Do You Get Paid the Same Through a Labour Hire Agency as a Direct Employer?

You are generally entitled to the same minimum pay and conditions through labour hire as you would be as a direct employee doing the same work, since labour hire workers are still covered by the relevant award or agreement that applies to the role. We are First Grade Group, and we place workers into labour hire roles regularly, so questions about pay and entitlements come up often, particularly from people using an agency for the first time.

If you are considering labour hire work and unsure whether you will be paid fairly compared to a direct hire, understanding how the arrangement actually works should put most of that uncertainty to rest.

How Does Pay Work When You Are Employed Through Labour Hire?

When you work through labour hire, you are technically employed by the labour hire agency rather than the business you are working at day to day, and the agency is responsible for paying your wages, meeting award obligations and handling your tax and superannuation. The Fair Work Ombudsman's information on labour hire and supply chains explains this arrangement clearly, including where responsibility sits between the agency and the host business.

This means your actual pay rate should reflect the award or agreement that applies to the type of work you are doing, in the same way it would if you were employed directly by the host business for that role.

The agency's fee for placing you is a separate commercial arrangement between the agency and the host business, and it does not come out of your pay. Your wage is calculated the same way it would be for any employee doing that work under the relevant award.

Do You Get the Same Entitlements as a Direct Employee?

Yes, labour hire workers are entitled to the same minimum protections under the National Employment Standards as any other employee, including minimum pay rates, penalty rates where applicable, and safe working conditions. What can differ is whether you are engaged as a casual, which affects things like paid leave entitlements, but this is determined by the nature of your engagement rather than the fact that you came through an agency.

It is worth asking upfront whether a role is casual, ongoing, or a fixed term placement, since this affects your entitlements more than whether you are labour hire or a direct employee. A good agency should be able to explain exactly what type of engagement you are being offered before you accept it.

What About Superannuation Through a Labour Hire Arrangement?

Superannuation still applies through labour hire in the same way it does for any other employee, and it does not matter whether you are full time, part time or casual. According to the Australian Taxation Office, generally all employees are eligible for super guarantee contributions regardless of employment type, with limited exceptions such as workers under eighteen doing fewer than thirty hours a week.

As your employer for the duration of the placement, the labour hire agency is responsible for paying your super guarantee contributions into your nominated fund, the same as a direct employer would be.

Why Might Pay Rates Vary Between Labour Hire and Direct Roles?

Pay rates can appear to vary because the agency's fee is paid by the host business on top of your wage, not deducted from it, so a difference in headline pay usually comes down to the specific award classification or shift arrangement rather than the fact that an agency is involved. If a pay rate seems unusually low for the work involved, it is worth asking the agency directly which award and classification applies, since a reputable agency should be able to explain this clearly.

Genuine differences in pay are more often explained by casual loading, shift penalties or site specific allowances than by any structural disadvantage in being paid through an agency rather than directly. If you are ever unsure, comparing the award classification stated for your role against the relevant modern award is a straightforward way to check you are being paid correctly.

How First Grade Group Approaches Pay and Entitlements

We are upfront about pay rates, award classifications and entitlements before you accept a placement, because a candidate who understands exactly what they are being paid and why is far more likely to stay in a role long term. If something does not add up, we would rather explain it clearly than have you find out after you have started.

If you are considering a labour hire role and want to understand exactly what you would be paid, browse our current opportunities or upload your resume and we will talk you through the details before you commit to anything.