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Show us your labour hire licence! What your business needs to know about the new Labour Hire Licencing Act (Vic)

Find out what the Labour Hire Licencing Act means for your business with this in-depth guide.

For those of you that operate in the labour hire and/or recruitment space, getting yourself ready to comply with the Victorian Government’s recently introduced licensing regime may require some forward planning.

In our view, this is likely to involve more than merely signing a few application forms and paying a licence fee. But never fear! We’re here to help you understand the regulations and to make sure your business is complying with all its legal obligations.

What is the Labour Hire Licensing Act?

As you may be aware, on 29 April 2019, the Labour Hire Licensing Act 2018 (Vic) commenced in Victoria. The scheme is aimed at making the labour hire system fairer for workers, businesses and providers. Broadly, the major impact of this recent legislation is the introduction of a licensing system and the penalising of:

  1. ‘providers’ who advertise their services without a licence
  2. ‘providers’ who supply workers (employees or independent contractors) to a third party without a licence
  3. customers of providers, known as ‘hosts’, who enter into an arrangement for labour hire services with an unlicensed provider

Are you a labour hire provider?

Under the new Act, all labour hire providers will need to be licenced. So the first consideration for many businesses is whether you are considered a ‘provider’ and consequently require a licence.

Generally, you will be a ‘provider’ if in the course of conducting your recruitment, placement or contractor management business:

  1. you supply workers to a host to perform work in and as part of a business or undertaking of the host
  2. you recruit workers for or place workers with a host to perform work as part of the host business and you also procure accommodation for the workers
  3. you recruit workers for or place workers with a host to perform work as part of the host’s business

For the purposes of the above, ‘workers’ refers to both individuals employed by you that you on-hire to others as well as independent contractors you place in a host business (provided that you continue to assume admin and payroll services to those contractors/employees).

Traditional recruitment consultants who recruit an individual for another business, as an employee of that business, are unlikely to be considered a provider. However, such a consultant may be a provider if they also engage in the labour hire services discussed above or where they place employees in a business but maintain responsibility (directly or indirectly) for the payment of that employee’s wages.  

So, I’m a labour hire provider. What now?

If you’ve taken the test above and think you might be a ‘provider’, it’s paramount that you take steps to ensure you obtain a licence within the transition period (ending on 29 October 2019) - you can apply for a licence through the LHLO portal.

If you don’t apply for a licence within the transition period, you’ll be prohibited from providing labour hire services from 30 October 2019. Unlicensed labour hire providers, and hosts that work with them, risk hefty fines with the maximum penalty for unlicensed corporations exceeding $500,000!

How to apply for a labour hire licence: the fit and proper person test

Before you apply for a licence, you need to consider whether your business (as the applicant) will be considered a ‘fit and proper person’. The criteria for passing the test includes a consideration of any offences, infringements or contraventions of laws.

You also need to be comfortable declaring that, to your knowledge, your business complies with:

  • taxation laws
  • superannuation laws
  • occupational health and safety laws
  • workers compensation laws
  • labour hire industry laws
  • workplace laws
  • migration laws
  • applicable minimum accommodation standards

While the above must be considered at the time of application, it’s also important to be aware of the ongoing obligations you will need to comply with to maintain your licensed status. For example, this would include notifying the relevant department of any change to the information previously provided to the authority. There will be a dedicated team of Licence Hire Authority inspectors monitoring and enforcing the system, so make sure you’re on top of your obligations!

If you’d like to chat about how we can help your business navigate the waters of these new rules, please get in touch Jeremy Goldman!

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