations for workers’ compensation insurance are influenced by wages and industry classification.
National Framework: There are discussions regarding establishing a single national framework for labour hire regulation, which may impact premium calculations.
Premium calculations for workers’ compensation can be complex, and they consider various factors, including industry, claims history, and wages. Providers should consult relevant state authorities and insurance providers for precise details. For comprehensive information on specific legislation and premium calculations, refer to the provided sources.
What is labour hire?
Both skilled and unskilled labour hire workers are hired for temporary or permanent roles. They are not employed by the host employer to whom they offer labour; rather, they are employed by a labour hire agency
Hired labour is the employment arrangement between:
Victoria Labour Hire – Who is required to obtain a licence?
Victoria’s Labour Hire Authority is the regulatory agency responsible for issuing licences.
The definitions of “employer” and “employee” under the Occupational Health and Safety Act of 2004 (OHS Act) have been updated on 22 March 2022.
The Labour Hire Licensing Act of 2018 (LHL Act) requires all labour-hire providers to obtain licences. If you send one or more employees to work for someone else’s business or project, you’re most likely a labour-hire provider.
Victoria – Labour Hire Authority
In this case, you must file an application. If you’re not sure if you’re a labour hire provider, read “Who is a labour hire provider?” or seek independent legal advice for your specific situation. Please contact myWorkCover for assistance; we can assist.
A labour hire licence is primarily a Parliamentary Act intended to prevent the exploitation of temporary workers, independent contractors, and others in the workplace. The scheme not only protects employees, but it also protects businesses from being associated with illegal activities and facing fines.
Who Needs to Be Licensed under the Labour Hire Licensing Act 2018 (LHL Act)?
According to the Labour Hire Licensing Act 2018 (LHL Act), all labour hire providers are required to be licensed. To operate legally in Victoria as of 30 October 2019, a labour hire provider must meet one of the following conditions:
Be Licensed: They must hold a valid labour hire license.
Have Applied for a License Before 30 October 2019: If they submitted a license application before this date, and the application has not been refused, they can continue to operate legally while their application is being processed.
If you supply one or more workers to perform work as part of another person’s business or undertaking, you are likely to be considered a labour hire provider. In such a case, it is necessary to apply for and obtain a labour hire license to operate legally.
If you are uncertain about whether you fall under the definition of a labour hire provider, you should review information about the types of labour hire providers provided on the Labour Hire Authority website or seek independent legal advice tailored to your specific circumstances.
Ensuring compliance with the LHL Act is essential to avoid legal issues related to labour hire operations in Victoria.
A labour hire provider is defined as an individual or organization that, in the course of conducting a business, has arrangements with one or more individuals where the business:
Supplies Workers: They supply individuals to perform work in and as part of a host’s business or undertaking, and the provider is obliged to pay these individuals for their work. This is the general definition of labour hire services (section 7 of the LHL Act).
Recruits or Places Workers: They provide recruitment or placement services by recruiting individuals for, or placing them with a host who pays the individuals for work in and as part of the host’s business or undertaking. Additionally, the provider may procure or provide accommodation for these individuals for some or all of the period they work with the host. This is an extended definition of labour hire services relating to recruitment and placement services (section 8(1) of the LHL Act).
Manages Independent Contractors: They conduct contractor management services by recruiting individuals as independent contractors to perform work in and as part of a host’s business or undertaking and manage the contract performance by the independent contractors. This is an extended definition of labour hire services relating to contractor management services (section 8(2) of the LHL Act).
The Labor Hire Licensing Regulations 2018 (Vic.) also outline certain circumstances in which an individual is considered to ‘perform work in and as part of a business or undertaking.’ These circumstances help determine whether someone is classified as a labour hire provider.
Ensuring compliance with these definitions and regulations is crucial for anyone engaging in labour hire activities in Victoria.
Applications for a licence before 30 June 2020
Labour hire providers who applied for licenses before June 30, 2020, can continue offering their services while their applications are being reviewed. This arrangement ensures minimal disruption to their business operations during the assessment period, provided they comply with workplace and other applicable laws. However, it’s essential for these providers to maintain strict compliance with all relevant regulations. If a provider submitted their application for a license between October 30, 2019, and June 30, 2020, and is later found to be non-compliant, they could face substantial penalties for providing labour hire services without a valid license.
This measure aims to strike a balance between allowing legitimate labour hire providers to operate during the licensing process while ensuring strong enforcement against non-compliant entities. It underscores the importance of adhering to licensing requirements and complying with workplace laws to avoid legal consequences.
The Labor Hire Authority acknowledges the significant impact of the COVID-19 pandemic on the labour hire industry. Some providers have faced business losses, while others are experiencing increased demand for workers. Additionally, new providers have entered the market during this challenging period.
To support both providers and the fairness of the labour hire environment, the Authority has decided not to take enforcement action against providers applying for a license before June 30, 2020, as long as they submit complete applications without noncompliance.
It is crucial for compliant providers to obtain a license, which helps prevent worker exploitation and enhances transparency in the industry. This decision aligns with the Authority’s mission to protect workers and maintain a fair labour hire landscape.
Providers and hosts must still adhere to workplace laws, including safety, compensation, superannuation, and accommodation standards. To assist hosts and providers during the pandemic, the Authority has published information about licensed labour hire providers and the industries they supply, particularly benefiting sectors such as healthcare, cleaning, transportation, horticulture, and food processing.
The Authority continues processing license applications and providing education on compliance. They encourage sharing this information to help providers apply before the June 30, 2020 deadline, ensuring a fair labour hire environment.
Providers of labour hire services who submitted applications before midnight on 30 June 2020, may continue to continue to conduct business as long as no evidence of non-compliance is found while their application is being reviewed.
Application for a licence after midnight 30 June 2020
You cannot offer labour hire services without a licence if your licence application was submitted after midnight on 30 June 2020. To continue receiving a licence, applicants must continue to uphold their legal obligations.
Maximum penalties exceed $581,000, see ‘Offences and penalties’ for further details.
Labour Hire Authority
Labour hire providers must not:
provide labour hire services unless they have a valid labour hire licence
Unless having a valid licence, they may not advertise or represent that they provide or are willing to provide labour hire services
engage into an agreement for the provision of labour hire services unless the potential provider is in possession of a current licence
and enter into a proposed arrangement with a supplier if the client has reasonable grounds to suspect that the proposed arrangement is intended to avoid or circumvent a duty imposed by this Act on the client, the supplier, or another person.
New labour-hire obligations for employers effective on 22 March 2022
Employers who use labour hire should reassess their health and safety responsibilities. The Occupational Health and Safety and Other Legislation Amendment Act 2021 amends the Occupational Health and Safety Act to ensure that labour hire workers have the same rights and protections as an employer’s direct employees.
Labour-hire companies typically hire people to give to or place at the workplace of a company known as the “host.” Hosts were previously exempt from the occupational health and safety obligations that applied to direct employees because labour-hire workers were viewed as providers rather than hosts’ employees.
The OHS Act’s definitions of “employer” and “employee” have been expanded such that labour-hire workers are now considered employees of both the provider and the host.
