Labour Hire Licences In Victoria: Employer Compliance

Supplying on‑hire workers to businesses in Victoria can be a rewarding way to grow a service-based company. It’s also a highly regulated space with strict licensing, safety and workplace standards designed to protect workers and create a fair market.

If you’re planning to launch or scale a labour hire business in Victoria, you’ll need to understand when a licence is required, how the application works, and what ongoing employer compliance looks like in practice. With the right setup and support, you can meet your obligations confidently and build a strong reputation with host clients and workers.

Below, we break down the Victorian labour hire licensing regime, step through the application process, and cover the day‑to‑day compliance duties every licensed provider should have on their radar.

What Is Labour Hire In Victoria?

Labour hire (also called on‑hire) is when your business supplies workers to another business (the host) and those workers do work in and as part of the host’s business, usually under the host’s direction on the ground. Your business pays the workers and invoices the host for the supply.

In Victoria, the Labour Hire Licensing Act 2018 (Vic) establishes a mandatory licensing scheme administered by the Labour Hire Licensing Authority (LHA). The scheme aims to prevent worker exploitation and ensure compliant pay, safety and employment practices across the industry.

In simple terms: if you supply workers to operate within a host’s business in Victoria, you’ll generally need a Victorian labour hire licence unless a narrow exemption applies.

Do You Need A Labour Hire Licence In Victoria?

Most businesses that supply workers to hosts in Victoria must be licensed. This applies across many sectors, including construction, horticulture, logistics, manufacturing, cleaning, hospitality and professional services.

• You must be licensed if your business supplies workers to another business, those workers perform work in and as part of the host’s business, and your business pays the workers (as employees or independent contractors).
• It is an offence for a host to use an unlicensed provider. Hosts are expected to check the public register to confirm licence status before engaging a supplier.

Practical examples where a licence is typically required include:

• A construction on‑hire firm supplying qualified trades to a builder to work on a project site under the builder’s day‑to‑day instruction.
• A cleaning agency supplying teams to an office facilities company, where the workers perform cleaning as part of the host’s operations.
• A seasonal labour provider supplying pickers and packers to a horticulture business during harvest.

Examples that may fall outside the scheme include a genuine sole trader who supplies only their own labour and does not supply anyone else; however, as soon as you start supplying additional workers, licensing requirements can apply.

There are specific statutory exemptions (for certain secondee arrangements and internal group staffing in limited scenarios), but they are narrow and fact‑dependent. If you’re unsure, it’s best to get advice before you start supplying workers.

How To Apply For A Labour Hire Licence (Step‑By‑Step)

The LHA assesses applications closely. Expect to provide detailed information about your business, responsible persons and compliance systems. Here’s a practical roadmap.

1) Get Your Business Setup In Order

Decide on a structure (sole trader, partnership, trust or company), obtain your ABN, and (if applicable) register your business name. Many owners choose a company for limited liability and scalability; if you’re heading down that path, consider getting help with your company set up early so your records are clean from day one.

Prepare a simple operations plan covering recruitment, onboarding, rates and invoicing, pay and super, OHS processes, and complaint handling. The LHA wants to see that you understand your obligations and have practical systems in place.

2) Identify “Fit And Proper” People

Directors, partners and key personnel must satisfy a “fit and proper person” test. Be ready to disclose criminal history, prior corporate roles, compliance history and any relevant regulatory action. Gather identity documents early to avoid delays.

3) Evidence Your Legal And Financial Compliance

You’ll be asked to confirm and evidence compliance in areas such as:

• Pay and conditions under the Fair Work framework, including any relevant Modern Awards or enterprise agreements. If you’re unsure about classification and rates, consider support with Modern Awards or broader award compliance.
• Superannuation, PAYG withholding and other tax obligations.
• Occupational health and safety (OHS) duties under Victorian law, including risk management, induction and incident reporting.
• Workers compensation (WorkCover) insurance appropriate for your workforce.
• Right to work checks where you engage visa holders.

Past non‑compliance, wage underpayments or unpaid superannuation can affect your application, so it’s important to rectify issues and document improvements before you apply.

4) Lodge The Application Online

Submit your application via the LHA online portal with supporting documents and the application fee. The Authority may request further evidence such as sample payslips, timesheets, policy documents or training records. Respond promptly to keep the process moving.

5) Don’t Supply Workers Until You’re Licensed

Outside of limited historical transition periods, you must not supply workers in Victoria unless you hold a current labour hire licence. Plan your launch dates and client commitments around realistic approval timeframes.

6) Keep Your Licence Current

Licences are granted for a finite term (up to three years) and require ongoing reporting. Diary your renewal dates, maintain your compliance systems, and be ready for audits or information requests.

