October 2026: What the Victorian labour hire licensing changes mean for recruitment businesses
Labour hire licence changes in 2026: If you operate a recruitment agency or plan to start a labour hire business in Australia, understanding licensing requirements is an essential part of building a compliant business.
In Victoria, labour hire licensing requirements changed during 2026. New requirements took effect on 1 June, followed by amendments to the definition of labour hire services from 1 October 2026.
These labour hire licence changes make it particularly important for recruitment business owners to review their operating models and determine whether their activities fall within the licensing framework.
What changed in October 2026?
From 1 October 2026, the definition of providing labour hire services under Victoria’s Labour Hire Licensing Act was amended.
According to the Victorian Labour Hire Authority, the amended definition addresses certain recruitment and placement arrangements where a provider recruits or places workers with another organisation and also provides or arranges accommodation for some or all of the period in which those workers perform the work.
Importantly, the arrangement does not necessarily need to involve the recruitment provider employing or paying the workers. Depending on the circumstances, workers may be engaged or paid by the host organisation or through intermediaries.
This means some businesses that previously viewed themselves as recruitment or placement providers should reassess their activities against the amended requirements.
The precise application depends on the arrangement and the relevant legal provisions. Businesses should review the official guidance rather than assume that every recruitment agency is automatically covered or exempt.
Source: Victorian Labour Hire Authority guidance on recruitment and placement services.
Why recruitment businesses should review their operating model
Recruitment agencies operate under different commercial arrangements.
Some introduce candidates to employers who hire them directly. Others supply temporary workers, manage workforce arrangements or operate through more complex supply chains.
The distinction matters because licensing obligations depend on the services a business actually provides, not simply the description it uses for itself.
Business owners should review:
- Whether workers are placed with another organisation or supplied under an ongoing arrangement.
- Who employs, engages and pays the workers.
- Whether accommodation is provided or arranged.
- Whether subcontractors or other intermediaries are involved.
- Which states and territories the business operates in.
- Whether the business holds the licences required for its activities.
This review can help identify whether the business needs to apply for a licence, update its compliance arrangements or seek professional advice.
The June 2026 changes still matter
The October amendments are not the only changes businesses need to consider.
From 1 June 2026, Victoria introduced stronger requirements relating to the suitability of people involved in running or influencing a labour hire business, compliance with relevant laws and financial viability.
Applicants must be prepared to demonstrate that their business is capable of meeting its obligations. Depending on the application, this may involve information about relevant persons, business registrations, financial documents and a business-specific compliance plan.
The compliance plan should explain how the proposed business will operate in practice and how it will meet applicable legal requirements. A generic business plan may not be sufficient.
For new businesses, this means licensing preparation should be part of the startup process, rather than an administrative task left until the business is ready to supply workers.
Source: Victorian Labour Hire Authority’s 2026 licensing changes.
What should you do if you are starting a labour hire business?
If you are planning to establish a labour hire business, consider taking these steps before commencing operations.
1. Confirm whether your activities require a licence
Describe your proposed services, worker arrangements and client relationships. Check the applicable state or territory requirements and obtain advice if your operating model is unclear.
2. Prepare your financial forecasts
Labour hire businesses need to account for wages, superannuation, workers’ compensation, payroll tax where applicable, insurance and other operating expenses.
You should also consider the gap between paying workers and receiving payment from clients. A profitable contract can still create cash flow pressure if working capital is insufficient.
3. Build a business-specific compliance plan
Document how your business will manage worker engagement, pay and conditions, tax and superannuation obligations, workplace health and safety, subcontractors and other relevant requirements.
Your plan should reflect the industry and workforce you intend to supply.
4. Check your application documents
Ensure that the information provided about your business, decision-makers, registrations, financial position and proposed operations is complete and consistent.
The Labour Hire Authority advises applicants to allow time for assessment. Most applicants receive a decision within 60 days, but some applications take longer if further information or investigation is required.
Source: How to apply for a Victorian labour hire licence.
How RecruitArt can help
Understanding licensing requirements is one part of establishing a labour hire business. Preparing the documentation and systems needed to operate compliantly is another.
RecruitArt offers a fixed-fee advisory service for new-business Victorian labour hire licence applications. The service supports applicants with application preparation, financial viability documentation, compliance planning and related administrative requirements.
The aim is to help business owners approach the application process with a clearer understanding of the requirements and a stronger foundation for their proposed operation.
RecruitArt provides advisory support, not a guarantee of approval. The Labour Hire Authority remains responsible for assessing applications and granting licences.
If you are planning to establish a labour hire business, visit RecruitArt’s labour hire licence advisory page to learn more about the service.
Review your labour hire licensing obligations before you launch
The October 2026 amendments are a useful reminder that recruitment and labour hire businesses need to keep their operating models aligned with current requirements.
Whether you are launching a new business or reviewing an existing service, understanding how the rules apply to your specific arrangements can help you identify potential compliance gaps before they become more serious problems.
Start by reviewing the official guidance, documenting how your business will operate and obtaining appropriate advice where necessary.
Planning to start a labour hire business in Victoria? Make licensing and compliance part of your business setup from the beginning.