WorkSafe Victoria
Labour-hire workers are protected from host employer discrimination when reporting health and safety concerns. The amendments require hosts and providers to comply throughout the labour-hire agreement through a process of consultation, cooperation, and coordination to ensure the health and safety of labour-hire workers.
Changes to labour-hire agreements under the OHS Act
The phrases “labour-hire services,” “provider,” and “worker” have new definitions in the OHS Act. These terms shall have the meanings ascribed to them in the Labour Hire Licensing Act of 2018.
The definitions of “employer” and “employee” are expanded in Section 5A of the OHS Act. A person is considered a “employer” of a labour-hire worker as of March 22, 2022, if they provide the following services:
*supplies the worker to,
*recruits the worker for,
*or places the worker with the person to perform work for the person.
WorkSafe Victoria
Health and safety obligations under the OHS Act
Previously, the host employer was responsible for some health and safety obligations under the OHS Act. This is due to the fact that the worker was not considered an employeeof the host company. The reclassification of labour hire workers under the new definition allows the OHS Act to eliminate any disadvantage by:
defining a labour-hire worker as an employee of their host employer as well as an employee of their labour-hire provider.From 22 March 2022, host employers owe the same duties towards labour hire workers as they do towards their direct employees.
WorkSafe Victoria
The OHS Act obligations of businesses and employees are outlined in WorkSafe’s guidance which can be found below:
To prevent worker exploitation by labour hire providers and their hosts, and to increase the transparency and integrity of the labour hire industry, all providers who are in compliance with their legal obligations and intend to continue offering labour hire services in Victoria in accordance with labour hire laws must obtain a licence.
Labour Hire Authority
A person or business that has a contract with one or more individuals allowing them to:
Provides the people to work in and on behalf of the host’s business, and the provider is obligated to pay the individual for the work. See‘The General definition of labour hire services (section 7 of the LHL Act)‘.
The provider recruits or places individuals with a host who must pay the individuals to perform work in and as part of the host’s business or undertaking, and the provider procures or provides accommodation for the individuals for some or all of the time that they work with the host. Labour hire services are defined as recruitment and placement services in Section 8(1) of the LHL Act.
Employs people as independent contractors to operate in and on behalf of a host’s business or undertaking as part of the provision of contractor management services, and supervises the independent contractors’ compliance with contractual obligations. In accordance with section 8(2) of the LHL Act, labour hire services are defined more broadly to include contractor management services.
The General definition of labour hire services (section 7 of the LHL Act)
The main category of labour hire providers is defined in section 7 of the Labour Hire Licensing Act 2018(Vic.) (the LHL Act), which provides that a labour hire provider is:
a business that has an arrangement in place with one or more individuals to supply the individuals to perform work in and as part of a host’s business or undertaking and is obliged to pay the individual for the work performed for the host.
Labour Hire Authority
Section 7 of the LHL Act defines a labour hire service as “work done in and as part of a host’s business or activity.” This guidance is intended to help businesses assess their situation and determine whether a labour licence is required before hiring employees.
Businesses must consider all of their engagements where they supply personnel to determine whether they are offering labour hire services under the LHL Act. A licence is required if your company provides labour hire services. If you are still unsure after reading the instructions, you should seek legal advice.
Assessing whether an arrangement is a labour hire service
The providing of workers on a labour hire basis, whereby the workers are employed by and take part in the host’s business or activity, will typically be made clear in the contract. If you’re trying to decide whether an arrangement is labour hire or if a worker is working “in and as part of” a host’s business, you should think about the tasks the worker is completing and how much of those jobs are integrated into the host’s business.
Some factors that might suggest a worker is performing work in and as part of the host’s business include:
the work is performed at the host’s premises
the work is subject to the host’s direction
the work is supervised or managed by the host or another labour hire worker supervised or managed by the host
the work is not a specialised service
the work is a key function of the host’s business or undertaking
the work is of a similar nature to work performed or previously performed by the host’s own employees.
The aforementioned list is not comprehensive, nor are these or any other factors by themselves. Each arrangement must be taken into account as a whole. The examples offered are just meant to serve as illustrations and are not intended to be taken as legal advice. If you’re wondering whether you require a labour hire licence, take into account your own circumstances and seek legal advice if you’re unsure.
Labour hire providers have several obligations that they must fulfil to operate legally and ethically. These obligations include:
Complying with Licence Conditions: Labour hire providers must adhere to the conditions specified in their licence. Failure to comply may result in penalties or the review, suspension, or cancellation of the licence.
Complying with Relevant Laws: Providers must comply with a range of laws, including taxation, superannuation, occupational health and safety, workers’ compensation, labour hire industry laws, workplace laws, migration laws, and applicable minimum accommodation standards.
Providing Annual Reporting: Providers are required to submit annual reports detailing their labour hire activities. This reporting ensures transparency and accountability.
Notifying the Authority of Changes: Any significant changes to a provider’s operations or circumstances must be promptly communicated to the relevant authority. This helps in maintaining accurate records and regulatory oversight.
Fit and Proper Person: Each relevant person associated with the labour hire provider must continue to be a ‘fit and proper person.’ This requirement ensures that individuals involved in the industry meet ethical and legal standards.
Ensuring Nominated Officers are Available: Labour hire providers must ensure that nominated officers are available for communication with the regulating authority. This facilitates inquiries and inspections.
Failure to meet these obligations may lead to serious consequences, including financial penalties or suspension, cancellation, or imposition of conditions on the labour hire licence. Compliance with these obligations is essential for maintaining the integrity of the labour hire industry, protecting workers’ rights, and ensuring fair and ethical business practices.
You are considered a labour hire host if you meet the following criteria:
You operate a business or enterprise.
You engage labour hire workers to carry out tasks within your business.
The term “labour hire hosts” refers to individuals or organisations that operate businesses such as plumbers, electricians, IT consultants, factories, farms, meat manufacturing establishments, meat processing establishments, poultry processing establishments, offices, warehouses, and commercial stores or premises that rely on the services of labour hire providers to find the labour for their business. You are a host if you own a business and employ labour hire services to carry out tasks there.
Labour Hire Authority
What are your obligations as a labour hire host?
As a labour hire host in Australia, your obligations are governed by various regulations and guidelines. These obligations typically include:
Compliance with Licensing Requirements: Depending on your state or territory, you may need to obtain a labour hire license. Ensure compliance with the labour hire licensing scheme in your jurisdiction.
Worker Safety: Provide a safe working environment for labour hire workers. Comply with workplace health and safety laws to prevent accidents and injuries.
Fair Work Standards: Adhere to Fair Work regulations, including minimum wage, working hours, and leave entitlements. Respect labour hire workers’ rights to fair treatment and equal pay for equal work.
Record Keeping: Maintain accurate records of labour hire worker details, including hours worked, pay rates, and contracts. This ensures transparency and compliance with labour laws.
Communication: Communicate clearly with labour hire workers about their duties, responsibilities, and safety procedures. Provide induction and training as necessary.
Report Incidents: Report workplace incidents and injuries promptly and accurately, as required by law.
