What Is Labour Hire? Australian Government ICT Guide

Labour hire is when a firm employs and pays a worker, then supplies that worker to a host business for a fee. If a department sets your daily tasks but another company issues your payslip, who do you ask about leave, and who employs you? That split confuses candidates, recruiters and clients, especially in government ICT, because the workplace and the employer aren't the same organisation.

Table of Contents

• What Labour Hire Means in Australia
  • A government ICT example
• Labour Hire Compared with Contracting and Permanent Jobs
  • The hourly rate trap
• Who Does What in a Labour Hire Placement
  • Where duties overlap
• What Labour Hire Means for Workers, Pay and Leave
  • The worker trade-off
• Where Government ICT Labour Hire Fits Among APS Jobs
  • Three routes into government ICT work
• How BuyICT Labour Hire Works Under DMP2
  • Role categories readers search for
• How to Test Whether Your Arrangement Is Labour Hire
  • The Victorian warning
• Confirm Your Arrangement Before You Recruit or Apply

What Labour Hire Means in Australia

Labour hire is when a firm employs and pays a worker, then supplies that worker to a host business for a fee.

That's the definition you can repeat to a candidate or client. It's a three-party model with clear roles.

• Worker: the person who does the work at the host's site or in its systems.
• Labour hire firm: the legal employer that recruits, employs and pays the worker.
• Host business: the organisation that buys the labour for a fee and directs day-to-day tasks.

Think of the firm as the payroll department that employs the person, while the host is the client running the job site. The Australian Bureau of Statistics labour hire workers release reflects this separation between the employment contract and the operational workplace. The firm and host hold a separate commercial agreement, so the worker can sit inside one organisation while remaining employed by another.

The diagram below maps those three parties and how the arrangement works.

A government ICT example

Say a panel supplier employs a cloud engineer and places them with a federal department for a project. The engineer attends the department's stand-ups, uses its systems and follows its technical lead. The supplier still pays their wages and remains their employer.

Labour hire can be casual, fixed-term, project-based, seasonal or specialist. The length doesn't change the core test. Before you assume the host handles pay, leave or performance, confirm who the employer is on the paperwork.

Labour Hire Compared with Contracting and Permanent Jobs

Labour hire, contracting and permanent employment compared

• Feature — Labour hire — Contracting — Permanent employment
• Employer of the worker — Labour hire firm — The contractor's own business or company — The host business
• Typical engagement — Casual, fixed-term, project or seasonal — Defined project or statement of work — Ongoing role
• Paid leave and entitlements — Set by employment type; casual roles have no paid leave — None from the client; contractor manages their own — Full entitlements under award or agreement
• How the worker is paid — Wages from the labour hire firm — Invoice from the contractor's business — Wages from the host

The employer row matters most. It tells you who must pay correctly, who holds leave records and who a worker contacts about employment terms. A job title or location doesn't answer that question.

The typical engagement row explains why similar roles feel different. A defined statement of work points to contracting, while an ongoing role points to permanent employment. Labour hire often fills a project or fixed period inside the host's team. Businesses sometimes frame that need as bringing in external specialists for existing IT teams, but the employment question still comes first.

The hourly rate trap

An hourly rate appears in all three models, so it tells you nothing about which model you're in. A contractor usually invoices through their own business. A labour hire worker receives wages from the firm. A permanent employee receives wages from the host.

Paid leave is where offers diverge sharply. A casual labour hire role can carry no paid leave, while a permanent role carries entitlements under an award or agreement. Don't let the word "contract" in an ad decide it for you.

Before accepting, ask two questions. Who is the employer? What does the employment type say about leave and continuity? Our guide to government contractor jobs helps you compare those routes side by side.

Who Does What in a Labour Hire Placement

Duties in a labour hire placement by party

• Duty — Labour hire firm — Host business
• Employs the worker and pays wages — Yes — No
• Issues payslips, super and leave records — Yes — No
• Manages pay disputes and employment terms — Yes — No
• Directs daily tasks and supervision — No — Yes
• Controls site access and induction — Shared — Yes
• Handles workplace safety at the site — Shared — Yes
• Holds the commercial agreement and fee — Yes — Yes (pays the fee)

Most placement errors come from routing a question to the wrong party. Recruiters send a pay question to the host because the host sees the work. Candidates ask a team leader to approve leave even though the firm holds the leave record. Nobody checks who must issue the payslip until payday arrives.

