Australia’s patchwork approach to labour hire licensing is tightening, state by state, and the direction of travel is unmistakably toward a single national framework that will capture almost every agency placing workers with third parties. For businesses that have been operating in states without licensing requirements, the time for assuming it does not apply to them is over.
Licensing schemes have been in place in Queensland, Victoria and the Australian Capital Territory for some years, covering all industries. South Australia had a narrower scheme limited to five sectors — horticulture, meat and seafood processing, cleaning and trolley collection. That changed on 29 January this year, when South Australia’s Labour Hire Licensing (Scope of Act) Amendment Act 2025 came into force, effectively expanding the scheme to cover all labour hire providers across all industries in the state.
The practical consequence is significant. Any business supplying workers to another entity in South Australia for a fee — which captures staffing agencies, recruitment firms, professional services firms providing contracted workers, and many businesses that would not traditionally describe themselves as labour hire providers — now needs a licence. Those not previously required to be licensed have until 29 July 2026 to apply. After that date, operating without a licence carries fines of up to $400,000 for companies and $140,000 for individuals. Even advertising labour hire services without a licence can attract a $30,000 penalty.
The licensing authority in South Australia has recommended that newly captured businesses begin their applications at least six weeks before the July deadline, which means the window to act comfortably is already narrowing.
Victoria’s scheme, which has operated since 2018, is also undergoing legislative changes flagged in the Australian Industry Group’s March 2026 workplace relations report. The federal government, meanwhile, has been consulting on a national framework that would consolidate the existing state and territory schemes into a single set of obligations applying across the country. That proposal involves fit and proper person tests for those responsible for managing a labour hire business, financial viability requirements, and obligations on both providers and host employers.
The host employer’s obligation is worth emphasising. Under existing state schemes, and under the proposed national model, it is not only the agency that faces penalties. A business engaging an unlicensed labour hire provider without a reasonable excuse can also be held liable. For HR teams and procurement managers who have historically assumed compliance is the agency’s problem, that assumption carries legal risk.
For recruitment agency owners operating across multiple states, the current environment means navigating four separate schemes with varying requirements, fees, reporting timelines and penalty structures. A national framework would simplify that considerably, though the transition itself will require preparation.
What is clear is the direction. Labour hire licensing in Australia is expanding in scope, tightening in enforcement and moving toward national consistency. Agencies that operate in South Australia and are newly captured by the expanded scheme have a narrow window to get licensed before penalties apply. Those elsewhere should be watching the federal consultation process closely, because the framework being developed will eventually apply to them too.
Sources: Labour Hire Licensing (Scope of Act) Amendment Act 2025 (SA); Consumer and Business Services SA; Piper Alderman; Australian Industry Group Significant Workplace Relations Issues Report, March 2026; Department of Employment and Workplace Relations national consultation paper