Compliance Reporting: Fulfill reporting obligations related to labour hire to regulatory authorities as mandated by the labour hire licensing scheme.
Payment of Wages: Pay labour hire workers promptly and accurately according to their employment agreements and applicable laws.
Adherence to Codes of Conduct: Comply with any industry-specific codes of conduct or ethical guidelines that pertain to labour hire.
It’s essential to stay informed about any updates or changes in labour hire regulations, as non-compliance can lead to legal penalties and reputational damage. Consulting with legal experts or relevant government agencies or a workers’ compensation expert can help you ensure full compliance with your obligations as a labour hire host.
In compliance with labour hire regulations, hosts are required to engage with labour hire providers who meet specific licensing criteria. As of October 30, 2019, the following conditions apply:
Licensed Providers: Hosts must engage exclusively with labour hire providers who hold a valid labour hire license.
Pre-October 30, 2019 Applicants: Hosts may also engage with providers who applied for a labour hire license before October 30, 2019. However, there is a crucial condition: the provider’s application must not have been refused.
Transition Period: If a provider who applied before October 30, 2019, has their license application refused, host businesses are given a minimum of 28 days from the final decision to make alternative arrangements with a different licensed labour hire provider.
These regulations are in place to ensure that labour hire hosts work with reputable and compliant providers, enhancing worker protection and industry standards. It’s essential for hosts to verify the status of their labour hire providers and maintain compliance with these requirements to avoid legal issues and uphold fair labour practices.
To find a licensed labour hire provider, check the registers of:
Note: Offences and penalties for labour hire host is the same as the labour hire provider.
There are significant penalties for breaches of the Labour Hire Licensing Act 2018. See Offences and penalties.
Labour Hire Authority
Who is a Labour Hire Worker?
Labour hire workers are individuals employed and paid by labour hire providers and subsequently supplied to host businesses across various industries, including farms, meat manufacturing establishments, meat processing establishments, poultry processing establishments, factories, commercial stores, and offices. These workers can be engaged on a full-time, part-time, or casual basis.
Additionally, specific criteria define whether a person is considered a worker under the Labour Hire Licensing Act (LHL Act):
Payment by the Host: If a person supplied by a labour hire provider is entitled to be paid by a host, that person is classified as a worker under the LHL Act.
Accommodation Provision: If the labour hire provider also procures or provides accommodation for the worker, they are considered a worker under the LHL Act.
Contractor Management: Independent contractors supplied to a host by a labour hire provider can also be classified as workers under the LHL Act if the provider continues to manage the performance of the contract. This management may involve administrative and payroll functions or performance management related to the contractor.
It’s important to note that providers supplying individuals excluded from the definition of worker in the LHL Act and the LHL Regulations, such as certain secondees or students, are not considered labour hire providers and are not required to be licensed.
Moreover, a business needs only supply one worker to a host to be classified as a labour hire provider. Compliance with these definitions and regulations is crucial for both labour hire providers and host businesses to ensure legal adherence.
Workers on labour hire are people who are initially engaged directly by an “agency” and afterwards “on-hired” to perform labour for another business.
Labour Hire Authority
The first business handles perks and compensation for employees. The second company gives the employees duties to complete. It is the responsibility of both the host organisation and the labour hire agency to carry out a detailed risk assessment of potential hazards and implement the necessary safety precautions. The health and safety of each employee at work, as well as the health and safety of others, is still their responsibility.
On-hired workers are individuals hired and paid by labour hire companies and delivered to host businesses such as farms, meat production facilities, meat processing facilities, poultry processing facilities, factories, retail outlets, and offices on a full-time, part-time, or casual basis.
Important Note: a business need only supply one worker to a host to be a labour hire provider.
Labour hire Authority
Excluded classes of workers
If a provider only supplies individuals who are not considered workers under the LHL Act and the LHL Regulations, such as secondees or students. The provider is not considered a labour hire provider, and no licence is required. See excluded classes of workers for further information.
*people undertaking work or services under a vocational placement within the meaning of the Fair Work Act 2009(Cth).
Labour hire Authority
Premium calculation
On-hiring occurs when your company enters into a contract with a client (an end-user) to supply temporary workers, but the client does not serve as the workers’ principal or employer. If your company provides labour or on-hire services, each of your registered clients or on-hire locations will play a significant role in determining the insurance premium you pay.
The insurance premium will be determined using your Employers Performance Rating (EPR) and the Industry Rate for each of these workplaces.
Want to learn more about how your premium is calculated? Click here.
Your business is considered to be engaged in employment placement or recruitment services if your services include:
listing employment vacancies
selecting applicants
referring and placing applicants in employment.
Where should WorkCover claims be assigned?
Claims will be assigned based on the host employer’s industry classification and the relevant location where the work accident occurred.
WorkSafe Victoria
Administrative and Management Personnel Internal Internal staff, or individuals who oversee labour and on-hire businesses, are typically found at locations where the labour or on-hire business has jurisdiction. This workplace is serviced by a different registered Internal Administration Classification.
Providing client workplace information on the employer injury claim report
For the purposes of WorkCover insurance and claims, clients’ workplaces are treated equally to their own (known as imputed workplaces). When an on-hired worker or contractor who is assumed to be a worker of a labour hire employer suffers an injury at a client site, a claim is made against the putative workplace on the labour hire company’s insurance registration.
Which workplaces do you register on-hired workers?
Employees hired by a labour or on-hire company to perform tasks for their clients typically work on the client’s premises. As a result, labour and on-hire companies must register the workplaces where their on-hired employees work.
What you need to provide your insurer
Prior to the start of any new workers’ compensation insurance, give the following information to your Workover Agent (also known as the “Insurer”):
The legal name and business name of each on-hire client
ABN
The address of each on-hire client
Remuneration details associated with that particular on-hire workplace
Remuneration for all your internal staff
Your head office address
Your insurer will inform you of the appropriate industry classification after receiving the aforementioned information from you. Your insurer will add these on-hire workplaces to your WorkCover policy and notify you of the upcoming period’s premium.
Labour hire policy is complicated; contact myWorkCover for a free health check of your policy to determine whether you are eligible for premium refunds. myWorkCover can provide you with accurate classifications, allowing you to pay the correct premium and avoid the penalty for under-declaring your remuneration.See Penalty Review.
Offences and Penalties under the Labour Hire Licensing Act 2018
The Labour Hire Licensing Act 2018 imposes substantial penalties for violations. These penalties are designed to ensure compliance with labour hire regulations. Violators may face legal consequences, including fines and legal actions.
It’s essential for labour hire providers and hosts to adhere to the provisions of this Act to avoid these penalties. The Act aims to maintain fairness, integrity, and transparency in the labour hire industry, safeguarding the rights and interests of workers.
To gain a comprehensive understanding of specific penalties and their implications, individuals and organisations involved in labour hire should consult the Act and seek legal advice if necessary. It’s crucial to stay informed about labour hire regulations to prevent legal issues and maintain compliance.
There are significant penalties for breaches of the Labour Hire Licensing Act 2018.
What will happen if I don’t use a licensed labour hire provider?
