Host Employer Responsibilities: What You're Legally On the Hook For
Using labour hire workers on your site? You have legal obligations — WHS, discrimination, consultation. Here's what host employers in NSW need to know.
Host employers using labour hire workers must provide a safe workplace, proper induction, PPE, and supervision — the same duty of care as for direct employees. Under NSW WHS law, you share responsibility with the labour hire agency for worker health and safety on your site.
A labour hire worker gets injured on your Parramatta site.
You assume the agency handles it. They're the employer — they hold the insurance, they manage the worker.
The SafeWork NSW inspector arrives. ⚡
You are the Person Conducting a Business or Undertaking on this site. You control the workplace. You are responsible for what happens here.
That is the starting position under the Work Health and Safety Act 2011 (NSW). Not a technicality. Not a grey area. Your host employer duties over labour hire workers are real, they are statutory, and you cannot contract them away.
This is what host employers in NSW are legally on the hook for — whether you run a construction site or a warehouse operation — and where the line between your obligations and your supplier's obligations actually sits.
Table of Contents
- What the Law Actually Says
- Your WHS Obligations as a Host Employer
- Discrimination and Adverse Action
- What a Good Agency Handles For You
- Frequently Asked Questions
What the Law Actually Says
The legal framework for host employer responsibilities in NSW comes primarily from two pieces of legislation.
Work Health and Safety Act 2011 (NSW) — Section 19
Under Section 19, a PCBU must ensure, so far as is reasonably practicable, the health and safety of workers. Critically, "workers" includes labour hire workers, contractors, and visitors on the PCBU's premises — not just direct employees.
The host employer is the PCBU who controls the physical workplace. You control access, layout, equipment, induction, supervision, and the conditions in which work is performed. That control creates the obligation.
Multiple PCBUs can have overlapping duties at the same workplace. The labour hire agency also has WHS duties — specifically around pre-placement health and safety information, return to work coordination, and fit-for-duty obligations. But the agency is not on site. You are.
SafeWork NSW takes the position that concurrent duties do not dilute individual duties. Both parties must meet their obligations in full. Check the SafeWork NSW guidance on labour hire host employer obligations for the current regulatory position.
Fair Work Act 2009 — Adverse Action and Accessorial Liability
Under the Fair Work Act 2009, labour hire workers retain full workplace rights even though their employer is the agency, not you.
A labour hire worker who raises a safety concern, makes a complaint about their conditions, or exercises any other workplace right is protected from adverse action — and that protection applies to you as the host employer, not just to their employer agency.
If you direct the agency to remove a worker because they reported a hazard, that could constitute adverse action.
Additionally, the Closing Loopholes Act 2023 introduced Same Job Same Pay provisions. If your site is covered by an enterprise agreement, and labour hire workers perform the same work as your directly employed workers, the agency must pay them at least the EA base rate. You cannot knowingly benefit from non-compliance with SJSP without risk of accessorial liability.
These figures represent a serious-but-not-catastrophic incident. A fatality on site carries criminal prosecution risk and penalties exceeding $3 million for a body corporate under the WHS Act.
Your WHS Obligations as a Host Employer
You control the site. You own the hazards.
This is the simplest way to understand your WHS position as a host employer. The agency employs the worker. You employ the site conditions.
Safe system of work
Every task performed on your site — by your employees or by labour hire workers — must be conducted under a safe system of work. That means risk assessments for high-risk activities, safe work method statements (SWMS) for high-risk construction work, and adequate supervision. 🔧
The agency cannot do this for you. They are not on site. You are.
Site-specific induction
The labour hire agency typically provides a general induction covering broad safety principles. That is not enough.
Your site has specific hazards — the layout, the plant operating in certain areas, the overhead crane swing radius, the edge protection arrangements, the emergency evacuation route. Only you know these. You must communicate them to every labour hire worker arriving on site, every time.