Your Ongoing Compliance Obligations

Holding a licence is the start, not the finish. Strong day‑to‑day compliance is critical for protecting workers and your business.

Employment Law And Correct Pay

Pay workers correctly under the applicable Modern Award or agreement, apply penalty rates and loadings where required, and meet the National Employment Standards (NES). If you use independent contractors, make sure the engagement is genuine to avoid sham contracting risks. For structuring workforce engagements the right way, many providers seek targeted employee vs contractor advice.

Victorian OHS (Work Health And Safety) Duties

In Victoria, the OHS framework (under the Occupational Health and Safety Act 2004 (Vic)) applies. You share safety responsibilities with the host and must take reasonable steps to ensure your on‑hire workers’ health and safety-assessing host worksites, confirming inductions and supervision, managing risks, and recording and reporting incidents.

Workers Compensation And Insurance

Maintain the right WorkCover policy for your workforce and ensure your hosts have appropriate insurance for their operations. Review your coverage when you expand into new sectors or add different roles.

Annual Reporting To The LHA

Licensed providers must lodge annual reporting statements, keep records, and notify the Authority of certain changes (for example, new directors). Missing deadlines or providing misleading information can lead to suspension or cancellation.

Privacy And Data Handling

If your business is an APP entity under the Privacy Act 1988 (Cth)-for example, due to annual turnover over $3 million or because you fall within a specific category-you must comply with the Australian Privacy Principles. In that case, it’s standard to publish a clear Privacy Policy and adopt internal procedures for handling personal information. Even if you are a small business not legally required to have one, adopting privacy practices and a short policy is good governance and often expected by larger host clients.

Tax, Super And Payroll

Stay on top of PAYG withholding, superannuation and BAS lodgements, and keep accurate payroll records. These are core compliance areas the LHA may review. For detailed tax or accounting advice, speak with a registered tax professional (legal information here is general in nature).

Contracts And Clear Commercial Terms

Use written agreements with hosts and your workforce to set expectations around rates, scope, safety responsibilities, dispute resolution and variations. This reduces disputes and evidences your compliance framework if the regulator calls.

What Legal Documents Should You Prepare?

The right documents help you run efficiently, reduce risk and demonstrate compliance. Consider the following as a starting point (tailored to your business model and sectors):

• Labour Hire Services Agreement: Terms with your host clients covering rates and charges, role descriptions, minimum hours, replacements, safety cooperation, timesheet verification, liability and termination.
• Employment Contract: Written terms for employees (casual, part‑time or full‑time) covering duties, pay, hours, leave, confidentiality and termination. If you need a template tailored to labour hire, see Employment Contract.
• Contractor Agreement: If you legitimately engage independent contractors, set clear scope, rates, control, equipment and insurance responsibilities to reflect a genuine contractor relationship.
• Workplace Policies: OHS procedures, incident reporting, fitness for work, anti‑bullying/harassment, and grievance handling-often compiled in a staff manual. Many providers also adopt a general workplace policy pack.
• Privacy Documentation: A public‑facing Privacy Policy (if required or as best practice) and internal processes for collecting, storing and sharing personal information and right to work checks.
• Website Terms & Conditions: If you accept applications or enquiries online, set user rules, disclaimers and IP terms with Website Terms and Conditions.
• Employment Systems: Robust onboarding, payroll and timekeeping processes to evidence correct pay and super (these systems are not contracts, but they are essential compliance tools).
• Founder Documents (if applicable): Where there are multiple owners, use a Shareholders Agreement to set decision‑making, equity, exits and dispute procedures, and adopt an appropriate company constitution if you operate through a company.

Not every provider will need every document on day one, but putting the core agreements and policies in place early will make your licence application stronger and your operations smoother.

Key Takeaways

• If you supply workers to perform work in and as part of a host’s business in Victoria, a labour hire licence will usually be required under the Labour Hire Licensing Act 2018 (Vic).
• Before applying, get your structure, ABN, insurance, payroll and OHS processes in order, and be ready to demonstrate compliance with Modern Awards, superannuation and right to work checks.
• Do not supply workers until your licence is granted; hosts may be penalised if they engage unlicensed providers, so they will check your status.
• Ongoing compliance includes correct pay, Victorian OHS duties, WorkCover insurance, annual reporting to the LHA and solid record‑keeping.
• Protect your business with a Labour Hire Services Agreement, tailored Employment Contracts, contractor terms, workplace policies and, where relevant, a Privacy Policy and Website Terms.
• Sorting out complex issues like award coverage, contractor status and host safety responsibilities early-often with professional help-will save you time, cost and risk as you grow.

If you would like a consultation on starting or running a compliant Victorian labour hire business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.