Closing the Loopholes Bill

Equal pay for subcontractors in labour hire agreements

Key Points regarding ‘Labour Hire Loophole’

Which businesses in the construction industry are affected?

Businesses who engage or provide labour for example:

• Builders/head contractors
• Crane and rigging companies
• Labour hire companies
• Steel fabricators
• Formworkers
• Scaffold companies

What are labour hire agreements?

• Labour hire agreements can be between subcontractors and builders and can also be between one subcontractor company (e.g. crane company) and another subcontractor company (e.g. another crane company, steel fabricator, formwork company e.t.c).

Before the legislative change?

• Before Closing the Loopholes, there was no requirement for companies engaging a labour hire company to pay at the same rate as their employees.

Changes in law

• Proposed new laws require the company engaging a labour hire company to ensure that the rate of pay is the same rate of pay as their employees.

Are there exclusions?

• It will not apply to the provision of a service, rather than the supply of labour.
• If an employer directs, supervises or controls work being performed for the host this is likely to indicate that the arrangement is for the provision of a service rather than the supply of labour.

Same job, same pay means that if a company engages subcontractors, they must be paid at least the same rate that they would pay their employees for similar work.

If you have any questions or need specific advice on navigating these legislative amendments, Level Playing Field is here to help.

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