The Victorian Government has recently released draft regulations and a regulatory impact statement detailing how Victoria’s labour hire licensing legislation will operate in practice.

The Victorian Chamber of Commerce and Industry has opposed the labour hire licensing scheme since it was announced by the Government last year.  The scheme will impose additional costs and red tape on business operating in the sector.

Key elements of the scheme include:

• Commencement in early 2019
• A requirement that all labour hire providers be licenced, pay an annual fee and reapply for their licence every three years
• A requirement that licence holders and directors of labour hire firms pass a fit and proper person test
• A requirement for licence holders to declare and demonstrate that they comply with legal obligations including taxation, superannuation, occupational health and safety, workers' compensation, workplace laws, migration laws and accommodation standards
• A requirement for licence holders to provide annual reports to the regulator including information on the number, type, industry and pay and conditions of workers supplied
• The establishment of a public register of licence holders
• A prohibition on any business from entering into an arrangement for labour hire services with an unlicensed provider, with penalties of up to $128,000 for individuals and $515,000 for a body corporate
• Allowing any person to make an objection to a licence application
• The establishment of a Labour Hire Licensing Authority headed by a Commissioner and supported by inspectors with powers to enter business premises and seize documents

New elements of the scheme detailed in the regulations include a requirement that cleaning businesses be licenced, even if they are not strictly providing labour hire services. This will add to the costs being imposed on cleaning businesses by the portable long service leave scheme currently before the Victorian parliament.

The regulations also detail the proposed fee structure with application and annual licence fees to be based on the turnover of labour hire businesses split into three tiers.

Businesses with a turnover under $2 million will pay an application fee of $1551 and an annual fee of $1,072. Businesses with a turnover between $2 million and $10 million will pay an application fee of $4,160 and an annual fee of $2,876. Businesses with a turnover of over $10 million will pay an application fee of $7,677 and an annual fee of $5,308.

The Regulatory Impact Statement shows that over a ten year period, total fees under the Victorian scheme will be more that 50 per cent higher in Victoria than for the recently established Queensland scheme.

The regulations are open for comment until September 5 and the Victorian Chamber will be making a submission. To inform the Victorian Chamber’s input to government on the regulations, or to find out more about how the scheme may affect your business, please email Hugh Horsfall from the Policy and Advocacy Team or call (03) 8662 5106.