If you don’t use a licensed labour hire provider, you may face legal consequences and penalties. Using an unlicensed labour hire provider can result in financial penalties for both hosts and providers. For instance, in Victoria, a host using an unlicensed labour hire provider can face fines of up to $120,000 for an individual and up to $600,000 for a corporation. This highlights the importance of using licensed providers to ensure compliance with labour hire regulations.
Furthermore, using an unlicensed labour hire provider can expose your business to legal risks and reputational damage. It’s essential to verify the licensing status of any labour hire provider you engage with to avoid these potential issues.
To stay compliant with labour hire laws and avoid penalties, it’s advisable to work with licensed labour hire providers who adhere to regulatory requirements. Always ensure that your labour hire arrangements are in line with the relevant legislation and regulations in your jurisdiction.
Providing labour hire services without a licence
In Australia, providing labour hire services without a license is typically illegal and subject to penalties. The specific licensing requirements may vary by state, but generally, labour hire providers must obtain a license to operate legally. For example, in Victoria, under the Labour Hire Licensing Act, individuals or organizations offering labour hire services without a valid license can face significant legal consequences. It’s crucial for anyone considering engaging in labour hire activities to familiarize themselves with the labour hire laws in their state and ensure they have the necessary licenses and permits to operate within the bounds of the law. Failing to comply with these regulations can result in fines and legal actions, highlighting the importance of adhering to licensing requirements when providing labour hire services. It’s advisable to consult with relevant authorities or legal experts to ensure full compliance with labour hire licensing laws in your specific jurisdiction.
Individuals and organisations that provide labour hire services without holding a licence that is in force face penalties exceeding:
$145,392 for an individual
$581,568 for a corporation.
Advertising labour hire services while unlicensed
Advertising labour hire services without the necessary license is a serious violation of labour hire laws in Australia. It is crucial for individuals or businesses intending to offer labour hire services to ensure they are properly licensed and comply with regional labour hire regulations. Failing to do so can result in significant legal consequences, including fines and penalties. Each Australian state has its own labour hire licensing requirements and legislation, so it’s essential to understand and adhere to the specific regulations in your jurisdiction. For detailed information on licensing requirements and compliance, you should refer to the Labor Hire Authority in your respective state and consult legal resources like those provided in the sources above. Operating within the bounds of the law ensures the fair treatment of workers and the integrity of the labour hire industry.
Individuals and organisations that advertise labour hire services without holding a licence that is in force or hold themselves out to be a labour hire provider, face maximum penalties of:
$36,348 for an individual
$145,392 for a corporation.
A host using an unlicensed labour hire provider
Hosts must only use licensed labour hire providers to provide labour hire services or face maximum penalties of:
$145,392 for an individual
$581,568 for a corporation.
Avoidance arrangements
Individuals or organisations attempting to evade or circumvent labour hire licensing obligations as outlined in the Labour Hire Licensing Act 2018 may face significant penalties.
Individuals or organisations who seek to enter into arrangements aimed at avoiding or circumventing labour hire licensing obligations that would otherwise be imposed by the Labour Hire Licensing Act 2018 on the client, supplier or someone else face maximum penalties of:
$145,392 for an individual
$581,568 for a corporation.
It is imperative for clients to promptly notify the Labour Hire Authority (LHA) if they become aware of or reasonably suspect the presence of any avoidance arrangement:
$36,348 for an individual
$145,392 for a corporation.
These penalties serve as a strong deterrent and punitive measure against any efforts to evade or avoid labour hire licensing obligations. They are enforced to ensure strict compliance with the law and to safeguard the fair treatment of workers.
How to Apply for a Labour Hire Licence
To apply for a labour hire licence, follow these steps:
Access the LHLO Portal: Providers can apply through the LHLO (Labour Hire Licensing Online) portal, which can be accessed from the home page of the Labour Hire Authority website.
Required Information: Your application will require a range of information, including:
Full name, address, and date of birth of the applicant.
If the applicant is a body corporate, the full name, address, and date of birth of each officer of the body corporate.
Whether the applicant is registered with the Australian Taxation Office and WorkSafe Victoria.
The number of workers supplied by the applicant to hosts during the 12-month period before the date of the application.
Details about the industrial instruments that determine the terms and conditions of employment or engagement of those workers.
Information about workers holding temporary work visas.
The industry or industries in which the applicant provides or intends to provide labour hire services.
Whether there is an intention to provide transport or accommodation to the workers.
Any relevant history of contravention of labour hire industry law, workplace law, or minimum accommodation standards by connected individuals.
Application Guides: You can find a summary of the required information in the application guides provided by the Labour Hire Authority.
Declaration: Applicants must declare, to their knowledge, compliance with various laws, including taxation, superannuation, occupational health and safety, workers’ compensation, labour hire industry laws, workplace laws, migration laws, and applicable minimum accommodation standards.
Privacy Policy: Note that personal information about individuals is requested for purposes such as enabling national police checks. Refer to the Labour Hire Authority Privacy Policy for more details.
Plan for Non-Operating Businesses: If you are not yet conducting a business that provides labor hire services, you will be required to declare that you have a plan in place to comply with the above laws. This plan may need to be submitted to the Labour Hire Authority upon request.
Please ensure that you provide accurate and complete information during the application process to facilitate the assessment of your labour hire licence application.
For more information about applying for a licence visit:
To renew your labour hire licence, follow these steps:
Renewal Period: Labour hire licence holders are required to renew their licence every three years as part of the Labour Hire Licensing Scheme.
Renewal Application: You can submit your licence renewal application online through the Labour Hire Licensing Online (LHLO) portal. It’s important to note that you can start the renewal process six months before the expiry date of your current licence.
Timely Renewal: It’s crucial to renew your licence before the expiry date. Failing to do so will require you to submit a new application, and you won’t be able to provide labour hire services until a decision is made on your new application for a licence.
Fees: Licence fees are associated with the renewal process. These fees must be paid at the time of application, annually, and during each licence renewal. For detailed information on licence costs and fees, you can visit the Licence costs and fees page.
More Information: For further guidance and details on the licence renewal process, you can visit the Renewing a Labour Hire Licence page on the Labour Hire Authority website.
Ensure that you initiate the renewal process well in advance of your licence’s expiry date to avoid any disruptions to your labour hire services. Timely renewal and compliance with fee requirements are essential to maintain your licence and continue operating as a labour hire provider.
Please refer to the provided sources for the most up-to-date information and specific instructions regarding licence renewal.
Fit and Proper Person Test for Labour Hire Providers
The ‘fit and proper person’ test is a crucial assessment conducted by the Authority for each relevant individual or body corporate included in a labour hire provider’s application. To be considered a fit and proper person under the LHL Act, an applicant must meet specific criteria. As of the time of application, they should not have:
Been found guilty of an indictable offence against a person, or an offence involving fraud, dishonesty, or drug trafficking, which was punishable by imprisonment of 3 months or more within the last 10 years (or an equivalent offence committed outside Victoria).
Contravened a workplace law, labour hire industry law, or minimum accommodation standard, or given an enforceable undertaking in respect of such contravention within the last 5 years.