This is not optional. Sections 46–47 of the WHS Act 2011 require PCBUs to consult with workers on WHS matters affecting them — and an arriving worker who doesn't know your site's specific hazards is a worker you have not consulted adequately. ⚠️
Real scenario: A labour hire worker arrives at a Blacktown warehouse. The agency gave him a general safety induction last month. He walks onto the floor and doesn't know about the forklift route that crosses the pedestrian path every 4 minutes. Nobody told him. The agency didn't know — because the agency has never been to your warehouse.
That is your gap. Not theirs.
PPE — provided by you, not just required by you
A host employer cannot simply state that PPE is required on site without ensuring workers can access it. If a labour hire worker arrives without adequate PPE for your specific site conditions, your WHS duty includes addressing that gap — not sending them home or expecting the agency to fix it remotely.
Incident reporting and return to work
If a labour hire worker is injured on your site, the incident must be reported to SafeWork NSW in accordance with the Act. The agency manages the workers compensation claim — but the incident itself occurred under your control. Understanding how labour hire compliance works on both sides is essential for managing this risk.
Your obligation is to:
- Preserve the incident scene where required
- Cooperate with the SafeWork NSW investigation
- Conduct an internal investigation into the cause
- Implement corrective actions for the hazard that caused the injury
- Cooperate with the agency's return-to-work coordinator
Sending a labour hire worker away after an incident and waiting for the agency to follow up is not adequate compliance. 🚫
Discrimination and Adverse Action
The Fair Work Act does not care who signs the payslip.
Labour hire workers have workplace rights under the Fair Work Act 2009. Those rights are enforceable against both the agency and the host employer. You cannot take adverse action against a labour hire worker for exercising those rights — even though they are not your employee.
What counts as adverse action by a host employer?
Adverse action includes directing the agency to remove a worker, refusing to allow a worker to return after they exercised a right, and changing the terms of the engagement to disadvantage a worker. Common examples include:
- Requesting the agency remove a worker who raised a safety concern
- Refusing a worker re-engagement after they made a workplace complaint
- Treating labour hire workers differently to direct employees in performance management
- Excluding labour hire workers from consultation processes that affect their work
Discrimination law applies equally
The Anti-Discrimination Act 1977 (NSW) and federal discrimination legislation apply to the treatment of labour hire workers on your site. You cannot treat a labour hire worker less favourably because of a protected attribute — and the fact that the agency employs them does not create a legal buffer between you and a discrimination claim. 💼
Sham contracting — know the risk
If you or your supplier is characterising labour hire workers as independent contractors when the work arrangement is genuinely one of employment, that is sham contracting — a serious breach of the Fair Work Act carrying penalties of up to $94,000 per contravention for a body corporate.
The indicators are: the host directs the worker's hours and methods, the work is performed at the host's site, the worker has no genuine ability to sub-contract or delegate, and the worker is economically dependent on a single engagement. A labour hire arrangement where workers are called "ABN contractors" to avoid obligations is not a grey area. ⚡
The legal exposure is real on both sides. WHS Act obligations are primary — the host controls the site, the host must manage site hazards. Fair Work Act obligations are secondary but significant — adverse action protections, discrimination law, and sham contracting risks apply to your conduct as host regardless of the employment relationship. The agency cannot make you compliant. Only your own conduct can.
What a Good Agency Handles For You
The split is roughly 45/35/20. Neither party can fully outsource their obligations to the other. A contract clause saying the agency accepts all WHS liability does not change the legal position.
A genuinely capable labour hire agency carries a significant compliance load on your behalf.
Workers compensation, payroll tax, Award compliance, super, pre-employment credential verification — these are not your problems. They are the agency's obligations as the employer of record.
What the agency cannot do is be present on your site. They cannot run your inductions, manage your plant and equipment, assess your site-specific hazards, or report your incidents to SafeWork NSW. That part is always yours.
