Same Job, Same Pay: what it actually means when you use labour hire

If you use labour hire, "Same Job, Same Pay" is the reform most likely to change your numbers over the next few years — and it's the one clients ask us about most nervously. The short version is that a labour hire worker on your site can, in the right circumstances, be ordered onto the same rate of pay as your own employees doing the same work. The longer version has a fair few conditions attached, and most businesses either over-worry about it or haven't looked at it at all.

Here's the honest walk-through: what the law does, who it applies to, where it doesn't, and why a provider who was already paying properly treats it as a non-event.

What the law actually does

The formal name is a regulated labour hire arrangement order. It comes out of the 2023 Closing Loopholes changes, and while the provisions commenced on 15 December 2023, the orders themselves — and the pay obligation that flows from them — only took effect from 1 November 2024.

The mechanism is an application to the Fair Work Commission. If the Commission makes an order, the labour hire workers covered by it must be paid a protected rate of pay: at least the full rate they'd get if the host's own enterprise agreement (or other covered instrument) applied to them directly. It's not the award floor — it's the host's rate.

"Full rate" is broad. It captures the base rate plus incentive-based payments and loadings, monetary allowances, and overtime and penalty rates — the money side of the host's instrument. It does not pull across non-pay conditions like rostering, leave rules or how the host manages its own staff. So the order is about the number on the payslip, not about turning on-hired workers into your employees.

The old logic of labour hire as a way to get the same work done for less no longer holds where an order is in place. That's the whole point of the change, and it's worth naming plainly.

Who can apply — and against whom

Three groups can apply to the Commission for an order: the labour hire workers themselves, a union, or the host employer. In practice most applications so far have come from unions in heavily-organised industries.

An order can only be made where the labour hire workers are supplied to perform work for a host and are paid under the labour hire provider's instrument rather than the host's. The Commission looks at whether the work is performed for the host's benefit — and importantly, there doesn't need to be a formal contract between provider and host for the arrangement to count. The reality of who the work is for is what matters.

The first order under these provisions made the point concretely. In a matter brought by the Mining and Energy Union, the Commission dealt with WorkPac labour hire workers engaged at the Batchfire Callide coal mine in Queensland, and the order required those workers to be paid in line with the host's enterprise agreement rather than the labour hire rate. Several hundred workers were covered. It was a mining case, in a unionised operation with a rich enterprise agreement — which is exactly the setting these applications tend to come from.

Where it does NOT apply

This is the part worth reading closely, because the exemptions are wider than the headlines suggest. The Commission must weigh several carve-outs before making an order.

• Small business hosts. If the host employer has fewer than 15 employees, the framework doesn't apply. A genuinely small operation using a few on-hired workers is outside it.
• Short-term arrangements. Where a worker is supplied to a host for a short period — generally three months or less — an order isn't available. Covering a spike, a leave gap or a short project sits outside the regime.
• Training arrangements. Workers covered by a genuine training arrangement aren't entitled to the protected rate on that basis.
• Service, not labour. The big one. The Commission must be satisfied the arrangement is the supply of labour rather than the provision of a service. If your provider is delivering a defined, outcome-based service — running a function, managing an output, bringing its own systems and supervision — as distinct from simply putting bodies on your line under your direction, that's a different thing, and orders aren't meant to reach it. The line between the two isn't always obvious, and it's fact-specific, so it's not a label you can just paint on an arrangement to escape the rules.

There's also a general fairness backstop: the Commission can decline to make an order where it wouldn't be fair and reasonable in all the circumstances, though in practice that's considered mainly when a party raises it.

Where this lands on you as a host

If you use labour hire and none of the exemptions clearly apply — you're not a small business, the arrangement isn't short-term, and it's plainly labour rather than a packaged service — then the honest position is this: an order, if one were made, would move your on-hired workers onto your own enterprise rates. If your business runs on an enterprise agreement that pays well above the award, that's the gap to be aware of. If you pay at or near award, there's far less daylight for an order to close.

The practical read for most of our clients — warehousing, logistics, light industrial, hospitality — is that Same Job, Same Pay is a bigger deal in mining, aviation and large enterprise-agreement sites than it is on a typical award-based floor. But "less exposed" isn't "ignore it." The right move is to know your own rates, know how your provider pays, and stop treating the wage gap as the reason to use labour hire in the first place. Speed, flexibility, the provider carrying the employment risk and admin — those are the real reasons labour hire earns its margin, and none of them depend on underpaying the worker.

Why we're genuinely fine with it

We'll be straight about our stake here. A provider whose model quietly relied on paying on-hired workers less than the host's own crew for the same job has a problem with this reform. We never did, so we don't.

When you take on workers through us, we are their legal employer — we owe their wages, their super and their entitlements — and we've always priced on paying people properly for the work, not on finding a rate below the host's. Same Job, Same Pay formalises a floor we were already standing above. If anything, it's useful: it takes wage undercutting off the table as a way for cut-price competitors to win work, and it makes the conversation with you about what actually matters — can we get the right people on site, fast, compliantly, and keep them.

If you want to know exactly what you're paying for when you use us, our breakdown of what casual, labour hire and permanent staff really cost lays out every component, and our piece on labour hire versus recruitment covers when on-hire is the right tool at all.

A short checklist

• Know whether you run an enterprise agreement and how its rates compare to what your provider pays on-hired workers. That gap is the whole exposure.
• Check the exemptions honestly — small business, short-term, training, or genuine service — rather than assuming one applies.
• Ask your provider how they pay. A provider paying properly has a simple answer; a vague one is a signal.
• Don't rely on the wage gap. If the only reason a labour hire arrangement stacks up is that it pays the worker less than your own crew, this reform is aimed squarely at it.

This is general information, not legal advice — whether an order could apply turns on your specific arrangement, your instrument and the facts, so get advice on your own situation before you make a call. If you'd like to talk through how we price and pay the workers we place, get in touch and we'll walk you through it plainly.