Had a licence under a labour hire industry law cancelled, suspended, or revoked within the last 5 years, except if done at the licence holder’s initiative.
Been insolvent or under external administration within the last 5 years.
If the applicant is a body corporate, an officer of the body corporate was an officer of another body corporate whose licence was cancelled, other than at the licence holder’s initiative, within the last 5 years.
The applicant was an officer of a body corporate and was disqualified from managing corporations under the Corporations Act 2001 (Cth) within the last 5 years.
It’s essential for applicants to ensure they meet these criteria when applying for a labour hire licence. If there’s uncertainty about meeting the fit and proper person test, seeking legal advice is recommended to navigate this requirement effectively.
The Authority will conduct a ‘fit and proper person assessment for each relevant person included in an application.
South Australia Labour Hire
Amendments to South Australia’s labour hire laws commenced on 20th July 2020.
Labour hire providers are broadly defined as a person (individual or business) that, while carrying out business, supplies a worker to complete work for another person (the host), where the provider pays the worker for that work, directly or indirectly.
South Australia Government
Consumer and Business Services
The purpose of the labour hire licensing scheme
The licencing scheme has been restricted to labour hire companies that operate in sectors where workers are more likely to be exploited because the work they do is labour-intensive and low-skilled.
The Labour Hire Licensing Act 2020 (the Act) aims to:
protecting workers from labour hire service providers’ exploitation;
ensure that labour hire companies uphold their obligations to the workers they offer in the workplace;
improve the honesty of the sector; and
encourage moral behaviour in the sector of labour hire.
In South Australia, you must be either licenced or have applied for a licence. labour hire licences are valid for 12 months and must be renewed on an annual basis. Labour hire is where:
your company provides workers for someone else’s business;
you have an agreement with your employees to supply them to another person to do work; and
your company pays the workers you provide to the other person, either in full or in part. This is true even if the payment is only for lodging or other expenses.
Licensing requirements
Requirements to obtain a licence are that:
An individual or a company can apply for a labour hire licence.
A letter from a certified accountant that is no older than six months demonstrates that your business (or you yourself) is solvent; and
There must be at least two responsible people running the labour hire company. As proof that you or the accountable members of your organisation have never been convicted of a severe crime, you can be asked to present a police clearance check.
Applicants for a labour hire licence must meet certain criteria. If you apply on behalf of a company, at least one of the directors must be knowledgeable. In this case, one of the four knowledge requirements must be met. Below are several examples:
You’ve completed courses in small business risk management, as well as compensation and employee benefits.
A bachelor’s degree in economics, business, accounting, or the humanities is required.
Your company is traded on the Australian Securities Exchange.
You have the authority to hire workers from other states.
Industries that require a labour hire licence
Labour hire providers must be licensed if the workers they provide undertake the following types of work:
Labour hire providers are broadly defined as a person (individual or business) that, while carrying out business, supplies a worker to complete work for another person (the host), where the provider pays the worker for that work, directly or indirectly.
You’ll require a licence regardless of whether the workers are under your or the host’s control, a licence is necessary if your business delivers workers directly to someone else (the host) as part of the host’s business or commercial project.
If your business indirectly engages one or more agents or intermediaries to transfer workers to a host to carry out tasks associated with the host’s business or commercial undertaking.
If you and your staff have an arrangement allowing you to offer them directly or indirectly to another individual (the host) to carry out tasks for the host’s business or commercial undertaking.
If the personnel you provide to the host are paid in full or in part. eg even if payment is only for accommodation.
Who doesn’t need a licence?
Businesses do not need a licence if the following conditions are met:
If they source the workers from the labour hire provider, they are acting as an intermediary or agent (i.e., they have a contract with a company to supply workers, but they do not have a relationship with the workers; as a result, they obtain the workers from a different company, a labour hire provider, who does have a relationship with the workers and can supply the workers to other companies and pay them directly). examples of intermediaries.
Sole proprietorships where the owner is the only employee and shares in the management and profits of the business.
Operate as a partnership with no more than two people, and the employee provided to another company is also a shareholder in that company, sharing in management or earnings.
Functions as a company (body corporate) with a maximum of two directors, and the worker provided to another business is a director of the company who shares in management or earnings.
Obligations of providers, agents and hosts – labour hire
Labour hire providers
Labour hire providers must provide the host with:
their labour hire licence number
their name and contact details
the name and contact details of the responsible person for the licence.
Labour hire providers must provide each worker with:
For the host to obtain this information, it is the responsibility of the agents or intermediaries involved in the agreement to make sure it is communicated along the chain to all parties. When sourcing workers from a labour hire provider and delivering them to a host, agents and intermediaries must give the host the labour hire providers:
licence number
name and contact details
name and contact details of the responsible person for the licence.
Hosts
A business (the host) must make sure that the other business (labour hire provider) has a valid labour hire licence before asking that the labour hire provider provide them with workers.
Penalties apply to the host if they use an unlicensed labour hire provider.
If the host requests workers from an agent or intermediary, they should expect the agent or intermediary to provide the contact information and licence number of the labour hire provider who supplied the workers. Providers, agents (intermediaries), and hosts may face penalties if these requirements are not met.
Other penalties and offences
Significant penalties apply if you:
provide labour hire services without being licensed
engage an unlicensed labour hire provider.
Penalties also apply if:
a labour hire provider does not provide licence particulars to either the agent or the host (whichever is applicable)
an agent/intermediary does not provide licence particulars to either another agent or to the host (whichever is applicable).
Offence
Maximum penalty
Providing labour hire services without a licence
Individual/business: $140,000 Company: $400,000
Advertising labour hire services whilst unlicensed
Maximum penalty: $30,000
A host entering into an arrangement with an unlicensed labour hire provider
Individual/business: $140,000 Company: $400,000
Entering into an avoidance arrangement
Individual/business: $140,000 Company: $400,000
Required information about the licence holder not provided to the host
$4,000
Required information not provided to labour hire workers
$4,000
Consumer and Business Services (CBS) SA
Apply for a labour hire licence
Information about labour hire licences, including applying for a licence and other responsibilities of labour hire providers, is available on the Labour hire licence page on the SA.GOV website.
The labour hire licensing scheme applies to high-risk industries where particular types of work are undertaken. Information and requirements to get a labourhire licence/registration. Labourhire services must be licensed with Consumer and Business Services (CBS). Here is the application link
You will need the following documents to proceed with the lodgement of your application
A National Police Clearance (NPC) for all responsible persons and directors;
A letter from a chartered accountant certified practising accountant or IPA public accountant confirming that you are solvent. The letter date must not be any older than 6 months of your licence application.
ACT Labour Hire
On 27 May 2021, the ACT introduced a new licencing program for labour hire providers that will enhance worker protection and encourage ethical business practices. All labour hire providers doing business in the ACT are required by the Labour Hire Licensing Act 2020 to get a licence by or on 27 November 2022.
