Last ditch call to delay Victoria’s controversial WFH law as deadline looms

Victoria’s peak employer lobbyist is calling for the state government to urgently delay and overhaul its upcoming work-from-home law before it passes parliament within weeks.

Under the law, Victorians who can work from home will have the legal right to do so two days per week – a change some businesses have claimed will cost them dearly and accelerate offshore hiring.

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The Victorian Congress of Employer Associations (VCEA) on Monday said the proposed legislation was “flawed” and needed 10 major changes or risk a “costly, complex and unworkable” situation after September 1.

Proposed amendments to the Equal Opportunity Amendment (Work from Home) Bill include adding a hard two-day cap on working from home, delaying the bill until March, broadening the grounds for refusal and allowing employers to review, pause or revoke arrangements if performance issues arise.

It also asked the government to “clarify and tighten” the definition of reasonable employer costs.

The law in its current form will require employers to pay for any reasonable costs to allow a staff member to work remotely.

The VCEA opposed enshrining the right to work from home altogether but said the changes in the 10-point plan will at least give some power back to the employer.

“The proposed commencement timetable is also dangerously compressed, with the legislation potentially receiving Royal Assent only weeks or days before obligations are due to begin on 1 September 2026,” the VCEA said in a statement.

“This would leave employers scrambling to rewrite policies, establish new processes, assess safety obligations, understand cost liabilities, train managers and respond to employee notices under an entirely new legal regime.”

It also called on the government to phase in requirements for employers with fewer than 200 staff to allow companies to “properly prepare”.

The proposed bill currently only gives businesses with fewer than 15 staff until July 1, 2027 to comply.

“At a time when Victoria needs to restore confidence and competitiveness, business groups warn the government must avoid adding unnecessary complexity, cost and uncertainty to employers already doing the right thing,” the VCEA added.

The VCEA has written to Premier Jacinta Allan to urge the state government to implement their 10-point plan and delay the commencement date.

Signatories include Master Builders Australia, the Property Council of Australia, the Victorian Transport Association and the Business Council of Australia.

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Fresh data claims WFH law will be costly

Imminent WFH laws will come at an annual cost of up to $50,000 for a quarter of all Victorian businesses, according to data released by the Victorian Chamber of Commerce and Industry.

The figures paint a bleak picture for employers, with 80 per cent expecting the proposed legislation to “negatively impact their operations”.

Another 92 per cent said they anticipated additional costs from the legislation, including legal advice, policy development, technology, equipment, insurance, increased cybersecurity and compliance.

Data released from global payroll and employment infrastructure company Remote previously found that 43 per cent of businesses will increase offshore hiring if the new policies are mandated as minimum requirements.

This sentiment was echoed in the Victorian Chamber of Commerce and Industry, with 44 per cent of those surveyed saying the new right would make them less likely to hire new staff based in Victoria.

The productivity benefit of remote work

Allan has spruiked her WFH legislation by claiming it will save the average Victorian $5000 per year.

She has described it as a “game changer”, particularly for caregivers.

Australia’s Productivity Commission found that, post COVID-19, the ability to work remotely has increased job participation for women with young children by 9 percentage points and 4.4 percentage points for those with a disability or health condition.

Research from Stanford University has also suggested that WFH increased retention in businesses by up to a third.

Similar research by the Australian Institute of Company Directors found 45 per cent of employers reported positive impacts when their staff had a hybrid arrangement.

The 10-point plan proposed by the VCEA

1. New right must be capped at a maximum of two working days per week, or the pro-rata equivalent, and must not stack on top of existing awards, enterprise agreements or workplace arrangements to create an entitlement to work remotely for the majority of the week.
2. Amend the commencement date to 1 March 2027, or at a minimum phase the commencement period for businesses with fewer than 200 employees to smooth the transition and ensure that businesses have appropriate systems in place.
3. Broaden the grounds on which businesses may refuse a work-from-home arrangement, including where it would affect productivity, efficiency or the operational needs of the business;
4. Strengthen employers’ ability to manage occupational health and safety obligations for employees working from home;
5. Allow employers to review, pause or revoke arrangements where performance issues arise, business circumstances change, seasonal or peak periods require attendance, or workers are needed in person for training, professional development or team activities;
6. Clarify and tighten the definition of reasonable employer costs;
7. Give the Victorian Equal Opportunity and Human Rights Commission powers to quickly dismiss frivolous, vexatious or unmeritorious complaints;
8. Establish a legally reliable checklist or code for small business employers responding to work-from-home notices;
9. Limit the right to employees whose primary place of employment is in Victoria, with work-from-home locations limited to agreed premises in Victoria unless otherwise agreed;
10. Provide clarity on how the pro-rata entitlement will operate in practice