Thinking | 16 July 2018

Labour Hire Licensing update

After a lengthy gestation, the Victorian Parliament finally passed the Labour Hire Licensing Act on 20 June 2018. Victoria had the benefit of observing the earlier legislation passed by South Australia and Queensland and their implementation. The new legislation benefits from this perspective to provide clearer drafting, but the final result is to further complicate the situation by moving further away from synchronisation across the States.

The Queensland, South Australian and Victorian legislation seek a common goal of imposing regulation to strike at the exploitation of workers and restore integrity to the labour hire industry. They each impose an obligation on labour hire firms to be licensed, with online registers to be available in each State for public inspection. Each State makes it an offence to trade without a licence or to engage the services of an unlicensed labour hire firm. There are slight differences between the States as to who constitutes a ‘fit and proper’ licensee but the main focus is on financial viability, and corporate and safety compliance.

However, the schemes fall down in their definitions and scope of operation, which create divergences in interpretation between the three States, and their impact on national labour hire operations:

State or TerritoryPayroll tax treatment of JobKeeper
VictoriaPayments made to employees under the JobKeeper program will be exempt from payroll tax to the extent that the payments exceed the employee’s normal wages. For example if your employee would ordinarily receive $700 per fortnight and you are now required to pay them $1500 per fortnight under the JobKeeper scheme, the additional $800 would not be subject to payroll tax.

Where an employee has been stood down and is receiving JobKeeper, the full $1,500 will be exempt from payroll tax.
New South WalesPayroll tax is payable on the JobKeeper payment except to the extent that the JobKeeper payment is in excess of what the employee would ordinarily have been paid. See the example for Victoria above.

Where an employee has been stood down and is receiving JobKeeper, the full $1,500 will be exempt from payroll tax.
Western AustraliaPayroll tax will only be payable on the wages paid in excess of the JobKeeper payment amount.
TasmaniaPayroll tax will only be payable on the wages paid in excess of the JobKeeper payment amount.
South AustraliaPayroll tax will only be payable on the wages paid in excess of the JobKeeper payment amount.
QueenslandPayroll tax will only be payable on the wages paid in excess of the JobKeeper payment amount.
Northern TerritoryPayroll tax will only be payable on the wages paid in excess of the JobKeeper payment amount.
Australian Capital Territory Payroll tax will only be payable on the wages paid in excess of the JobKeeper payment amount.

 

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Alison Baker

Alison has more than 20 years’ experience in a wide-ranging employment practice, advising private sector and public sector clients...

Sean Sullivan

Sean has practised in insurance litigation since 1992, acting on behalf of defendant insurers and self insured across the...

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