WorkSafe ACT
Purpose of the labour hire licensing scheme
WorkSafe ACT is responsible for administering the Labour Hire Licensing scheme, issuing licences, and conducting ongoing compliance and enforcement activity. If you aren’t sure if you need a licence, you should seek independent legal advice, and/or contact myWorkCover for assistance.
Not sure if you need a licence? Run through WorkSafe ACT interactive doc and view information videos:
Protecting workers from labour hire service providers’ exploitation is one of the goals of the Labour Hire Licensing Act 2020 (the Act)which includesthe following:
Ensure that labour hire companies to uphold their obligations to the workers they offer in the workplace;
improve the honesty of the sector; and
encourage moral behaviour in the sector of labour hire.
Your obligations to holding a Labour Hire Licence
According to Section 25 of the Labour Hire Licensing Act 2020, WorkSafe ACT may ask for more information regarding your application. If the requested information is not submitted within the time frame, your application may be rejected. If you are given a licence, you will receive an email notification and a copy of your licence.
A change in circumstance must also be reported within 7 days of its occurrence. A change in circumstances includes the following:
a change to any answers provided on the suitable person test
a change to your name, business name or contact details
if you begin to provide accommodation
supplying workers who hold visas.
From 27 November 2021, WorkSafe ACT will begin enforcing the duties under the Labour Hire Licensing Act 2021. This will include audits, investigations, and legal proceedings for those who do not comply.
Desktop audits
Inspectors may request documents to prove compliance with the Act or licencing conditions before visiting the licensee or a location where labour hire is offered.
In the beginning, inspectors will run preventative campaigns and address complaints via a desktop audit. This may include:
verifying the information supplied by a licensee, and
ensuring compliance with any licence conditions.
Formal investigations
Before launching an official enquiry, WorkSafe ACT aims to resolve non-compliance. WorkSafe ACT will use all reasonable efforts to complete a formal investigation within three months, but complex matters may take longer. Following receipt of a letter of regulatory action, the licensee has 14 days to respond in writing to the Labour Hire Licence Commissioner. Inspectors have the right to demand documentation before they visit a licensee or a location where labour hire is offered to show that the licensee is in compliance with the Act or any licencing requirements.
The Department of Labour Hire employs licencing inspectors who conduct audits, monitor providers’ adherence to the Act, and investigate potential violations. To assist compliance efforts, inspectors have the authority to impose conditions, suspend, or revoke a licence. They can also demand documented proof from providers and hosting companies. Evidence of a violation of another workplace rule or regulation may be forwarded to the appropriate authority.
Workplace inspections
Labour hirers, in addition to labour hire providers, may be audited as part of a complaint investigation or as part of a compliance audit programme. Inspectors will use their authority to determine your compliance and obligations under the labour hire licencing scheme. Both a licence suspension and monetary fines are options.
Avoidable arrangement
This is an arrangement designed to avoid the requirement to use a labour hire provider or for a labour hire provider to be licenced. It is an offence if the person knows, or should reasonably know, that it was an avoidance arrangement.
Legal proceedings
Where a matter is unresolved after audit and formal investigations, consideration will be given to referring it to the ACT Director of Public Prosecutions.
Who requires a licence?
Labour hire providers are broadly defined as a person (individual or business) that, while carrying out business, supplies a worker to complete work for another person (the host), where the provider pays the worker for that work, directly or indirectly.
WorkSafe ACT
The scheme is applicable to all businesses that provide labour hire in the ACT, those who hire workers outside the ACT, and those based outside the ACT but offering labour hire in the ACT. You need to register a licence in the ACT even if you already hold one from another state or territory. There are laws and regulations specific to each state and territory.
Do ‘host’ organisations who hire labour hire workers need a licence?
Businesses that hire labour hire workers are not required to have licences, but they should only work with companies that do. Hosts who use unlicensed providers may face financial penalties.
Who is exempt?
These workers do not require their employer to hold a labour hire licence if they are:
public servants (a public servant is defined as someone who is employed in the public service which is defined as the ACT public service).
Secondees– who are employed under genuine secondment arrangements engaged on a temporary basis for the provider and not engaged on a supply basis.
In-house workers – An ‘in-house’ employee is defined as an individual who:
is engaged as an employee by the provider on a regular and systematic basis
has a reasonable expectation the employment with the provider will continue
primarily performs work directly for the provider other than as a worker supplied to another person to do work for the other person
a person who is employed by an entity, and only supplied to work within a single business (this usually applies to larger businesses with a ‘group’ structure)
a director or senior manager of a corporation – where the corporation has not more than 2 directors and that person is the only person who is supplied by the corporation to undertake work for another entity.
Penalties and offences
Labour hire providers
If you engage in labour hire services without a licence, financial penalties may apply which can be up to a maximum of $128,000 for an individual and up to $2,430,000 for a corporation.
Labour hirers (host employers)
While labour hire companies are not required to obtain licences, only licenced companies should supply workers to other companies.
Labour hirers must only use licenced labour hire providers, according to the 2020 Labour Hire Licensing (the Act). From 27 November 2021, you must verify the labour hire provider’s current ACT labour hire licence and obtain proof from the provider. Contact myWorkCover if you need assistance.
If you utilise labour hire services from an un-licensed provider you may face regulatory action, with the maximum financial penalty for a corporation currently being $2,430,000.
WorkSafe ACT
Labour hirers should be aware that they:
Must not enter into an avoidance arrangement
Should report labour hire providers who are avoiding their legal obligations
Must comply with their legal obligations by only engaging with licensed labour hire providers
Check labour hire provider is licensed in the ACT, and
The hirer/host may be subject to inspections by WorkSafe ACT inspectors.
Apply for a licence
Complete the online application form via WorkSafe ACT website. Refer to the application guide and questionnaire for more information to help you prepare for the application process.
Each section of the application form must be fully completed, with all required documentation uploaded, before you can progress to the next page of the application. You will need to review and complete:
review all the information on the application guide before commencing this form. There are forms you must complete, and documents you must submit, as part of the application process. It is recommended you to have all these documents available at the beginning.
When you apply you will need to:
provide details of your company, e.g. ABN, trading name, business address, etc
provide details of industries you supply labour hire workers to.
Provide details of Directors and influential people in your company
show that the applicant and other persons nominated on the application are suitable people to provide labour hire services
show that you can comply with State and Commonwealth laws relevant to running a labour hire business and employing workers
show that the labour hire business is financially viable
pay an application fee.
Queensland Labour Hire
The Labour Hire Licensing Act 2017 (the Act) commenced on 16 April 2018. The Act establishes a mandatory licensing scheme to protect labour hire workers and support responsible labour hire providers.The scheme requires all labour hire providers in Queensland to be licence. This includes interstate or international labour hire companies that supply workers to Queensland.
Labour Hire Licensing Queensland
All labour hire providers doing business in Queensland must get a licence under the Labour Hire Licensing Act 2017 (the Act). Users of labour hire services are only permitted to work with authorised labour hire providers.
Recruitment and job placement
Workplace consultants and services for recruitment and permanent placement are not covered by the labour hire licencing scheme because they are not labour hire services. Additional illustrations of arrangements for non-labour hires are shown below.
