From 1 October 2026, Victoria's labour hire law asks a simpler question: does the arrangement have the character of labour supply? If it does, the business supplying the workers needs a licence, wherever it sits in the chain. That now includes "bare intermediary" companies that don't employ the workers themselves but on-supply people employed by someone else (Labour Hire Authority, labour hire law changes 2026). Hosts must only use licensed providers. For most businesses, the hard part isn't understanding the rule. It's being able to show, at any time, which licensed business supplied which worker to which site, under which award, and that they were paid properly. That information usually sits in four or five places that don't talk to each other.
This article is general information, not legal advice. Check your own position with the Labour Hire Authority (LHA) or your adviser.
What changed in 2026, in plain terms
The changes came in stages under the Labour Hire Licensing Act 2018 (Vic) and its regulations.
1 June 2026: more information at every licence transaction. Applications, renewals and annual reports now need supporting documents for the fit and proper person test, a declaration of compliance with an expanded list of laws, and a declaration that the licence holder is financially viable, with supporting information (LHA).
Standard licence conditions for high-risk industries. Since June 2026, licences granted in horticulture, commercial cleaning, security and meat and poultry processing carry standard conditions, and these are being rolled out to existing licence holders from late 2026 (LHA, new licence conditions). They include:
- paying workers and subcontractors by electronic transfer into an account in their own name, not cash (except in an emergency or where the LHA authorises it)
- reporting on the subcontractors you use, including each subcontractor's name and labour hire licence number, plus details of the hosts involved
- telling the LHA in writing within ten business days if you start supplying workers in an industry you haven't already disclosed
- making sure any housing you arrange for workers meets the minimum standards.
1 October 2026: the supply chain definition. The general definition of providing labour hire services now focuses on whether labour supply is involved. A licence is needed to supply labour anywhere in a supply chain (LHA, final changes).
Next: construction. Regulations bringing on-site security, traffic management and control, crane operation and concreting in certain construction contexts into the scheme have been approved, with a later start date of 18 January 2027 to give businesses time to transition (Victorian Government notice of decision).
The stakes are real: penalties for using or providing unlicensed labour hire services may exceed $660,000 for a corporation and $160,000 for an individual (LHA, commercial cleaning).
Who this catches
Hosts. If your business uses cleaners, security guards or temporary staff supplied by another business, you are likely a labour hire host. Facility managers, property owners, warehouses, food processors and builders all fall into this regularly.
Providers. Labour hire firms, and also cleaning, security and facility services contractors who supply people to clients' premises. The LHA says most businesses that supply cleaners to commercial premises need a licence.
Everyone in between. Head contractors who subcontract part of a contract, and "intermediary" companies that sit between the client and the business that actually employs the workers. Since 1 October, sitting in the middle without employing anyone doesn't take you out of the scheme.
Where the records actually live
Ask most hosts and providers to answer "who was working at this site last Tuesday, who employed them, and is that business licensed?" and you'll watch someone open several things at once:
- the contract or purchase order with the provider, often a PDF in an email or a shared drive
- a licence check, if it was done, recorded as a screenshot or a tick in a spreadsheet on the day the provider was set up
- the roster or site schedule, in a rostering app or a spreadsheet
- timesheets or sign-in records, from an app, a site book, a client portal or photos of paper sheets
- payroll, in the payroll system, with award and pay rate details
- invoices, in the accounting software, sometimes showing a business name that isn't the one on the contract.
Each of these is fine on its own. The trouble is they were never joined. The licence status is checked once and then lives in a spreadsheet that nobody updates. The subcontractor a provider brought in for a busy month appears in the timesheets but not in the contract register. The annual report to the LHA gets built by hand from a payroll export, with someone counting workers by industry.
This is the same pattern we see across industries:
- [Double data entry](/guides/plain-english-glossary#double-data-entry) (the same information typed into two systems): the worker keyed into the roster, then payroll, then invoicing.
- No [single source of truth](/guides/plain-english-glossary#single-source-of-truth) (one place everyone takes the answer from): three lists of "our providers" that don't agree.
- Processes living in people's heads and spreadsheets: one person knows which subcontractors are on which sites.
