If you’re running (or planning to start) a labour hire business in Victoria, getting your licensing right from day one is critical.
Labour hire licensing exists to protect workers, lift standards across industries like construction, manufacturing, health care and cleaning, and give host businesses confidence that they’re dealing with reputable providers.
In this guide, we’ll walk through what a Victorian labour hire licence is, who needs one, how to apply, your ongoing obligations, and the core contracts and policies that help you stay compliant and build trust with clients.
What Is Labour Hire Licensing In Victoria?
Victoria’s regime is established under the Labour Hire Licensing Act 2018 (Vic) and administered by the Labour Hire Authority (LHA).
If your business supplies workers to another business (the host) to perform work in and for the host’s enterprise, you generally need a licence to operate, advertise or offer those services in Victoria, unless a specific exemption applies.
The regime targets issues such as underpayment, unsafe conditions and sham contracting. Holding a licence signals you meet baseline legal and ethical standards around employment, pay, superannuation, taxation and worker safety.
Two quick concepts to keep in mind:
- Supply of workers: It’s not limited to traditional “temp” staff. It can include employees or independent contractors you engage and then supply to a host to do work in the host’s business.
- State-based regulation: Licensing is different in each state. If you operate across borders, check the requirements where your workers perform work (not just where your office is located).
Who Needs A Licence (And Common Exemptions)?
In most cases, you will need a Victorian labour hire licence if your business:
- Supplies workers to perform work in and for a host’s business or organisation.
- Arranges for individuals you pay (employees or contractors) to work at a host site or under the host’s direction.
- Engages in on-hire arrangements, including through tiers or subcontracting.
It generally doesn’t matter whether your workers are employees or independent contractors-the licensing test focuses on the nature of the supply and who benefits from the work (the host’s business).
There are limited exemptions, such as certain intra-group secondments or scenarios where no “supply” occurs (for example, a genuine business-to-business service where you deliver outcomes through your own enterprise, not by supplying personnel into the host’s business). Exemptions are narrow and fact-specific, so if you’re unsure, it’s wise to get legal advice before you decide you don’t need a licence.
Hosts have obligations too. It’s unlawful for a host to enter into an arrangement for labour hire services with an unlicensed provider. Many hosts now verify a provider’s status on the LHA public register before signing.
How Do You Apply For A Licence In Victoria?
The Labour Hire Authority manages an online application process. Expect to provide detailed information and evidence of compliance. Here’s the typical flow.
1) Confirm You’re Caught And Check Eligibility
First, confirm your business model meets the definition of a labour hire provider under the Act.
Next, make sure the business and its “responsible persons” (for example, company directors) are eligible. The LHA considers whether you and key people are fit and proper and whether you have a track record of compliance with workplace, superannuation, tax and safety laws.
Gather core documents such as your ABN/ACN, business details, and evidence of compliance systems (for example, payroll processes, super payments, and occupational health and safety controls).
2) Complete The Online Application And Pay The Fee
The application will ask for information about your organisation, responsible persons, industries you supply to, typical roles, and how you comply with the law.
You’ll need to make declarations, upload supporting evidence and pay the prescribed fee (fees usually vary with business size).
3) Assessment And Public Notice Period
Once lodged, the LHA assesses your application, including compliance history and the fitness and propriety of responsible persons. Applications are typically published for a short public notice period, during which objections can be raised.
4) Outcome And Registration
If approved, you’ll receive your licence and your details will be published on the public register. Licences generally run for several years and are subject to conditions. If refused, you may have review rights-seek advice quickly so you can act within any deadlines.
Tip: Build your internal compliance systems before you apply. Demonstrating robust payroll, superannuation and OHS processes from the start can make the assessment smoother.
Your Ongoing Obligations (And Host Business Risks)
Licensing doesn’t end at approval-there are ongoing duties. Key obligations typically include:
- Annual reporting: Provide yearly information to the LHA about your operations. Keep your records audit-ready.
- Maintain compliance: Continue to meet obligations under the Fair Work framework, superannuation laws, tax laws and Victorian occupational health and safety requirements (including the Occupational Health and Safety Act 2004 (Vic) and WorkSafe Victoria guidance).
- Update your details: Notify the LHA of changes to the business, responsible persons or other prescribed matters within required timeframes.
- Publish licence details as required: Use your licence number where the Authority specifies (for example, certain advertising and your website). Follow the Authority’s directions rather than taking a guess.
- Record-keeping: Keep clear, accurate and complete records of engagements, payroll, super and compliance actions-you may be audited.
Penalties for non-compliance can be significant. Supplying labour without a licence, breaching licence conditions, or providing false or misleading information can lead to enforcement action. Hosts can also face penalties for using unlicensed providers. The safest approach is simple: keep your licence current, follow the conditions, and verify every arrangement.
