Labour hire in the hospitality industry

3 July 2025
Labour hire in the hospitality industry

The Labour Hire Authority (LHA) is increasing its focus on host businesses, especially in industries where labour hire is used in roles supplementary to a business’s core activities – such as hospitality.

Victoria has a strong hospitality culture and is home to more than 30,000 hospitality businesses including cafes, restaurants and bars.

The Victorian Government projects there to be over 16,270 new accommodation and food services workers needed by 2027.

Accommodation and food services also has the highest proportion of casual employees in Australia, with work often low-entry level, low paid, attracting migrants and young people – and with 15.7 per cent of workers changing employer in 2024.

As of June 2024, there were 296 licensed providers self-selected as operating in the ‘accommodation and food service’ or ‘hospitality’ industries.

Labour hire is sometimes used within the hospitality industry for casual, ad hoc work such as catering weddings or sports events.

However, the nature of the work undertaken by labour hire workers at hospitality venues is often less likely to be in roles that directly relate to the core services a business provides, such as front-of-house or in a kitchen.

Labour hire is more common within the industry in supplementary roles at venues such as pubs or clubs, including:

  • commercial cleaning
  • security
  • trainees and apprentices sourced from group training organisations.

Hospitality and labour hire licensing obligations

It is crucial for venues to understand and comply with their obligations under the Labour Hire Licensing Act 2018 (Vic) to only source labour hire workers through licensed providers.

Under the Act, the same maximum penalties apply for engaging an unlicensed labour hire provider as apply for providing unlicensed labour hire services.

Hosts also face disruption to their business if LHA finds an unlicensed provider has supplied workers to their business.

Penalties for using or providing unlicensed labour hire services can exceed:

  • $650,000 for a corporation
  • $160,000 for an individual.

Labour hire providers must also comply with relevant laws; non-compliance can lead to actions including imposing licence conditions, suspension or cancellation.

Businesses should use the tools on the LHA website to ensure providers have a valid licence: 

Non-compliance in the hospitality industry

LHA has taken a range of actions against labour hire providers in Victoria’s hospitality or accommodation and food services industries to date, including licences cancelled, refused, or with conditions imposed.

Recently, LHA received a complaint alleging a labour hire business that provided kitchen stewards in the hospitality industry was:

  • operating unlicensed
  • underpaying workers, some of whom may have been international students
  • paying workers cash in hand, and not providing pay slips
  • not paying tax or superannuation.

LHA officers conducted a site inspection where they interviewed the host and met with workers. 

As a result of the visit, the host ceased using the unlicensed provider and directly employed the affected workers.

During the investigation, the provider made numerous submissions and provided false and misleading information to LHA. Other breaches of labour hire, workplace, superannuation and taxation laws were also identified.

LHA provided information on the possible breaches to relevant agencies, including the Fair Work Ombudsman and the Australian Taxation Office. The provider’s subsequent application for a licence was refused by LHA.

LHA education and engagement activities in the hospitality industry

In May, LHA exhibited at the Foodservice Expo in Melbourne, providing information and advice to dozens of businesses on licensing obligations in the industry.

In June, LHA held an information session for hosts in the hospitality industry. The session covered best practice for engaging labour hire providers, and hosts’ obligations under the Act.

LHA will launch a communication campaign in July, targeting labour hire hosts in all industries – especially in industries like hospitality where labour hire is more likely to supplement core business activities.

Building on the recent campaigns targeting horticulture and meat processing hosts, this new activity will launch across digital, radio, social media and press channels.

Advertisements will encourage hosts to use the tools on the LHA website to check the labour hire licences of providers they have engaged or are seeking to engage.

Information for hosts – along with English and translated versions of posters, handouts and digital assets – will be available later in July for businesses and stakeholders to download on the Host webpage.