- Reports built by hand: the LHA annual report, and any evidence a host asks for, pulled together once a year from exports.
What to track, joined up
You don't need a new platform to meet the rules. You need a few pieces of information to be held once and linked.
For hosts:
- A provider register with each provider's legal name, ABN, licence number, licence status and any licence conditions. The LHA's host guidance says to check the public licence register, subscribe to be notified of changes to your providers' licence status, ask for evidence of company structure and any sub-contracting, and keep records of all checks and their outcomes (LHA host fact sheet).
- The chain for each site or contract. Who you contract with, and who they subcontract to. The same fact sheet suggests contracts that limit or require pre-approval of sub-contracting and require providers to tell you about changes to their licence or compliance.
- A check before payment. Before a provider's invoice is approved, confirm the business name and ABN on it match a licensed provider in your register. This is a simple rule that can be automated in an approval workflow.
For providers:
- Worker, site, host and award, linked. Each shift should connect a worker to a site, a host and the award or agreement that applies. That one link feeds payroll, the client invoice and your annual report.
- Subcontractor records with licence numbers. If you use subcontractors, hold their licence number and status in the same place as the jobs they work on, so the subcontractor report comes straight from the job data.
- Payment evidence. Electronic payments to the worker's own account, matched to pay runs, so you can show it without digging through bank statements.
- Industry and accommodation flags. If you start supplying a new industry, someone has to notice within ten business days. If the system knows the industry of every host, it can flag the first shift in a new one.
Our articles on why the office grows with every placement, pay rate versus charge rate and labour hire payroll under Payday Super cover the timesheet-to-pay-to-bill chain in more detail.
What it looks like when it's fixed
When a host's procurement team approves a new cleaning or security provider, the licence is checked against the register and the business is subscribed to status updates. If a licence is suspended, the provider is flagged before the next invoice is paid, not discovered at audit.
When a provider's annual report is due, the worker counts by industry, the awards that covered them, the deductions made and the subcontractors used come out of the same records that ran the pay runs. Someone reviews the figures rather than building them.
And when a client, the LHA or your own board asks "who was on site, who employed them, and were they licensed?", the answer takes minutes, because it's one record, not five.
That's the kind of compliance reporting built from your everyday data we set up. We usually start by mapping the current flow from contract to roster to timesheet to pay to invoice, then connect the systems you already have through business process automation rather than replacing them.
Frequently asked questions
What changed in Victorian labour hire law on 1 October 2026?
The definition of providing labour hire services under the Labour Hire Licensing Act 2018 (Vic) was amended to focus on whether an arrangement has the character of labour supply. A licence is now needed to supply labour anywhere in a supply chain, including by intermediaries that don't employ the workers themselves.
Do I need to check a provider's licence more than once?
The LHA's host guidance says to check the licence, subscribe to be notified of changes to your providers' licence status, and keep records of all checks and their outcomes. A one-off check when the provider is set up doesn't tell you whether they're still licensed months later.
Does this apply to cleaning and security contractors, not just labour hire agencies?
Often, yes. The LHA says most businesses that supply cleaners to commercial premises need a labour hire licence, and commercial cleaning and security are among the industries with standard licence conditions. Whether a particular contract is caught depends on its arrangement, so check with the LHA or your adviser.
What records should a host keep?
At a minimum: each provider's licence number and status, the checks you made and when, your contracts including any approval of sub-contracting, and who worked at each site. Keeping these linked to your purchase orders and invoices means you can show the chain without rebuilding it.
When do the construction changes start?
The Victorian Government has decided the construction regulations, covering on-site security, traffic management and control, crane operation and concreting in certain contexts, will start on 18 January 2027.
See our labour hire industry page for the wider picture of how we help labour hire and workforce businesses. If you supply cleaners or security staff, our cleaning, security and facility services page covers rosters, award pay and profit by site. If you'd like the flow mapped first, our $5,000 Process & Systems Audit documents how worker, site and pay information moves through your business today and where it breaks. If you hold licences in more than one state, our guide to labour hire licence reporting in Queensland, Victoria, South Australia and the ACT sets out what each regulator asks for.
If your licence checks, timesheets and payroll live in different places and you'd like to see them joined up, book a free initial chat.