Labour Hire Compliance in Australia: What Every Business Must Know

Why Compliance Matters More Than Ever

The regulatory landscape around labour hire in Australia has tightened significantly over the past five years. Queensland, Victoria, and South Australia now operate formal labour hire licensing schemes, with other states moving in the same direction. Non-compliance carries civil penalties, back-payment orders, and reputational damage that can follow a business for years.

Understanding your obligations — and the obligations of your labour hire provider — is no longer optional.

The Three Critical Compliance Areas

1. Award Wages

Every worker engaged through a labour hire arrangement must be paid at or above the relevant Modern Award rate for their classification. The most common award applicable to facility services and cleaning roles is the Cleaning Services Award 2020, with Industrial roles covered by the Manufacturing and Associated Industries and Occupations Award.

Underpayment — even inadvertent — triggers Fair Work Act liability. When A1 Group Services supplies personnel, we take full responsibility for Award compliance. Our payroll systems are audited against the Fair Work Act and updated with each Annual Wage Review.

2. Workers Compensation Insurance

The host employer (your business) is generally not liable for workers compensation claims from a labour hire worker — that obligation sits with the labour hire company as the employer of record. However, this protection only exists if the labour hire agreement is properly structured and the provider is appropriately insured.

At A1 Group Services, all workers are covered by comprehensive workers compensation insurance in every state and territory in which we operate.

3. Payroll Tax

This is the compliance area that catches most businesses by surprise. In most Australian states, labour hire workers are treated as employees for payroll tax purposes — meaning the client business may have a payroll tax liability if the threshold is exceeded.

When engaging A1 Group Services as your labour hire provider, we handle all payroll tax obligations as the employer of record. This liability does not pass to you.

Choosing the Right Partner

When evaluating a labour hire provider, ask:

Are you licensed under the relevant state labour hire licensing legislation?

Can you provide evidence of current workers compensation coverage?

How do you ensure Award compliance, and how frequently are your systems reviewed?

Do you carry public liability insurance, and at what level?

How do you handle payroll tax obligations?

A credible provider should answer all of these questions without hesitation and provide documentation on request.

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A1 Group Services handles all Award wages, insurance, and payroll tax obligations — removing 100% of the liability and risk from the client. Request a Partnership Proposal to learn more.