Victoria introduced changes to its labour hire laws from 1 October 2026. These changes in the law clarify when an arrangement is considered labour hire and when businesses involved in supplying workers may need a licence.
For builders and construction businesses, the key issue is how workers are supplied in practice. This is particularly relevant where workers move through subcontractors or other intermediaries before reaching the site.
Separate construction-specific changes are also proposed for later in October. These would extend labour hire licensing requirements to certain activities on major Victorian Government-funded projects. As at 5 October 2026, these proposed changes have not yet commenced.
This article explains what changed on 1 October, what is still proposed, and what builders should check when engaging or supplying labour in Victoria.
Key Takeaways
- From 1 October 2026, Victoria changed how labour hire arrangements are defined.
- Businesses supplying workers through intermediaries may also need a licence.
- Builders should look at how the arrangement works, not just what the contract calls it.
- Proposed changes anticipated from 29 October may affect specified construction activities on major Victorian Government-funded projects.
What Changed in Victoria’s Labour Hire Laws on 1 October 2026?
The 1st October change in labour hire laws clarifies whether an arrangement has the character of labour supply. Businesses need to consider whether the arrangement is wholly or principally for supplying labour.
Under the amended definition, a business may provide labour hire services when an arrangement is wholly or principally for supplying labour and the provider must pay the workers for that work, either directly or indirectly. The provider may pay the worker directly or indirectly through one or more intermediaries.
The Labour Hire Authority says businesses need to consider the real substance of the relationship, not simply what the contract is called. This matters in construction industry, as workers may be supplied through several contractors and intermediaries before they reach the builder or head contractor responsible for the site.
For example, a company may obtain workers from another provider and then supply those workers to a builder. From 1 October, the legislation makes it clearer that an intermediary involved in that supply chain can also be providing labour hire services and may need its own licence.
What Does “Supply of Labour” Mean in Practice?
Whether an arrangement qualifies as labour hire depends on how the relationship works as a whole, rather than on any single feature of the contract or working arrangement.
According to Labour Hire Authority guidance, relevant factors can include whether workers are supplied to fill roles rather than deliver a defined result, whether payment is based on hours or days worked, who directs the workers, and whether the provider contributes substantial materials, equipment or specialist expertise.
For builders, the practical arrangement matters more than the label on the contract. Calling a business a “subcontractor” does not by itself determine whether the relationship falls outside labour hire licensing requirements.
A subcontractor engaged to deliver a clearly defined service or outcome may operate differently from a business whose main role is supplying workers to your existing site team. The complete arrangement needs to be considered before deciding whether labour hire licensing applies.
How Do the Changes Affect Builders and Construction Businesses?
Construction companies in Victoria have already been required to use licensed providers when they engage labour hire services. The October changes do not replace that obligation. They clarify situations where businesses within more complicated supply chains may also fall within the licensing system.
That may be relevant if your business:
- sources workers through multiple contractors or intermediaries
- engages companies primarily to provide additional workers to your site
- pays for supplied workers according to hours, days or weeks worked
- directs and supervises workers provided by another business
- supplies workers onward to another builder, contractor or host business
- uses subcontracting arrangements where it is unclear which business is actually providing the labour
None of these factors automatically determines that an arrangement is labour hire. However, they are good reasons to review how your workforce arrangements operate in practice.
Which Construction Activities May Be Covered Later in October?
The Victorian Government has also proposed specific labour hire licensing changes for construction in 2026.
Under the proposal considered through the regulatory consultation process, specified construction activities would be brought within the labour hire licensing scheme when performed on Victorian Government-funded construction projects with a total cost above $50 million.
| Proposed activity | What the proposal covers |
| Traffic management | Traffic management or traffic control on qualifying projects |
| Crane operation | Crane operation, including driving, rigging, dogging, and spotting |
| Site security | Security guarding or crowd control |
| Concreting | Concreting work on qualifying projects |
The proposal is limited to specified activities on qualifying Victorian Government-funded projects, so it would not automatically bring every builder, subcontractor or construction project in Victoria within these additional requirements.
As at 5 October 2026, the Labour Hire Authority says the construction changes are anticipated to take effect later in October, following completion of the regulatory process. Businesses should therefore check the final regulations before assuming the proposed 29 October requirements have commenced.
Does a Builder Need a Labour Hire Licence in Victoria?
A builder does not generally need a labour hire licence simply because it engages workers through a licensed labour hire provider. If a builder receives workers from a labour hire company but does not supply those workers to another business, the builder is acting as the host and must use a licensed labour hire provider.
Licensing becomes more relevant when your business does more than receive workers and begins supplying or on-supplying them to another company.
For example, if you obtain workers through one business and then on-supply those workers under a separate arrangement that is principally for labour, you may also be considered a labour hire provider. The October amendments specifically clarify licensing responsibilities within these types of supply chains.
