Labour hire law changes 2026

To further address unlawful conduct and improve integrity, the legal definition of labour hire has been broadened in Victoria’s construction industry.

Following consultation undertaken by Industrial Relations Victoria, these laws have now been finalised and were gazetted on 27 October 2026.

The new Regulations apply to Victoria’s construction industry from 18 January 2027.

The broader laws cover the following activities on Victorian Government-funded construction projects with a total cost over $50 million:

• traffic management
• site security
• concreting
• crane operating.

Under the new Regulations, companies performing the prescribed activities will require a labour hire licence and it will be unlawful for host businesses to engage an unlicensed company to perform these activities. Significant penalties apply for using or providing unlicensed labour hire services.

For more information on the changes, including the prescribed projects and activities, visit New Licensing Obligations for the Construction Industry.

From 1 October 2026, the general definition of labour hire has changed to focus on whether labour supply is involved.

In most cases, this does not affect when a labour hire licence is required, but makes clearer that businesses require a licence to supply labour anywhere in a supply chain.

Within supply chains, any arrangement that has the character of labour supply will require the provider to hold a labour hire licence. This includes ‘bare intermediary’ companies – those that do not directly employ labour hire workers, but which on-supply workers employed by other companies.

Under the new definition, a labour hire provider is an individual or organisation that:

• enters into an arrangement with another person where the character of that arrangement is wholly or principally the supply of labour by the provider to that person. Under such arrangements, the provider supplies workers to perform work for that person and is responsible for paying the workers, whether directly or through one or more intermediaries
• enters into an arrangement wholly or principally to recruit or place workers to provide labour for another person and also provides accommodation for those workers for some or all of the period they perform that labour
• enters into an arrangement wholly or principally to recruit or place workers as independent contractors for another person and manages the performance of those workers’ contracts.

There is an inherent increased risk of non-compliance in complex supply chains, due to the arrangements not always being transparent to the ultimate host business using the workers or to regulators.

This change is aimed at improving accountability of hosts of labour hire services and providers using subcontracting arrangements, to reduce the risk of worker exploitation.

Where complex supply chains exist, the changes will reduce ambiguity of licensing obligations and ensure focus on the true nature of arrangements.

LHA now considers new factors to determine whether a person is fit and proper, including character, professionalism and integrity.

Businesses also need to declare whether a nominated officer or relevant person is under the control of, or substantially influenced by, another person or body corporate not already listed as a relevant person.

This may include:

• a shareholder or investor in a business
• an external adviser whose guidance is routinely followed
• the holding company of a subsidiary, where there is a relationship of control or influence under the Corporations Act 2001 (Cth)
• a spouse or relative who exercises substantial influence over a business.

A business will need to provide the contact details of the person or body corporate that they are under control of, or substantially influenced by; and a description of the nature of the relationship and how they influence relevant persons or the business.

For example, this may be a non-director owner or a person acting as a shadow director. For organisations, the ABN and ACN or ARBN are also required. If a person or body corporate controlling or influencing the applicant or its relevant persons is not fit and proper, LHA may refuse the application.

LHA may conduct checks to identify undisclosed persons or body corporates that are controlling or influencing the business or its relevant persons. Failure to disclose may result in licensing action, including refusal or cancellation of a licence.

Licence holders and applicants are assessed on the capacity of their business, and its decision-makers, to comply with the Labour Hire Licensing Act 2018 (Vic) through licence transactions like applications or renewals.

Depending on the nature of the business and individual circumstances, new information that businesses will supply to LHA in key transactions may include:

• information and supporting documents to determine the fit and proper person status of the applicant, the nominated officer and all relevant persons
• details of any persons that control or influence the licence holder
• a declaration of compliance with an expanded list of relevant laws
• a declaration that the licence holder is financially viable, with supporting information and documents
• tax and superannuation information relating to independent contractors
• evidence of approval to engage apprentices or trainees from VRQA, if relevant
• details of any cash payments to workers, any deductions from worker payments and the address of any accommodation provided to workers. 

An overview of how these changes affect specific transactions is available on the relevant page:

• Apply for a labour hire licence
• Renew a labour hire licence
• Annual reporting

LHA recommends seeking high-quality professional advice relevant to your business as needed.

LHA now has more scope to assess compliance with relevant laws to make licensing decisions – including to refuse an application or cancel a licence – by considering:

• previous, current and ongoing compliance with relevant laws
• a wider range of relevant laws, in addition to the existing labour hire and workplace laws, including laws relating to bankruptcy, consumer protection, fair trading and corporate regulation.

To assess a business’s compliance capacity, LHA may request a copy of a business compliance plan that explains how a business operates and ensures compliance with its legal obligations.

The plan must be specific to the industry, workforce and business model of a business. Generic, templated or marketing style business plans may not be accepted. The plan should explain how compliance is built into day-to-day operations, not simply list policies or legal obligations.

A business compliance plan should address, at a minimum:

• business operating model (industry, workforce, hosts, use of subcontractors)
• how this model meets legal obligations in practice, including workplace, employment, tax, super, work health and safety, migration and labour hire laws
• key compliance controls relevant to the industry and business model.

For providers operating in industries with higher risks of worker exploitation and unlawful conduct, LHA applies standard conditions to all new licences, as well as progressively to existing licences.

In the high-risk industries of horticulture, meat and poultry processing, commercial cleaning, and security, these standard conditions act to further:

• increase transparency, by ensuring all workers receive information on their rights, and through reporting on the use of subcontractors, payroll services, and any change in industry
• enforce integrity, through restrictions on cash payments, the use of independent contractors and subcontractors, and clear requirements around accommodation and provision of PPE.

Failure to comply with licence conditions can lead to licensing action – up to and including cancellation – and legal action where required to address unlawful conduct.

Maximum penalties of more than $160,000 apply for non-compliance with licence conditions.

For more information and guidance, visit the Licence conditions page.

As the Labour Hire Legislation Amendment (Licensing) Bill applies to all Victorian labour hire licence holders and applicants, LHA recommends seeking high-quality professional advice relevant to your business.

Members of the LHA Enquiries team are unable to provide advice regarding specific individual circumstances, but can provide general advice in relation to these changes. The Enquiries team can be reached by email at enquiries@labourhireauthority.vic.gov.au or phone on 1300 545 200.