Labour Hire Licensing - Are we covered?

From Craig Joy - Craig Joy Workplace Consulting

The Labour Hire Licensing Act is now in place, the regulations have finally been released, and the web site is finally open.

Information has been circulating that if you have an employee who does anything for another business, you are instantly ensnared in the Labour Hire provisions, must have a license, and face huge fines if you provide labour hire services without one. Businesses face fines of up to $365K and individuals face $126K plus three years jail. Allegedly if one of these workers is injured then Workcover won’t pay. The information about the fines is true, the rest of it not so. 

In previous updates I noted that the devil is in the detail, and the detail is in the regulations – which hadn’t been released. The regulations are now finally available, and they provide an important “out” for many businesses. 

An employer does not qualify as a labour hire provider if they provide an “in-house” employee to do temporary work on one or more occasions within another business. So, you can send your employee to help out in another business and be paid by that other business for supplying that employee, without it meaning you are now a labour hirer.

An “in-house” employee is defined as one who:

  1. Is engaged as an employee by the provider on a regular and systematic basis

  2. Has a reasonable expectation the employment with the provider will continue, and

  3. Primarily performs work for the provider other than as a worker supplied to another person to do work for the other person.

In other words, if you have a regular employee who primarily works within your business, and expects to continue working for you, and you temporarily loan that person out to another business, that is not labour hire and you do not need a licence. 

If you just continually hire that person out to other businesses and they don’t primarily work in your business, you are going to have an issue and will need a license which incurs an annual fee. The fees are based on wages as per your Workcover wage assessment, not just wages related to labour hire. So, if your wages total over $5 million per annum it is going to cost you $5,000 per year for the licence, even if you are only putting one person into labour hire positions.

If you are in a situation such as having a mechanic on site servicing vehicles, and during a quiet time he helps to move another company’s vehicles out of the way, that does not become labour hire. If your plant operator gets out of his machine and picks up a shovel (probably dreaming here), that does not become labour hire.

This legislation was supposed to stop shonky operators exploiting immigrants and back-packers. Amazingly there is a simple out for those operators. To be a provider there must be a requirement that the provider pay money to the worker. So, if the provider arranges labour for fruit picking for example, but has the farmer pay the pickers, the provider is exempt from the legislation. 

Given the evident confusion in this area, I am considering running an information session.  If that would be of value to you, please express interest by contacting me directly at