The line is reasonably clear: you own the workplace, they own the employment. The obligations that flow from controlling a physical site rest with you. The obligations that flow from employing workers rest with them. ✅
What to confirm with your supplier upfront
A compliant agency will be able to confirm — before a worker sets foot on your site — that their workers compensation policy correctly classifies construction workers, that credential verification has been completed (White Card, RIW card, relevant licences), that the Award or enterprise agreement rate applicable to your site has been calculated, and that SJSP compliance has been assessed if your site has an EA.
If you have a site-specific enterprise agreement and your agency has not asked you for a copy of it, that is a red flag. They need it to calculate SJSP rates correctly.
See our compliant labour hire guide for a full checklist of what to verify from your supplier — and what labour hire actually costs when compliance is done correctly.
Check the Fair Work Commission SJSP resources for current Same Job Same Pay orders in your industry.
The division of responsibility is not negotiable. A contract clause saying the agency accepts all WHS liability does not change the legal position. SafeWork NSW assesses the actual circumstances — who controlled the site, who directed the work, whose decisions created the hazard. If that is you, the WHS duty is yours. Start there.
- ✕Skips site-specific induction — 'the agency did one'
- ✕Doesn't check credentials on arrival — 'the agency verified them'
- ✕Removes a worker who raised a safety concern — 'not our employee'
- ✕Sends an injured worker home — 'the agency handles workers comp'
- ✕Discovers expired White Card during a SafeWork audit
- ✓Full site induction for every labour hire worker on day one
- ✓Spot-checks credentials match the role and machine on site
- ✓Treats safety concerns the same regardless of employment structure
- ✓Preserves incident scene, cooperates with investigation immediately
- ✓Confirms credential status with agency before worker starts
Frequently Asked Questions
Am I responsible for WHS if a labour hire worker is injured on my site?+
Yes. Under the Work Health and Safety Act 2011 (NSW), you are a PCBU with primary duty of care over site conditions. The agency also holds WHS duties — but concurrent duties do not reduce yours. You control the physical workplace; you are responsible for its hazards.
Does Same Job Same Pay apply at my site?+
If your site has an enterprise agreement and labour hire workers perform the same work as your directly employed EA workers, yes. The obligation to pay SJSP rates falls on the agency — but you should confirm compliance with your supplier. Knowingly benefiting from underpayment can create accessorial liability under the Fair Work Act 2009.
Can I direct a labour hire worker to do tasks outside what was agreed?+
Careful. You can direct day-to-day work — that is the nature of a host employer arrangement. But directing a labour hire worker into a task outside their classification, without the appropriate licence or credential, or into a higher-risk role without a revised placement agreement, creates both WHS and Award compliance exposure. Confirm with the agency before expanding scope.
What if I want a specific labour hire worker removed from my site?+
You can request the agency not continue placing a particular worker at your site. What you cannot do is request removal because the worker exercised a workplace right — raised a safety concern, made a complaint, or sought to exercise an entitlement. That constitutes adverse action under the Fair Work Act 2009 and creates serious legal exposure regardless of the employment structure.
Work With an Agency That Understands Where the Lines Are
Compliance is not the most exciting part of using labour hire. We know that. You want workers on site — not a lecture about concurrent PCBU duties.
But we have seen what happens when host employers assume the agency handles everything. We have seen the SafeWork inspector arrive and the site manager realise — mid-sentence — that the duty was always theirs.
We would rather have this conversation now than after an incident.
The compliance conversation in labour hire typically focuses on the agency's obligations. Host employer responsibilities are discussed less — and misunderstood more.
If you are managing sites in Greater Sydney and you want to work with a labour hire supplier who will tell you upfront what they cover, what you cover, and how the two connect — get in touch with Leap Labour. 🤝
We will give you a straight answer on SJSP compliance, credential verification, insurance classifications, and what we need from you to run a clean engagement.
The law is not going to get simpler. Working with a supplier who explains it clearly is the starting point.