You probably have a contractor on site who is paid by the hour, takes instructions from your supervisor and has never been asked whether the business behind them needs a licence. Since 1 October 2026 the labour hire definition in Victoria has a new shape, and the host is the one who answers for the choice of supplier.
The Labour Hire Authority's own summary is calm: in most cases the change does not affect when a licence is required. This guide sets out the factors the Authority lists, sorts three example arrangements against them, and finishes with a short file to keep on each contractor.
What the 1 October 2026 amendment changed for hosts
Under the Labour Hire Licensing Act definition, a labour hire provider is a business with an arrangement that is wholly or principally for the supply of labour, and that is obliged to pay the individual, in whole or in part, for the work. The people supplied may be employees or independent contractors. The Authority sets this out on its page about the general definition of labour hire services.
The Authority says the amended definition focuses on whether labour supply is involved. It makes clearer that a licence is needed to supply labour anywhere in a supply chain, and its page on the labour hire law changes adds that this includes "bare intermediary" companies, which on-supply workers employed by other companies. The Authority has also said it is anticipated that additional construction activities in specific contexts will be covered from late October, subject to a consultation process, so construction hosts should check that page for the current position.
For a host, the shift is one of attention. The Authority says hosts must only use licensed providers, and that substantial penalties may apply to a host that engages an unlicensed provider. Its host page has the current amounts.
The factors that point to labour supply
Where it is not obvious, the Authority says to look at the terms of the arrangement and the whole relationship, considering what actually happens and not just what the contract says. Its factors work as a supply of labour test you can put to each contractor as six questions:
- Roles, not a defined scope. Does the supplier provide workers to fill roles, rather than deliver a defined scope of work?
- Pay tied to labour. Is payment set by hourly, daily or weekly rates, rather than outcomes or deliverables?
- Your direction and control. Is the work subject to your direction and control?
- Not a specialised service. Is the work something other than a specialised service?
- Few non-labour inputs. Does the supplier bring no substantial materials, equipment, methodology, intellectual property or design expertise?
- Risk sits with you. Do you carry the commercial or legal risk from workplace injury, defects or performance issues?
The Authority says the list is not exhaustive and that these and any other factors are not determinative on their own. That rules out counting ticks. A business generally only needs to supply one worker to a host to be a provider, so a single embedded contractor gets the same questions as a crew.
Three arrangements sorted against the factors
These three examples are illustrations written for this guide, set in the kind of sites that use manufacturing labour hire and warehouse crews. They are not findings by the Authority and none is a legal verdict. Each shows which way the factors lean.
- A shift crew from an agency. A plant books six workers for four weeks of production shifts. The agency pays them and invoices the plant per hour worked. The plant's supervisor allocates the tasks and the workers use the plant's equipment. Each factor described here points toward labour supply, so this is the clear case to check on the register first.
- A conveyor installation. A specialist business is engaged to design, supply and install a conveyor for a fixed price paid in stages. It brings its own equipment and method, and its own site manager directs its team. The factors lean the other way, toward a service rather than labour supply.
- A maintenance contractor whose role drifts. A business services the plant's forklifts for a monthly fee. Later the plant asks one of its technicians to work on the production floor under the plant's own supervisor, and the contractor starts invoicing that person by the hour. The embedded technician now shows three factors at once: a role filled, hourly pay and host direction.
In the third example the contract may never have changed. The Authority looks at what actually happens, so your supervisors, who see the daily picture, are the people to ask.
When the answer is unclear
Some arrangements will sit in the middle. The Authority says that if you remain unsure you should seek legal advice, and it recommends high-quality professional advice relevant to your business. Its enquiries team can give general advice about the changes but not advice on individual circumstances.
Some situations are excluded from the licence requirement altogether, including certain secondment arrangements, and the Authority has a page on excluded classes of workers. Do not assume a contractor falls into one without reading it. If you spread work across several agencies in busy periods, a separate guide covers using more than one supplier, and crews that cross state lines are covered in the licence check across states.
In the meantime, look the supplier up on the Labour Hire Licence Register, since the Authority says only providers with an active licence may advertise or provide labour hire services in Victoria. If you are comparing providers for a Melbourne site, start with labour hire in Melbourne. Chandler Personnel is an independent, Melbourne-based blue collar specialist, and whichever provider you compare, check it on the Labour Hire Licence Register first.
What to keep on file for each contractor
The Authority's host checklist says to keep a record of your licence checks, and hosts may be required to produce documents about their use of providers. The routine below is a suggestion built on that advice, not an Authority requirement:
- Who the supplier is. The business name on the invoice and on the register, and who is named as running the business.
- What you checked and when. The date, the register result and who looked.
- How the work is described. A defined scope or filled roles, and how the price is built.
- Who directs the work. The supervisors giving day-to-day instructions and who supplies the equipment.
- What has changed. Any shift in tasks, pay basis or people, and when you last ran the six questions.
Related Resources
- General definition of labour hire services
- Labour hire law changes
- Licence check across states
- Buying labour hire
- How procurement teams score
- Using more than one supplier
Common Questions About the Labour Hire Definition in Victoria
1. Does the 1 October 2026 change mean more of my suppliers need a licence?
The Authority says that in most cases the change does not affect when a licence is required. It makes clearer that a licence is needed to supply labour anywhere in a supply chain. So look first at any supplier that sits between you and the business that employs the workers, and ask the Authority's enquiries team or an adviser if you are unsure.
2. Is a contractor paid by the hour always labour hire?
No single factor settles it. Asking "is my contractor labour hire" means weighing the whole mix. Payment by reference to labour is one factor the Authority lists, and it says the factors are not determinative on their own. Hourly pay with a filled role, your direction and no substantial non-labour inputs points one way. Hourly pay inside a specialised service looks different.
3. Does a defined scope of work settle whether a supplier is labour hire?
Not by itself. A defined scope counts against labour supply, but the Authority says to look at the real substance of the arrangement, not just what the contract says. If the paperwork describes a defined scope while your supervisors direct individual workers every day, take that gap to an adviser.
4. What happens to a host that uses a supplier that should have been licensed?
The Authority says hosts must only use licensed providers and that substantial penalties may apply to a host that engages an unlicensed provider. Its host page has the current amounts. It also says a host can face interruption to its business if the Authority finds an unlicensed provider has supplied it with workers, and that hosts may be investigated.
5. Where do I check whether a supplier holds a licence?
Use the Labour Hire Licence Register on the Authority's website, which can be filtered to show licensed providers. Do not rely on paper documents alone, because the Authority warns they can be illegitimate or out of date. Keep a dated record of each check.
Sort Every Contractor Before the Next Invoice
Start with the contractors who are paid by the hour and take daily instructions from your supervisors. Put each one through the six questions, write the answer next to the register result, and send anything unclear to the Authority's enquiries team or an adviser. Run the exercise again whenever a contractor's tasks, pay basis or people change.
