Labour hire agencies are companies that recruit workers and then place them with client businesses for a fee. For working holiday makers, they can be a quick way to find casual work in industries like agriculture, hospitality, warehousing, construction, and manufacturing. But there are important things to understand before you sign up with one.
How does labour hire work?
When you register with a labour hire agency, you become an employee of the agency, not of the business where you actually do the work. The client business tells the agency how many workers they need and for how long. The agency provides those workers and handles their pay, tax, and super on behalf of the client.
From a practical standpoint, you show up at a worksite that belongs to a third-party business, but your payslip comes from the agency. The agency is your legal employer.
What are the advantages?
For working holiday makers, the main advantage is speed. Agencies often have multiple clients and can place workers quickly, sometimes within a day or two of registering. If you need work urgently or are new to an area and do not have local connections, an agency can help you get started.
Agencies also handle all the paperwork. You provide your TFN and bank details to the agency, and they manage tax withholding and super payments. This can simplify things if you are moving between locations frequently.
What are the risks?
Labour hire agencies vary enormously in quality. Reputable agencies pay correctly, comply with Australian employment law, and treat workers fairly. Less reputable ones underpay, misclassify workers, apply excessive deductions for accommodation or transport, or operate in ways that exploit people who do not know their rights.
Some agencies, particularly in the agricultural sector, charge workers for accommodation and transport and then subtract those costs from wages in ways that bring the effective hourly rate below the legal minimum. This practice is illegal but unfortunately still occurs.
Before registering with an agency, check whether they are licensed. Several states in Australia now require labour hire agencies to hold a licence, and operating without one is illegal. You can check licence status through the relevant state authority.
Your rights as a labour hire worker
Your rights as a worker are the same whether you work directly for a business or through an agency. You are entitled to be paid at least the minimum casual rate for your industry, to receive payslips within 24 hours of each pay, to have superannuation paid at 11.5% of your gross earnings, and to work in a safe environment.
You are also entitled to be told clearly what your hourly rate is before you start work, and to receive a copy of any agreement you sign with the agency.
Tax and super through a labour hire agency
Because you are an employee of the agency, your tax is withheld under PAYG and your super is paid by the agency into whichever super fund you nominate. Make sure you give the agency your correct TFN and select Working Holiday Maker on your TFN declaration form — the same rules apply as with any other employer.
Check your payslips to confirm that the correct 15% working holiday maker tax rate is being applied and that super is being paid. If something looks wrong, contact us or reach out to Fair Work Australia.
Need help?
Working through a labour hire agency and unsure about your tax or super?
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