Labour hire licensing reforms

The South Australian Government has recently made changes to the Labour Hire Licensing Act 2017 (SA) (the Act) that will require all labour hire providers to become licensed by 29 July 2026. Previously, only the providers in five recognised industries were required to be licensed.^[1]

For the purposes of the Act, a person provides ‘labour hire services’ if:

1. in the course of conducting a business the person supplies, to another person (the host), an individual to undertake work; and
2. the individual is a labour hire worker for the person.

A person is a ‘labour hire worker’ if they enter into an arrangement with the other person under which:

1. the other person may supply, to a third person, the individual to undertake work; and
2. the other person is obliged to pay the individual, in whole or part, for the work (whether directly or indirectly through 1 or more intermediaries).

The exceptions:
There are certain exceptions to the requirement for licensing, these include:^[2]

• a business arrangement that falls outside the scope of labour hire arrangements^[3]
• a sole trader who supplies only their own labour
• a partnership of no more than 2 individuals where the supplied worker is a partner
• a company (body corporate) of no more than two directors where the supplied worker is a director or senior manager
• a business is part of a group of entities, that carry on business as a group, and a worker is supplied to work for another entity within the group
• where a public sector employee within the meaning of the Public Sector Act 2009^[4] is seconded or transferred to do work for another person or entity pursuant to an Act
• a registered group training organisation to the extent that the business supplies apprentices or trainees to do work for other persons
• an intermediary or agent being a person who contracts with a business to supply workers, but doesn’t have workers of their own.  Rather the workers are sourced from a labour hire provider, who has the arrangement with the workers to supply them to other businesses and pay them directly
• where the supplied workers are ‘in-house’ employees who:
  • are engaged as an employee on a regular basis
  • can reasonably expect their employment to continue; and
  • perform work primarily for one employer (other than as a worker supplied to a third person to do work for the third person).
• where the workers supplied have an annual wage equal to or exceeding the high-income threshold^[5] under the Fair Work Act 2009 (Cth) and the individual’s employment is not covered by a modern award or enterprise agreement under that Act.

Licensing applications must be lodged online with Consumer and Business Services SA (CBS). As part of this application process, a person must:

• obtain a police check (of directors and responsible persons)
• provide written confirmation of solvency from a chartered accountant, certified practicing accountant or IPA public accountant
• meet fit and proper requirements for those responsible for the day-to-day management and operation of labour hire business; and
• meet business knowledge and experience requirements, (this may require an online course from a listed training organisation).

Applications are published on the public objections register by CBS.  Objections within 14 days can be lodged in writing on the basis that the person(s) are not a ‘fit and proper person’. Applicants are given 14 days to respond to objections before a CBS determination is made to grant or not grant the licence.

Penalties apply:
Pursuant to the Act, the maximum penalties for a person who provides labour hire services without a licence are:

1. in the case of a natural person—$140 000;
2. in the case of a body corporate—$400 000

These same penalties apply to a person who enters into an agreement to receive labour hire services from an unlicensed labour hire provider.  Business should review due diligence practices to ensure that dealings are only occurring now and in future with appropriately licensed providers.

Be ready:
CBS recommend businesses submit their application at least 6 weeks prior to the 29 July 2026 deadline to ensure that they are processed in time.

EMA Legal is able to assist employers with any questions that may arise from this process.

[1] These industries are: horticulture processing, meat processing, seafood processing, cleaning and trolley collection

[2] See here

[3] See here for information about how to differentiate labour hire from other contracting arrangements

[4] A chief executive of an administrative unit or an employee in an administrative unit or other employee of a public sector agency

[5] $183,100 as at the date of this Alert