• Legislation & regulations

Businesses that engage or supply security workers should be aware of recent amendments to the Private Security Act 2004 (Vic) that come into effect in June to ensure they continue to meet their legal obligations. Providers who fail to comply with new obligations may have their licence cancelled.

The amendments stem from recommendations made in the 2021 Review of the Private Security Industry. The Labour Hire Authority (LHA) has worked closely with other regulators and stakeholders to ensure the changes that relate to labour hire in the security industry make it fairer, safer and more transparent.

The amendments come into effect on 18 June 2025 and include changes designed to tackle sham contracting and increase transparency across complex supply chains within the security industry.

Upcoming changes affecting labour hire in the security industry

The amendments to the Private Security Act were designed to enhance the private security licensing scheme by:

• streamlining the licensing system, including by removing registration requirements
• simplifying the application process, and imposing a new refresher training requirement
• broadening the category of persons who can raise concerns about licensees with Victoria Police
• imposing additional requirements in relation to subcontracting
• providing for the development of a code of conduct, enforceable by disciplinary action
• imposing new requirements in relation to risk management plans.

Full details of the changes can be viewed on the Victorian legislation website.

Some of these changes are of particular significance to businesses that supply or use labour hire, and tie in directly with LHA’s objectives of protecting labour hire workers from exploitation and improving transparency and integrity within the industry.

Providers who fail to comply with their obligations under the Private Security Act may have their licence cancelled.

New business licence requirement for independent contractors working in the security industry

The amendments to the Private Security Act include a new requirement that workers engaged as independent contractors hold a private security business licence, in addition to a private security individual operator licence.

The primary purpose of this change is to deter intentional misclassification of workers. An individual who wishes to operate a genuine business as an independent contractor may still do so, with the required business licence.

Conversely, misclassified employees will be unable to lawfully perform security work without a business licence, and security businesses identified as engaging in non-compliance may be subject to compliance action by Victoria Police’s Licensing and Regulation Division (LRD) and have their licence cancelled by LHA.

Importantly, this behaviour may also contravene the Fair Work Act 2009 (Cth) and additional penalties may also apply.

It’s crucial for labour hire workers to be classified correctly as employees or independent contractors.

For more information visit Employee or independent contractor? Know the rules and classify workers correctly.

New subcontracting requirements and offences

The security industry can involve complex supply chains – where a client or host business engages a principal contractor to supply security workers, and the principal contractor sources workers from subcontractors to on-supply to the client/host.

While subcontracting can be a legitimate business model, there is an inherent increased risk of non-compliance within complex supply chains. Additionally, some businesses misuse subcontracting to engage in non-compliance.

The amendments include several changes:

• Providers, at both the principal contractor and subcontractor level, will be required to gain written consent from the host/client at least one day before subcontracting (or within three days after commencement for subcontracting on ‘short notice’).
• At the time of seeking written consent from the host/client, the provider must give the client/host a written notice that includes the names and licence numbers of each proposed subcontractor.
• ‘Subcontractors’ now includes both businesses that are providers under the Labour Hire Licensing Act 2018 (Vic), and workers engaged as independent contractors.

Non-compliance with these new requirements carries maximum penalties of over $47,000 for a company and $23,000 for an individual. It may also lead to cancellation of a labour hire provider’s licence.

These amendments will create much-needed visibility across complex supply chains to ensure hosts/clients have greater understanding of any risk of non-compliance in their business and will make it easier for regulators like LRD and LHA to regulate compliance across complex supply chains.

Additional important changes

The amendments also introduce new requirements around risk management plans, in a form approved by the Chief Commissioner of Victoria Police.

A mandatory code of conduct is also in development by the Chief Commissioner, as part of the amendments.

Exposure draft of new Private Security Regulations now available for consultation

The Victorian Government is re-making the Private Security Regulations to support the implementation of the amended Private Security Act.

The draft Private Security Regulations and Regulatory Impact Statement were made available for comment on 26 March 2025.

To read the documents and to provide feedback, visit Remaking the Victorian Private Security Regulations. The feedback period ends on Thursday, 1 May 2025 at 11:00pm.

LHA’s role in maintaining a fairer security industry

The security industry remains a key area of focus for LHA, to protect workers and continue to improve the transparency and integrity of the industry.

LHA continues to work with:

• hosts and principal contractors to ensure they maintain responsibility and transparency throughout their supply chains, through education and/or licence conditions
• providers, by offering guidance about complying with their legal obligations and imposing conditions where appropriate to monitor compliance.

LHA also works closely with stakeholders and other regulators within the security industry, including meeting with the Victorian Security Industry Advisory Council (VSIAC) every quarter to engage and consult on labour hire related matters.

Upcoming security industry forum

A security forum will be hosted by LHA later this year, with guest speakers from LRD. The forum will include content outlining the changes to the Private Security Act and how LHA and LRD work together to improve compliance across the security industry.

Registration information for this event will be provided in a future edition of LHA News.

More information

LHA’s Guidance for the security industry: cost of meeting your legal obligations has been updated for the 2024-25 financial year and is used as the benchmark for assessing contract pricing in the industry, informing compliance activities.