Labour Hire Licensing Queensland
Labour hire licensing laws
A required labour hire licencing system is established by the Labour Hire Licensing Act 2017 (the Act) and the Labour Hire Licensing Regulation 2018 to prevent labour hire employees from exploitation and to improve the integrity of the Queensland labour hire industry. The Labour Hire Licensing Compliance Unit imposes severe fines for breaches of the Act (LHLCU).
Key requirements include:
Labour hire providers to need to be licensed to operate in Queensland.
People who engage labour hire providers must only engage licensed providers.
Six-monthly reporting by labour hire providers on their labour hire activities.
Labour Hire Licensing Compliance Unit (LHLCU)
The Labour Hire Licensing Compliance Unit (LHLCU) is responsible for regulating and ensuring compliance with the licensing scheme. The LHLCU:
promotes understanding and awareness of rights and obligations under the licensing scheme
approves and issues licences
monitors compliance, including undertaking audits
investigates alleged contraventions
works with relevant agencies to resolve complaints and alleged offences
builds relationships with those involved in labour hire in Queensland
reports on its activities including publishing regular updates.
How LHLCU inspect and investigate
LHLCU work with other State and Commonwealth Government departments to share information and conduct joint compliance activities as permitted by law. As all decisions made are evidence-based.
A formal investigation may also be started in response to significant allegations or issues regarding:
unlicensed activity
avoidance arrangements
fitness and propriety
failure to provide six-monthly reports
non-renewal of a licence
referring to an alleged breach of the relevant law.
During an audit or investigation our inspectors may:
inspect your workplace
interview persons (e.g. workers)
seize items of evidence
require certain documents to be provided (such as worker’s terms and conditions of employment or wage books).
What happens after an audit or investigation?
A licence holder’s licence may be revoked or suspended depending on the situation if an audit or investigation indicates that they breached the Act or other relevant laws. The business must stop employing right away if this occurs. The LHLCU may also suggest filing a lawsuit. If an inspector gathers enough evidence and determines that taking legal action to remedy the non-compliance issue is in the public interest, legal action may be pursued.
To highlight the effects of non-compliance and the significance of workplace fairness, the results of successful prosecutions for offences may also be made public. To handle the issue of noncompliance without having to shut down their business, a licensee may be offered education or have licence conditions imposed in less serious situations.
Who is a labour hire provider?
A labour hire provider is a person (individual or business) who, as part of carrying on a business, supplies labour hire workers to do work for another person or business (the labour hire user).The workers are paid by the labour hire provider.
Labour Hire Lincensing Queensland
Examples of labour hire providers include:
a contractor who supplies workers to a farmer or fruit grower to pick produce for the farmer or grower
a group training organisation or principal employer organisation that supplies an apprentice or trainee to a host employer
an employment agency that on-hires temporary administration staff to a business.
A ‘host employer’ is a business that uses labour hire workers supplied by a labour hire agency or contracts with a Group Training Organisation (GTO) for the training of apprentices or trainees
Workpace Health and Safety Queensland
A labour hire user (the host) is any individual or company who contracts with a labour hire provider to provide them with workers. This involves using an intermediary to find workers from a labour hire service. In this case, both the intermediary and the person who hires them are labour hire users.
‘Host employer’ and ‘client’ are two other terms that may indicate a user of labour hire services. If you have a worker or workers performing services for you or your company but are not direct employees, you should carefully consider whether these arrangements are labour hires.
Users of labour hire services must only use licensed labour hire providers. It is an offence to enter into:
an arrangement with an unlicensed labour hire provider
avoidance arrangements.
These offences have a maximum penalty of three years imprisonment or a fine. The scheme helps users of labour hire and workers find a licensed labour hire provider through the labour hire licensee register.
Recruitment and permanent placement services, as well as workplace consultants, are not considered labour hire services and do not fall under the labour hire licencing scheme.
The following additional workers are excluded from licencing requirements. These individuals are not regarded as labour hire employees for the purposes of the Act.
A high-income employee – earns an annualised income of more than $161,00 per annum (index) and is not covered by an industrial award or agreement. Annualised income means a rate (hourly, weekly, etc) that, when converted to an annual income, is more than the amount of the high-income threshold
An employee who is supplied within a group of entities – that carry on business collectively as one recognisable business (e.g. supply by a service/employing entity within a corporate group)
An ‘in-house employee’ – who temporarily works for another person or business. An ‘in-house employee’ is defined in the Labour Hire Licensing Regulation 2018. This category covers, for example, secondment
Executive officers of corporations – where they are the only person supplied to do work.
Volunteer workers
Students are placed in work experience positions.
In addition, the following arrangements are not labour hire services merely because they are:
a private employment agent under the Private Employment Agents Act 2005 (Qld)
a contractor who enters into a contract to carry out construction work within the meaning of the Building and Construction Industry Payments Act 2004 (Qld) engaging subcontractors to carry out the work.
Who needs a licence?
You should think about if you are acting as a labour hire provider and require a licence if you give a worker or workers to another company or individual to perform work.
Labour hire companies to provide workers to another company or individual (the labour hire user). The labour hire provider is required by the contract to pay the employees for the tasks they complete (though this can be an indirect obligation, in the case of on-supply of workers). It includes both contingent and outsourced labour.
When is a licence required?
The Act sets out what is meant by labour hire provider, labour hire services and labour hire worker.
The Act provides examples of labour hire providers including:
a contractor who supplies workers to a farmer or fruit grower to pick produce for the farmer or grower
a group training organisation or principal employer organisation under the Further Education and Training Act 2014 that supplies an apprentice or trainee to an employer
an employment agency that on-hires temporary administration staff to a business.
How much your accident insurance policy costs will depend on several things. As a labour hire company, your premium is determined by:
the wage information you supply
industry rate – your clients’ business activities which is used to calculate the risk and performance of each industry
your claims experience (the cost of any injury claims against your business)
Models for premium calculation
The wage amount you declare determines which model will be used to calculate your premium.
If you pay wages of $1.5 million or less
Your policy premium is calculated using a simplified model. You are assigned a rating based on your claims costs from the previous fiscal year. The higher your rating and the lower your premium, the safer your workplace and the more proactive you are in managing claims.
WorkCover Queensland
If you pay wages more than $1.5 million
This model will calculate your premium based on an experience-based rating (EBR). The following factors will be considered when calculating the premium:
*your wages and industry rate from each workplaces (host employers),
*the performance – that is your claim experience (cost of claims against your business),
*a total of 4 years’ claims costs will be factor into calculating your premium – statutory claims costs for the previous 3 years and common law claim costs for the 1 year preceding (before) those three years.
A circumvention or avoidance arrangement is one that aims to get around or avoid the requirement for a licence to supply labour. If a person knows—or should have known—that the arrangement is an avoidance plan, they have committed the crime.
An example:
When a user of labour hire engages into a labour supply arrangement and refers to the arrangement in legal documents as something other than labour hire, the arrangement is considered an avoidance arrangement.
Labour Hire Lincensing Queensland
The scheme imposes significant penalties to deter labour hire providers and users from making agreements that benefit one or both parties while undermining the integrity of legal labour hire agreements.
