What changed
The Closing Loopholes changes to the Fair Work Act let the Fair Work Commission make a regulated labour hire arrangement order. Under an order, the labour hire employer must pay covered employees at least the protected rate of pay. This is the full rate the host would pay under its enterprise agreement or other covered employment instrument, including penalty rates, loadings, allowances, overtime and bonuses. The worker gets the higher of that rate and their own award or agreement rate.
A labour hire employee, a host employee, a union representing either, or the host can apply. Labour hire employers cannot. The Commission can make an order where the host's workplace agreement would cover the work, the host is not a small business employer and the arrangement is mainly a supply of labour rather than a service. The Commission also considers whether making the order is fair and reasonable.
Engagements of three months or less are generally exempt, as are training arrangements. The Commission can set a different exemption period in some circumstances.
Anti-avoidance rules prohibit hosts and labour hire employers from trying to stop an order being made, or avoiding one by swapping in independent contractors or other labour hire arrangements.
Who it affects
- Hosts with an enterprise agreement or other covered workplace instrument that use labour hire workers to perform work covered by that instrument.
- Recruitment and labour hire agencies supplying workers to those hosts, who must pay the protected rate once an order applies.
- Labour hire employees covered by a Fair Work Commission order, subject to exemptions such as short-term placements and training arrangements.
What to do
- Check the Fair Work Commission's list of orders for any host you supply or labour hire provider you use.
- Ask whether each arrangement is a supply of labour or a service: who directs and supervises the work, whose systems are used, and how specialised it is.
- Hosts: be ready to answer written requests from labour hire employers for the pay details they need to calculate the protected rate.
- Track how long each placement runs, since short engagements are generally exempt.
How Accelerate handles it
Accelerate manages payroll and workforce compliance for recruitment agencies and enterprise clients engaging contingent workers. Where a Same Job, Same Pay order applies, we work with clients to identify the required protected rate and ensure covered employees are paid correctly. To review your labour hire arrangements, talk to a workforce specialist.
Change history
| Page created. | |
| "Summary", "What changed", "Who it affects", "What to do", "How Accelerate handles it" updated. |
Earlier versions of this page are kept on file and can be provided on request.