Practical rule: Take pay and entitlement questions to the employer, and daily task or site questions to the host.

Where duties overlap

Site access, induction and safety can't sit with one party alone. The host controls the workplace, systems and hazards the worker meets each day. The firm still needs to know the worker can enter safely, complete induction and raise concerns. Both sides should agree who confirms clearance, access and escalation contacts before day one.

The commercial agreement also needs two signatures in effect, even if the worker never sees it. The firm supplies the worker under agreed terms, and the host pays the fee. That fee is separate from the worker's wages.

Clear documentation at placement prevents the split from becoming a dispute. Name the employer, the site supervisor and the safety contact in writing. For government roles, our overview of government contract recruitment shows how recruiters manage that documentation across panel placements.

What Labour Hire Means for Workers, Pay and Leave

Labour supply services workers by reference period

• Reference period — Workers in labour supply services — Share of employed people
• June 2023 (Parliamentary Library) — 327,100 — 2.3%
• June 2024 (ABS) — 416,500 — 2.8%
• December 2025 (ABS) — 351,000 — 2.3%

The Australian Bureau of Statistics June 2024 labour hire release reported 416,500 people employed in the Labour supply services industry in June 2024, representing 2.8% of all employed people, and 359,100 of those workers had labour supply services as their main job. Read the counts with care. They include administrative, managerial and support staff who supply labour, so they aren't a count of every person placed at a host site, and the rows come from different releases.

The chart below puts the 2023 and 2024 figures in view.

The worker trade-off

The Australian Bureau of Statistics earnings and working conditions data shows 73.6% of labour hire workers had no paid leave entitlements in August 2024, 68.1% worked full-time and 25.8% preferred to work more hours. Full-time labour hire is common, yet security of pay and leave is often weaker than in permanent work. That tension between flexibility and security is a key worker question.

Consider a hypothetical example. A panel supplier hires a cloud engineer for a 12-month government project, pays them as its employee and manages their leave arrangements. The department directs the sprint work. Rosters and payroll still have to line up across that split, much as they do in other shift-based workforces using restaurant scheduling and payroll software to keep hours, pay and records consistent.

The short video below explains the worker side of these arrangements in plain terms.

Before starting, verify the employing entity, pay rate, leave treatment, notice arrangements, conversion possibilities and who controls day-to-day work. Those checks become a formal checklist later in this guide.

Where Government ICT Labour Hire Fits Among APS Jobs

Government ICT labour hire sits alongside ongoing APS employment, not inside it. The APS Data, Digital and Cyber Workforce Plan 2025-30 recorded 7,556 ongoing staff in the ICT and Digital Solutions job family as at 30 June 2024, up from 6,757 one year earlier, an increase of 799 employees, or approximately 11.8%. It also recorded 5,506 ongoing employees in the Data and Research job family in 2024, compared with 4,813 in 2023.

Demand extends beyond those ongoing roles. The APS Digital Workforce Insights Report 2025 identifies 7,876 current ICT and digital employees, reports 58.3% of this workforce is located in the Australian Capital Territory, and states 87% of advertised vacancies include the ACT as a location. It further estimates a potential digital talent shortfall of more than 8,000 people over the next five years, which is why agencies use several employment routes at once.

Three routes into government ICT work

• Ongoing APS employment: the agency employs you directly.
• Labour hire: a panel supplier employs you and places you with the agency.
• Contracting: you invoice through your own business.

The same title, such as software engineer, DevOps engineer, cybersecurity analyst or data engineer, can sit on any route. The employer named in the paperwork determines your terms, not the project name. Compare live roles across routes through our public sector recruitment coverage and check the employer on each offer before comparing rates.