Setting Up Your Labour Hire Business: Structure, Insurance And Tax (Plus Essential Legal Documents)
Strong foundations make compliance easier and help you win work. This section covers business structure, practical compliance steps and the core contracts to have in place.
Choosing A Business Structure
Your structure affects risk, tax and credibility. Common options are:
- Sole trader: Simple and low cost, but you’re personally liable for debts and claims.
- Partnership: Shared ownership and liability between partners; still exposes personal assets.
- Company: A separate legal entity that can offer limited liability and credibility with hosts and insurers.
Many labour hire providers choose a company for liability protection and governance benefits. If you’re heading down this path, our team can help with Company Set Up and tailoring documents like a Shareholders Agreement if you have co-founders or investors.
Insurance And Safety Systems
Consider the right insurances for your operations and client industries-this commonly includes workers compensation coverage, public liability and (depending on your services) professional indemnity. Insurers often expect to see robust OHS procedures, induction processes, incident reporting and contractor vetting.
Because Victoria uses OHS terminology (rather than WHS), align your policies with the Occupational Health and Safety Act 2004 (Vic) and WorkSafe Victoria guidance, and make sure responsibilities between you and hosts are clearly documented.
Payroll, Super And Tax
Set up compliant payroll and superannuation systems from the start. Typical steps include registering for PAYG withholding and ensuring timely super payments to the right funds.
Tax and super settings can vary based on your structure and workforce mix (employees vs independent contractors). We recommend you speak with an accountant on tax and super matters alongside your legal setup.
Essential Legal Documents For Labour Hire Providers
Licensing is only one part of the compliance picture. The right contracts and policies help manage risk, set expectations and demonstrate professionalism.
- Labour Hire Agreement (with your hosts): Sets the commercial terms, scopes of work, rate structures, responsibility for OHS at host sites, supervision, timesheet approvals, invoicing and payment terms, and what happens if issues arise. Many providers build this around a master schedule model; others prefer a project-by-project approach. If you deliver services rather than supply staff into a host’s business, consider a tailored Service Agreement instead.
- Employment Contract (for on-hired employees): Covers pay, entitlements, hours, site rules, confidentiality and lawful directions. A well-drafted Employment Contract helps you meet Fair Work requirements and keep obligations clear.
- Contractors Agreement (for on-hired contractors): If you engage independent contractors, you’ll want a clear Contractors Agreement that describes the genuine contractor relationship, rates, deliverables, safety obligations, insurance requirements and IP/confidentiality.
- Workplace Policies and Staff Handbook: Policies on OHS, anti-bullying/harassment, equal opportunity, leave and grievances help you train and supervise staff and show the LHA you take compliance seriously. A consolidated Workplace Policy suite keeps this consistent.
- Privacy Policy: If you collect personal information from candidates, employees, contractors or host contacts (for example, via your website or onboarding forms), a compliant Privacy Policy is essential.
- Internal governance documents: If you operate through a company, ensure your constitution and board processes align with how you run the business. Where there are multiple founders or investors, a Shareholders Agreement can set decision-making rules, vesting and exit mechanics.
Not every provider will need every document on day one, but most will need several of the above. Tailored drafting is important in this industry because responsibility for OHS, supervision and directions can be nuanced between you and each host site.
Operating Across States Or Buying/Selling A Business?
If you supply workers outside Victoria, check whether you need licences in those jurisdictions as well. Requirements differ between states and can change-build compliance checks into your sales and onboarding workflows.
Thinking about buying a labour hire business? In Victoria, labour hire licences are not transferable property. A buyer will generally need their own licence before they can lawfully provide labour hire services through the acquired business. Plan the deal timeline around that requirement, and review all contracts, workforce records and compliance systems carefully as part of due diligence. If you’re selling, work with your advisors to manage novation of host agreements and continuity of supply in a compliant way.
Where the law is complex or timing matters (for example, transitioning clients during a sale while meeting licence obligations), it’s sensible to get tailored legal advice early.
Key Takeaways
- Supplying workers into a host’s business in Victoria generally requires a labour hire licence unless a narrow exemption applies-confirm your model before you trade.
- The LHA assesses your application against “fit and proper” and compliance criteria; prepare evidence of payroll, superannuation, tax and OHS systems before you apply.
- After approval, you must keep accurate records, report annually, follow OHS and workplace laws, and use your licence details where required by the Authority.
- Hosts can face penalties for using unlicensed providers, so expect licence verification to be part of client onboarding.
- Choose a structure that suits your risk and growth plans (many providers incorporate) and put core documents in place-your Labour Hire Agreement, Employment Contract, Contractors Agreement, Workplace Policy suite and Privacy Policy.
- Licences aren’t transferable on a sale; buyers generally need their own licence. Build licensing and contract transition into any buy/sell timeline.
If you’d like a consultation about setting up or running a labour hire business in Victoria, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
