Victorian Labour Hire Licensing Act 2018: What Victorian Businesses Need To Know

Future Accounting
3 days ago
5 min read

Many Victorian businesses don’t realise the Victorian Labour Hire Licensing Act 2018 may apply to them until a contract is delayed, a client asks for proof of licensing, or penalties are threatened. This is becoming increasingly common in industries like agriculture, shearing, and rural contracting.

To help you stay ahead of the issue, this guide explains what the Act is, who it applies to, and what you need to do if your business is caught under the rules.

If you’re unsure whether your business needs to comply, the safest step is to get advice early. The earlier you act, the easier it is to avoid disruption.

What the Victorian Labour Hire Licensing Act 2018 covers

The Victorian Labour Hire Licensing Act 2018 was introduced to regulate labour hire arrangements and protect workers from exploitation.

In simple terms, it requires labour hire providers to hold a licence if they supply workers to another business to perform work as part of the host’s normal operations.

The Act is enforced by the Labour Hire Authority (LHA), which has broad powers to investigate complaints, request documents, issue penalties, and prosecute businesses that do not comply.

Quick summary: You may be affected if you:

Supply workers to another business (even on a short-term basis)
Supply contractors as well as employees
Provide labour during seasonal peaks (like harvesting or shearing)
Get paid for supplying workers to perform the host’s work

If any of these apply, it’s worth getting your arrangement checked before it becomes a problem.

Who is considered a labour hire provider

You may be considered a labour hire provider under the Victorian Labour Hire Licensing Act 2018 if:

You supply workers to another business (the host)
The workers perform work that is part of the host’s usual business
You are paid for supplying those workers

Importantly, many businesses are caught out because it doesn’t matter:

Whether the workers are employees or contractors
Whether the work is short-term, seasonal, or ongoing
Whether labour hire is your main business or just one part of what you do

The Act focuses on what happens in practice, not what you call the arrangement.

If you’re unsure whether your business fits this definition, it’s a great idea to get professional advice so you can move forward confidently.

Industries commonly affected across Victoria

The Victorian Labour Hire Licensing Act 2018 applies across many industries, including (but not limited to):

Labour hire and recruitment agencies
Construction and trades
Manufacturing and warehousing
Transport and logistics
Horticulture and agriculture
Cleaning and security services
Meat processing and food production

If your business supplies workers to clients, or you use workers provided by another business, it’s worth checking your obligations now.

Why agriculture and shearing businesses are being impacted

In recent years, the Labour Hire Authority has increased scrutiny in rural and agricultural industries, including:

Shearing
Harvesting
Fencing
Rural contracting
General farm labour arrangements

For example, a shearing contractor who supplies shearers to work on a farmer’s property may be considered a labour hire provider under the Victorian Labour Hire Licensing Act 2018.

Even where workers are contractors or paid per head or per sheep, the arrangement may still fall under the Act.

Often, businesses only discover this once a client:

Requests a licence number, or
Refuses to engage them without proof of licensing

If this is happening in your industry, don’t wait for a contract delay. A quick review now can help you avoid costly disruption later.

What you must do to comply

If you are deemed to be a labour hire provider, you must hold a valid labour hire licence issued by the Labour Hire Authority.

To meet licensing requirements under the Victorian Labour Hire Licensing Act 2018, you may need to demonstrate you are a “fit and proper person”, including:

Compliance with tax obligations
Compliance with superannuation requirements
Compliance with workplace obligations
An absence of serious breaches or misconduct

Ongoing compliance also applies, and may include:

Lodging regular statements
Maintaining accurate worker records and host business records
Notifying the Authority of changes to your business

Host businesses also have obligations

If you’re a host business (meaning you use workers supplied by someone else), you must only engage licensed labour hire providers.

This means the responsibility doesn’t just sit with the labour hire provider — hosts need to be careful too.

Penalties for non-compliance

Penalties under the Victorian Labour Hire Licensing Act 2018 can be significant.

Unlicensed labour hire providers may face fines exceeding $600,000 for corporations, and host businesses can also be fined for using unlicensed providers. Individuals may face personal penalties as well.

Just as importantly, there is often no grace period once non-compliance is identified — which is why getting ahead of it matters.

Why businesses are often caught off guard

Many businesses assume they’re not affected because:

They’ve always operated this way
They only use contractors
Labour hire is not their main business
The arrangement is seasonal or informal

However, the Victorian Labour Hire Licensing Act 2018 focuses on the real-world arrangement — not how it’s described.

This has caused real disruption for industries like shearing, where long-standing commercial relationships may suddenly require licensing, restructuring, or contract changes to stay compliant.

Next steps: confirm your obligations early

If your business supplies workers to clients, or uses workers supplied by another business, it’s important to confirm whether the Victorian Labour Hire Licensing Act 2018 applies to you.

Getting advice early can help you:

Avoid expensive penalties
Prevent contract delays
Understand whether you need to apply for a labour hire licence
Structure your worker arrangements correctly
Reduce risk and stay compliant long-term

The best time to check is before you’re put under pressure by a client or regulator.

How Future Accounting Group can help

At Future Accounting Group, we help Victorian businesses understand and navigate the Victorian Labour Hire Licensing Act 2018, including support with:

Assessing whether your business is a labour hire provider
Understanding licensing requirements and compliance obligations
Reviewing worker arrangements (including contractors and seasonal labour)
Reviewing business structure and payment arrangements
Helping you stay compliant while minimising disruption

If you’re in agriculture, contracting, shearing, or any industry where workers are supplied to clients, we can help you get clarity quickly and take the right next step with confidence.

Book an appointment with Future Accounting Group today and let’s make sure your business is protected, compliant, and ready to keep operating smoothly.

Disclaimer  

This article does not constitute financial advice and is for general information only. It does not take into account any individual’s personal objectives, situation or needs, and is not intended as professional advice. Any similarity to an individual’s personal circumstances and the examples provided in this article is purely coincidental. Any person acting upon such information without receiving specific advice, does so entirely at their own risk.  

Authorisation under an Australian Financial Services Licence (AFSL) is not required in the provision of this article and the author plus Future Accounting Group Pty Ltd is not acting in its capacity as an Australian Financial Services Licence holder 

Liability limited by a scheme approved under professional standards legislation.