Builders operating across several contracting tiers should therefore consider both sides of the arrangement: where the workers came from and whether the business is supplying them onward.
What Should Builders Check Before Engaging Labour?
Builders do not need to reassess every routine labour request from scratch, but they should understand how workers are being supplied. A few practical checks can help identify arrangements that may require closer review.
Before engaging workers, it is worth checking:
- Who employs or pays them?
- Which business supplies them to your site?
- Who directs their day-to-day work?
- Are you paying for labour time or a defined result?
- Does another business sit between the workers and your company?
You should also check the Labour Hire Authority’s register before engaging a labour hire provider. The Authority recommends checking the provider directly on the LHA register rather than relying on documents or assurances from the provider.
Where several businesses sit between the worker and the final host, review each part of the supply chain rather than assuming the licence held by one company covers everyone else.
If you are unsure whether an arrangement requires a labour hire licence, seek professional advice. This is particularly important when workers pass through several businesses before reaching your site.
What Happens If a Builder Uses an Unlicensed Labour Hire Provider?
Using an unlicensed provider where a licence is required can expose both the provider and the business engaging them to substantial penalties.
For the 2026–27 financial year, providing labour hire services without a required licence or engaging an unlicensed provider can attract maximum penalties of $669,120 for a corporation and $167,280 for an individual.
There can also be an immediate operational problem. If a provider is not legally permitted to supply labour, a host may have to stop using that provider, which can affect workforce availability on an active project.
That is why checking licence status should form part of the procurement process rather than being left until workers are already on site.
What Do the Changes Mean for Existing Subcontracting Arrangements?
The October amendments do not automatically turn existing subcontractors into labour hire providers. The question is whether the relationship is wholly or principally about supplying labour.
The Labour Hire Authority considers several factors when assessing an arrangement. These factors include who directs the workers and how the contractor is paid. It may also consider whether the workers fill roles within the host business and whether the contractor provides significant resources beyond labour. No single factor decides the issue on its own.
For builders, these assessment factors make October a sensible time to review arrangements that fall somewhere between traditional subcontracting and straightforward labour hire.
Choosing Construction Labour Hire in Melbourne
Compliance is only one part of labour planning. Builders also need to know that the people arriving on site are suitable for the work and ready to contribute.
When engaging any labour hire provider in Victoria, builders should still check the provider’s current licensing status and make sure their own workforce arrangements comply with the applicable requirements.
Wrapping It Up
For Victorian builders, the October 2026 changes make it more important to understand who is actually supplying the workers on site and how each business in that supply chain is operating.
From 1 October, businesses need to consider whether an arrangement is genuinely about delivering a service or is principally about supplying workers. The amendments also make licensing responsibilities clearer where labour moves through intermediaries before reaching the final host.
Separate construction-specific changes are expected later in October for certain activities on major Victorian Government-funded projects. Until those regulations take effect, builders should distinguish those proposed requirements from the labour hire definition changes already in force from 1 October.
If you rely on flexible construction labour, now is a good time to check your providers, review any multi-tier supply arrangements, and make sure you understand who is responsible for supplying the workers on your site.
Labour Revolution supports Melbourne builders and construction teams with screened general and skilled labour that is suited to changing project requirements. Contact our team if you need reliable construction labour for an upcoming project.
Frequently Asked Questions
What changed in Victoria’s labour hire laws on 1 October 2026?
The definition of providing labour hire services was amended to focus more clearly on whether an arrangement is wholly or principally for the supply of labour. The changes also clarify that businesses supplying workers through intermediaries can require their own labour hire licence.
Do all construction subcontractors need a labour hire licence in Victoria?
No. An arrangement needs to be considered based on its real substance. A genuine service arrangement may differ from one principally involving the supply of workers. Factors such as who directs the work, how payment is calculated and whether the contractor provides substantial non-labour inputs can be relevant.
Do the October 2026 construction changes apply to every Victorian building project?
The construction-specific proposal does not apply to every project. The current proposal covers specified activities on Victorian Government-funded construction projects costing more than $50 million. As at 5 October 2026, these changes are anticipated for later in October and have not yet commenced.
Can a builder use an unlicensed labour hire provider?
No, if the business is providing labour hire services that require a licence. Victorian hosts must use licensed labour hire providers. Maximum penalties for engaging an unlicensed provider in 2026–27 are $669,120 for a corporation and $167,280 for an individual.
How can builders check whether a labour hire provider is licensed?
The Labour Hire Authority maintains a public register of licensed providers. Builders should check the provider on the register before engaging them and can use the Authority’s provider-following service to receive updates about changes to licence status.
Disclaimer: This article provides general information about Victoria’s labour hire licensing requirements and does not constitute legal advice. Requirements can depend on the specific structure of a business arrangement, so seek professional advice if you are unsure whether a licence is required.
