Last updated January 2024
This chapter explains the legal obligations of the host employer and labour hire agency, and how to meet them.
What is labour hire?
Labour hire is when a host employer sources labour from a labour hire agency.
A host employer can source an on-hired employee from a labour hire agency to work on assignment for an agreed period, which can range from a single day to many years.
When an assignment reaches its contracted end date, or if either the host employer or the agency terminates the assignment, the on-hired employee must wait to be reassigned to another host employer. During this time, the on-hired employee is described as being ‘on the books’ of the agency, rather than in paid employment with the agency.
Benefits of labour hire
If you are the host employer, using labour hire can benefit you by:
- allowing you to source employees quickly to meet temporary operational needs;
- enabling you to fulfil specific tasks or projects without committing to permanent or ongoing employment;
- reducing your administrative burden because the agency is responsible for the financial and administrative overheads associated with employment, including payroll tax, superannuation payments and workers’ compensation; and
- reducing your liability for employment-related obligations.