For HR Managers

HR Manager's Labour Hire Compliance Checklist

12 items to verify before a labour hire provider supplies workers to your site. Australia 2026.

Direct answer

Before a labour hire provider supplies workers to your site in 2026, an HR Manager should verify twelve items: state labour hire licence (VIC/QLD/SA prescribed industries), workers' compensation Certificate of Currency, public liability Certificate of Currency, Modern Award classification fit, casual loading compliance, superannuation rate (12% from 1 July 2025), payroll tax handling, Same Job Same Pay (SJSP) order applicability, WHS induction and ticket verification, payroll cut-off and timesheet process, conversion-to-permanent terms, and licence renewal date alignment with project end.

Most labour hire disputes stem from one of these twelve items going unverified at engagement.

Why this matters for HR (not just procurement)

Procurement signs the contract. HR lives with the workforce. When something goes wrong — a worker injury, an underpayment claim, a Fair Work audit, a payroll tax assessment — HR is in the room.

This checklist sits squarely in HR's lane: workforce compliance, employment relationship integrity, and risk management. It's worth running through before procurement closes a labour hire engagement, not after.

The 12-point pre-engagement checklist

1

State labour hire licence — current and verifiable

What to verify: The provider holds a current labour hire licence in the state where work will be performed (VIC, QLD, or SA for prescribed industries). Search the public register; save a PDF.

Why it matters: Engaging an unlicensed provider in VIC, QLD or SA (for prescribed industries) is an offence for both the provider AND the host client. Corporate penalties exceed $400,000.

Red flag: Provider can't produce the licence number or it doesn't match the public register.

2

Workers' compensation Certificate of Currency

What to verify: Current Certificate from the relevant state authority. Policy name matches the provider's legal entity. Expiry date covers your engagement.

Why it matters: If a worker is injured on your site and the provider's workers' comp isn't current, your host PCBU obligations under WHS expose you to direct liability.

Red flag: Certificate names a different entity, has lapsed, or excludes your industry.

3

Public liability insurance Certificate of Currency

What to verify: Minimum $20M public liability cover. Policy current. Names the provider's legal entity correctly.

Why it matters: Public liability covers third-party property damage and injury caused by the worker. If the provider's cover is inadequate, your insurance picks up the gap.

Red flag: Cover under $10M; insurer is unfamiliar; policy expires inside the engagement.

4

Modern Award classification fit

What to verify: The provider has classified each worker under the correct Modern Award and the correct level within that award (CW1, CW4, C10, Grade 4, etc.).

Why it matters: Misclassification is the single most common labour hire dispute trigger. Underclassification creates underpayment liability; overclassification inflates your invoice.

Red flag: Provider can't name the specific Modern Award and classification level for each worker.

5

Casual loading correctly applied

What to verify: Casual workers are paid the 25% casual loading on top of the base hourly rate. This should be visible on a sample timesheet.

Why it matters: Failure to apply casual loading is a Fair Work breach and exposes the host client to follow-on claims if the worker later argues for permanent entitlements.

Red flag: Sample timesheet doesn't itemise casual loading.

6

Superannuation at the correct rate

What to verify: Provider is paying 12% superannuation on ordinary time earnings (per ATO, effective 1 July 2025). Super is paid to the worker's nominated fund, quarterly at minimum.

Why it matters: SG underpayment is an ATO matter. Host clients increasingly carry reputational risk through procurement compliance programs.

Red flag: Quote shows super under 12%, or provider can't confirm payment cadence.

7

Payroll tax handling

What to verify: Provider is registered for payroll tax in each state where they operate and is including state payroll tax in the all-in charge rate (SA 4.95%, NSW 5.45%, QLD 4.75%).

Why it matters: If the provider isn't registered, state revenue offices can pursue host clients in some circumstances.

Red flag: Provider isn't registered in the relevant state, or payroll tax isn't itemised in the rate breakdown.

8

Same Job Same Pay (SJSP) order applicability

What to verify: Whether your site is subject to an SJSP order under the Fair Work Act. SJSP requires labour hire workers to be paid no less than the equivalent direct-employee rate.

Why it matters: SJSP applies site-by-site where ordered by the Fair Work Commission. If your site has an order, the provider's rate must reflect it. Non-compliance is a Fair Work breach for both provider and host.

Red flag: Provider isn't aware of SJSP, or hasn't asked whether your site is subject to an order.

9

WHS induction and ticket verification

What to verify: Workers arrive with verified tickets (white card, forklift LF/LO, EWP, working at heights, confined space). Provider has completed site-specific induction. WHS responsibility split is documented.