How BuyICT Labour Hire Works Under DMP2

DMP2 labour hire sourcing models compared

• Model — Who selects the worker — Who employs the worker — Buyer's contract
• Buyer-sourced — Government buyer — Panel seller — Contract with the seller, who supplies the worker
• Seller-sourced — Panel seller proposes, buyer accepts — Government buyer — Buyer-worker contract

The BuyICT Digital Marketplace Panel 2 ICT labour hire page supports ICT labour-hire arrangements for all federal, state, territory and local government agencies, including government universities and government-owned corporations. Under the buyer-sourced model, the government buyer selects the worker and the panel seller employs or engages that person before providing them to the buyer under a contract. Under the seller-sourced model, the seller finds a suitable candidate and, if the buyer accepts the candidate, the buyer employs the person directly under a buyer-worker contract.

That distinction matters because most government ICT labour hire contracts are invitation-only. You can't infer the employer from a public ad alone. We link Australian government ICT procurement opportunities (BuyICT) to live job advertisements published by tender-panel agencies, so recruiters can see which contract is behind which ad. We link every open BuyICT opportunity to the job ad that a tender-panel agency is running.

Role categories readers search for

The BuyICT digital panel certified list identifies DMP2 categories including application, software engineering and development; architecture; cybersecurity; data analytics and business intelligence; digital sourcing, procurement and contract management; program, project and change management; solutions implementation; and support and operations. Those categories map to searches for government software developer, cloud, DevOps, data/AI, technical architect and ICT project management roles.

Read any notice in three steps. Identify the sourcing model, confirm which party employs the worker, and note the role category. Then check the official BuyICT notice for dates and terms, because panel details can change.

How to Test Whether Your Arrangement Is Labour Hire

Don't start with the label in the contract. Test the actual relationship.

• Who recruits the worker: name the party that finds and selects them.
• Who pays them: name the entity responsible for wages or payment.
• Who directs their work: name who sets daily tasks and priorities.
• Who manages performance: name who reviews output and handles issues.
• Accommodation: note whether anyone provides or arranges it.
• Layers: note whether subcontractors or intermediaries sit between parties.

The checklist below sets out those questions in a tick-box format.

Map each answer to a party. If one business supplies a worker to another and remains responsible for paying them, you're likely looking at labour hire even if the paperwork uses a different word.

The Victorian warning

The Victorian Labour Hire Authority general definition of labour hire services describes labour hire as a business supplying workers to another person while being responsible for paying them, and the supplied individuals may be employees or independent contractors. It states that from 1 October 2026 the definition expands to capture some bare intermediaries, accommodation-linked recruitment or placement arrangements, and certain contractor-management models.

Not employing the worker does not necessarily mean you are not providing labour hire.

That's the trap for ICT recruiters using panel or multi-layer subcontracting arrangements. An intermediary may assume only the employing agency needs a licence. Victoria is the only state position confirmed here, so check the licensing rules in every state where the work happens before assuming an arrangement is out of scope.

Confirm Your Arrangement Before You Recruit or Apply

Use four steps before any placement or acceptance.

1. Identify the employer on the paperwork. Look for the entity named on the contract and payslip, not the agency that introduced the role.
2. Confirm the sourcing model. For government ICT work, establish whether it's buyer-sourced or seller-sourced under DMP2 and who selects the worker.
3. Run the relationship test. Work through who recruits, pays, directs and manages performance, then check state rules for each work location.
4. Confirm terms with the worker. Settle the applicable award or enterprise agreement, pay rate, leave treatment, notice arrangements, conversion possibilities and who controls day-to-day work.

Recruiters should record in writing who employs, pays and directs the worker. That record protects the placement and the candidate when questions arise mid-contract. Candidates can use the same steps to tell whether an offer is labour hire, contracting or ongoing employment.

To find current roles and notices, browse government ICT jobs and opportunities, then check the official notice and employer terms because figures here are dated to their sources and may change. For scale, we list 24 open ICT contracts and 26 contracts closed in the last 90 days for Services Australia, Australia-wide, at baseline clearance. Signing up for erecruit is free, so you can check who's behind a role before you apply or submit a candidate.

Test the relationship behind your next government ICT role before you commit, then use erecruit to link open BuyICT opportunities to the live job ads panel agencies are running, with role, clearance, location and timing evidence in one place. Create your free account today and see which contract sits behind each ad before you recruit or apply.