Relevant laws
As a condition of holding a labour hire licence, the Act requires that the licensee complies with all applicable laws. LHLCU collaborates with other law enforcement agencies to investigate alleged violations. If a provider is found to have violated these laws, the LHLCU may suspend or cancel the provider’s licence. See examples of relevant laws.
By issuing a licence, the scheme recognises responsible labour hire providers and encourages high standards by requiring all labour hire providers to continue to meet their legal obligations. Non-compliant labour hires companies facing a number of penalties. Fines, licence suspension or cancellation, and imprisonment are among the penalties.
Failing to comply with these obligations may result in fines and/or a review of a licence status, including suspension or cancellation of the licence, or imposing conditions on the licence.
Labour Hire Licensing Queensland
The most serious offences for labour hire providers are:
providing labour hire services in Queensland without holding a licence
entering into avoidance arrangements.
Licensees also have other general obligations including:
compliance with legal obligations under relevant laws
providing 6 monthly reports on their activities
reporting prescribed changes in circumstances within 14 days
producing a copy of a licence if asked by an inspector, worker or another person
not selling, transferring or hiring out a licence to another person.
These offences have a maximum penalty of three years imprisonment or a fine.
Note: This is not an exhaustive list of offences and is subject to change in legislation. The following is based on penalty unit value from 1 July 2020.
Labour Hire Lincensing Queensland
Offence
Maximum penalty
Providing labour hire services without a licence.
Corporation – $413,550 (3000 penalty units)
Individual – $142,537 (1034 penalty units or three years imprisonment).
Advertising, or in any way representing, that a person provides or is willing to provide labour hire services without a licence.
$27,570 (200 penalty units).
Entering into an arrangement with a provider who does not hold a licence to provide labour hire services.
Corporation – $413,550 (3000 penalty units).
Individual – $142,537 (1034 penalty units or three years imprisonment).
Entering into an arrangement with another person (an avoidance arrangement) for the supply of a worker, if the person knows, or ought reasonably to know, the arrangement is designed to circumvent or avoid an obligation imposed by the Labour Hire Licensing Act 2017.
Corporation – $413,550 (3000 penalty units).
Individual – $142,537 (1034 penalty units).
Failing to comply with reporting obligations within 28 days after a reporting period for the licensee ends.
$27,570 (200 penalty units).
Failing to provide an inspector, worker or another person with a copy of the licensee’s licence on request.
$13,785 (100 penalty units).
Transferring, selling, disposing of, lending or hiring out a licensee’s licence to another person.
$27,570 (200 penalty units).
Failing to give the Chief Executive notice of a prescribed change in circumstances of the licensee within 14 days after the change.
$27,570 (200 penalty units).
As a client, failing to notify the Chief Executive of an avoidance arrangement as prescribed in section 90(2).
$27,570 (200 penalty units).
Providing false or misleading information to an official.
$13,785 (100 penalty units).
Labour Hire Licensing Queensland
To obtain a licence applicants must demonstrate that the relevant people are fit and proper to provide labour hire services
People that need to be fit and proper are:
each applicant
each proposed nominated officer
each executive officer (if the applicant is a corporation).
For partnerships, all partners are applicants and must be fit and proper
a history of, and ability to, comply with relevant laws.
Note: A licence holder must not transfer, sell, dispose of, lend or hire out their licence to another person or business.
Labour Hire Licensing Queensland
Guide to applying for a licence
You must still apply for a licence in Queensland even if you already have one from another state or territory or have a similar accreditation from another scheme. However, your fitness and propriety, financial sustainability, or compliance with applicable legislation may be considered in light of your licence or accreditation.
Note: A person or business cannot apply for a labour licence if they have had:
*a labour hire licence cancelled within the last two years,
*an application for a labour hire licence refused within the last three months.
Labour Hire Licensing Queensland
Applying online
To apply for a licence you will need to register to create an account and provide:
the applicant’s or authorised delegate’s contact details. For authorised delegates, a signed authorisation form must be retained by the business and produced if required by the Office of Industrial Relations
business details including ABN, entity name and trading name.
Once you have an account you can sign in to apply for or renew a licence.
Western Australia (Employment Agency Licence is required)
While Labour Hire legislation is still being debated, the Employment Agents Act of 1976 requires all individuals, partnerships, or corporations that conduct business as employment agents to register for an Employment Agency Licence.
The Employment Agents Act of 1976 mandates that any individual, partnership, or corporation (including businesses and other incorporated organisations) conducting business as an employment agent obtain a licence. Booking agencies, babysitting companies, housesitting agencies, and cleaning agencies are all included, as well as conventional employment agencies and employment brokers. The Act forbids the Commissioner for Consumer Protection from granting a licence in a partnership’s or corporation’s name. In these situations, the partnership or company’s licence must be held by a natural person (an employee, an officer of a body corporate, or a member of a firm).
Any of the following counts as “doing business” as an employment agent:
It doesn’t matter if you place people in jobs and get paid an “entrance fee,”
a regular contribution, or
any other fee from the employer for your services.
You get paid for helping people find work or for finding employees for other people or businesses (whether you do this full-time, part-time, or only occasionally).
Exemptions
The following are specifically exempted from the need to be licensed. Other exemptions from the Act can be granted by an Order in Council made by the Governor.
newspaper publications;
labour hire companies (under discussion)
Disability Employment Service Providers who are engaged under the Disability Services Grant Agreement with the Commonwealth. (This agreement falls within the Employment Agents Exemption Order 2002)
people licensed under other Acts of Parliament to handle the employment of seamen; and
State or Federal Government departments or instrumentalities.
Guidelines for labour hire employers
Labour hire workers, also known as “on hire” workers, are employed and paid by labour hire companies but work for clients known as host employers.
WorkCover WA
Labour hire employees, also known as “on hire” employees, are paid by labour hire companies but work for host employers. Labour hire companies must obtain workers’ compensation insurance for any employees they supply to host companies, as well as provide accurate statements for premium assessment purposes. They must also compensate and support injured workers as they seek new employment. These recommendations clarify the obligations of labour hire employers under workers’ compensation laws.
The information presented in this post, article or book is intended solely for informational and educational purposes and should not be considered legal advice. It does not express specific opinions on individual cases. Before taking any action based on the information provided, it is strongly advised to seek additional professional advice. This information should only be used to gain a better understanding of how Workers’ Compensation insurance functions and is purely illustrative. My WorkCover Solutions Pty Ltd disclaims any liability for any losses or damages resulting from the use or reliance upon the information provided. The information in this article is believed to be accurate as of its publication date. However, please note that changes in applicable laws may affect its accuracy. This article provides general information and does not take into account any specific person’s circumstances. It may contain information about Workers’ Compensation insurance regulations in your State or Territory. To ensure compliance with legal obligations, it is recommended to refer to the current legislation in force in the State or Territory where your business operates. Up-to-date legislation can be found on the respective WorkCover Authority websites for each state or by contacting myWorkCover for updated information.
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[…] Employers’ New Labour Hire Obligations – State-by-State Guide and Update […]
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