Why it matters: As host PCBU you carry primary WHS duty. Verifying tickets and inductions at engagement (not at incident) is the cheapest compliance step.

Red flag: Provider doesn't verify tickets centrally or can't produce ticket evidence on request.

10

Payroll cut-off and timesheet process

What to verify: Provider's pay cycle, timesheet cut-off day and time, weekend penalty rate interpretation policy, and dispute resolution process.

Why it matters: Most worker pay disputes — and most host invoice disputes — stem from timesheet ambiguity, not bad faith. Lock the process down at engagement.

Red flag: Provider can't articulate the timesheet cut-off or has no documented penalty rate interpretation policy.

11

Conversion-to-permanent terms

What to verify: If your engagement might lead to converting a labour hire worker, the provider's conversion fee structure (some charge, some waive after a minimum engagement, some graduated).

Why it matters: Conversion ambiguity creates HR pain later. Most labour hire engagements that go well eventually face this question.

Red flag: Conversion clause is absent or unreasonable (e.g., 40%+ of annual salary as conversion fee).

12

Licence renewal date vs project end date

What to verify: The provider's labour hire licence (where applicable) doesn't expire mid-engagement. Licences are typically 12-month and require annual renewal.

Why it matters: A lapsed licence mid-engagement converts a compliant engagement into an unlicensed one — and triggers the host client offence.

Red flag: Licence expires within 60 days of engagement start and the provider hasn't booked a renewal.

The pre-engagement document pack — one email

Saves three weeks of back-and-forth. Copy and send.

Subject: Pre-engagement compliance pack — [your company name]

Hi [provider contact],

Before we proceed, our HR / procurement compliance process requires the following:

1. Current state labour hire licence (PDF or register link)
2. Workers' compensation Certificate of Currency
3. Public liability insurance Certificate of Currency ($20M+ cover)
4. Sample timesheet showing rate breakdown — base wage, casual loading, super, OT / penalty rate application
5. Modern Award and classification levels you'll be using for the roles in scope
6. Payroll cut-off day and weekend penalty rate interpretation policy
7. Conversion-to-permanent fee schedule
8. WHS responsibility split (general WHS vs site-specific WHS)
9. Confirmation of payroll tax registration in [state]
10. Awareness of Same Job Same Pay orders applicable to our site (if any)

Happy to discuss any of the above. Looking forward to proceeding once we have the pack.

A reputable provider will return this within 1–3 business days. If they push back, query the language, or take more than a week — that's your answer.

Frequently asked questions

What do HR Managers need to check before engaging a labour hire provider in Australia?

Verify twelve items: state labour hire licence (VIC, QLD, SA prescribed industries), workers' compensation Certificate of Currency, public liability insurance, Modern Award classification fit, casual loading, superannuation rate (12%), payroll tax handling, Same Job Same Pay order applicability, WHS induction and tickets, payroll cut-off, conversion terms, and licence renewal date alignment with project end.

What's the host client's liability if a labour hire worker is injured on site?

Primary WHS duty sits with the host PCBU. The labour hire provider holds workers' compensation, but the host's WHS obligations are direct — you control the work environment. Verify the provider's workers' comp Certificate of Currency before engagement and ensure site-specific induction is complete.

Is the labour hire agency or the host client the employer?

The labour hire agency is the employer for wages, super, workers' compensation, payroll tax, leave and award purposes. The host client controls the day-to-day work direction. Both parties carry WHS duty under the WHS Act.

What's Same Job Same Pay and does it affect labour hire rates?

SJSP is a Fair Work order that requires labour hire workers on a covered site to be paid no less than the equivalent direct-employee rate for the same work. It applies site-by-site where an SJSP order has been made by the Fair Work Commission. Where SJSP applies, labour hire rates can be higher than the standard award-rate basis.

How often should HR re-verify a labour hire provider's compliance?

At engagement, at every contract renewal, and any time the provider's licence approaches expiry. Workers' compensation policies are typically annual. Labour hire licences are typically annual. Build the re-verification into your procurement renewal cycle.

Need a labour hire provider with a complete pre-engagement pack?

EIR Labour Hire is an Australian family-owned labour hire company, operating since 2003 across SA, NSW and QLD. We supply labourers, operators, tradies and admin support across civil, construction, manufacturing and warehousing. Current labour hire licences in SA and QLD. Our pre-engagement pack is sent within one business day of request.

1800 LABOURWhat's included in a charge rate

Australian family-owned since 2003 — Labour Hire That Works For You