• Industry profile

The Labour Hire Authority (LHA) Annual Report 2025-26 highlights progress towards LHA’s strategic objective to create and maintain a fair and lawful industry. 

The 2025-26 year built upon six years of work to improve the integrity and transparency of the labour hire industry, and to protect workers from exploitation. 

At year end, there were 233 fewer licence holders than the year prior, largely due to the scale of LHA compliance and enforcement action, together with more sophisticated licence assessments.  

During the year, LHA undertook significant and complex work across a range of LHA teams to implement amendments to the Labour Hire Licensing Act 2018 (Vic).  

These changes, which came into effect in June 2026, significantly strengthen LHA’s ability to address unlawful conduct by labour hire businesses and the people operating and controlling them.  

LHA can now more thoroughly assess – and respond to – operators’ legal and compliance history, financial viability and overall capacity to comply with legal obligations. Using a risk-based and intelligence-led approach, LHA identifies high-risk applications through data analysis and information from other agencies. 

Licence applications may be refused where the business – or the people running it – are not fit and proper, or fail to meet legal obligations, creating a barrier to entry into the industry. LHA supports operators who are willing to meet their obligations by providing education and, where necessary, setting licence conditions. 

Ultimately, these measures act to improve industry integrity and help to prevent worker exploitation. 

In 2025–26, LHA:  

• received 1,098 licence applications  
• granted 916 licences  
• refused to grant 114 licence applications  
• renewed 1,711 licences  
• refused to renew 11 licence renewal applications 
• cancelled 694 licences for reasons such as breaching relevant laws or failing to comply with licence conditions.  

Refusing a licence after identifying worker exploitation risks 

In 2025-26, a company applying for a licence declared that it had already supplied about 50 workers to the healthcare and social assistance industry as independent contractors, without a licence.  

LHA’s assessment included regulatory enquiries, open-source intelligence searches and requests for further information.  

The investigation found there was: 

• an ongoing Fair Work Ombudsman (FWO) investigation 
• evidence that the applicant had commenced providing labour hire services without a licence 
• uncertainty regarding WorkCover insurance coverage 
• potential misclassification of workers as independent contractors without superannuation contributions 

The applicant was given an opportunity to respond to LHA’s concerns and provide further information regarding its worker engagement model and insurance arrangements. 

LHA refused to grant the licence after determining that the applicant was not fit and proper because they had contravened labour hire licensing laws, and they had not demonstrated compliance with key legal obligations. 

The outcome shows how thorough licence assessments allow LHA to identify complex risks to workers, act before harm occurs and work with partner regulators. 

LHA also referred potential WorkCover non-compliance to WorkSafe Victoria. 

Stopping an unsuitable business model from entering the industry 

During assessment of a licence application to supply workers in the transport, postal and warehousing industry, LHA considered the applicant’s business plan, financial model and proposed employment arrangements. 

The assessment identified: 

• inadequate working capital 
• reliance on client payments to fund wages 
• employment agreements that were inconsistent with the relevant award and likely to result in worker underpayment. 

Together, these issues showed the applicant had not established the systems, resources or business model needed to meet its legal obligations. 

LHA refused the licence application, preventing an unsuitable business model from entering the industry and reducing the risk of worker harm. 

Granting a licence with conditions to support compliance 

A licence application to supply workers in the commercial cleaning industry raised concerns about workers the applicant proposed to engage as independent contractors. 

The applicant was new to Victoria but had operated in another state for some time. The interstate workers were engaged as independent contractors but appeared to have little control over their work. 

LHA was concerned that the arrangement was principally for the supply of labour, and that there was a risk workers would not receive superannuation and other lawful entitlements. 

LHA’s assessment included open-source intelligence searches, multiple requests for further information, a review of financial records and verification of supporting evidence.  

LHA also worked with the applicant during the assessment to clarify their legal obligations and provided opportunities for them to respond to concerns. 

In response, the applicant: 

• acknowledged that its understanding of worker entitlements was limited 
• planned to seek legal advice before engaging workers 
• agreed to classify some workers as employees, but left open engaging independent contractors where a genuine need existed. 

As a risk of misclassification remained, LHA granted the licence subject to conditions that enable ongoing monitoring of compliance. 

Educating and engaging with the industry and the community 

In 2025–26, LHA continued its extensive program of industry engagement, and increased direct communication with labour hire providers, hosts, workers and key stakeholders. 

LHA engaged with over 1,547 industry stakeholders through 72 events in 2025–26, online and in-person across Melbourne and regional Victoria.  

LHA continued to deliver tailored engagement presentations to reflect and address specific issues and priorities relevant to different industries and stakeholder groups. Highlights of the targeted information sessions and webinars delivered include:  

• regular webinars for new providers to help them learn about their obligations and common risks in the labour hire industry  
• an information session for construction industry providers and ‘tier one’ host businesses about proposed changes to construction industry regulation  
• horticulture compliance forums reporting on recent compliance activities and best practice tips for local businesses in Mildura, the Yarra Valley and Mornington Peninsula  
• education sector webinars to help procurement staff in schools understand their role as hosts  
• a webinar for accountants and tax agents outlining their obligations and how they can support their clients  
• multiple sessions updating the labour hire industry of the changes to the labour hire licensing scheme from 1 June 2026.  

These sessions have supported hundreds of businesses with ongoing compliance, while highlighting relevant industry issues and how businesses can use LHA’s tools and resources. 

In addition, LHA exhibited at expos in 2025–26 that targeted small business operators, as well as businesses in the construction, manufacturing and horticulture industries. The expos provided dozens of opportunities for in-depth conversations between LHA staff and industry stakeholders, including hosts and providers. 

LHA continued to expand its targeted awareness advertising in 2025-26. Building on previous campaigns targeting host businesses in horticulture and meat and poultry processing, LHA delivered its broadest campaign to date, targeting hosts in all industries from August to October 2025.  

The campaign raised awareness of hosts’ legal obligation to use only licensed labour hire providers to supply commercial cleaning, security and temporary staffing services.  

Messaging focused on how host businesses could protect their businesses from penalties, and protect workers from exploitation, by only using licensed labour hire providers. 

Materials were made available in multiple languages, and advertising was targeted by location and industry. The campaign complemented LHA’s broader engagement with host businesses, including webinars and peak body outreach. 

Read the full report 

Read the full Labour Hire Authority Annual Report 2025-26.