Temp Agency: How Temporary Staffing Works
A temp agency employs workers and places them with host businesses for short or flexible assignments, and the agency pays the wages, super and leave while the host directs the daily work. Employers use one to cover absences, busy periods and trial hires. This guide explains how it works, who is responsible for what and how to choose well, and it builds on our guide to how recruitment agencies work.
- A temp agency is the employer of the worker it places, so it pays wages, super and entitlements, while the host employer supervises the work.
- Casual temps on the national minimum wage get at least $33.05 per hour from the first full pay period on or after 1 July 2026, including the 25% casual loading.
- NSW has no labour hire licensing scheme, but Victoria, Queensland, South Australia and the ACT do, so check where the work is located.
- Host and agency share work health and safety duties, so ask for inductions, tickets and incident reporting to be agreed in writing.
What is a temp agency?
A temp agency, also called a labour hire or temporary staffing agency, supplies workers on demand instead of the host hiring them directly.
| Term | Meaning | Why it matters |
|---|---|---|
| Temp agency | A business that employs workers and places them with host businesses for assignments. | The agency, not the host, is the employer for pay, super and leave. |
| Host employer | The business that uses the worker and directs the daily tasks. | The host shares work health and safety duties with the agency. |
| Assignment | A placement for a set period or task, such as covering leave or a seasonal peak. | It can end quickly, so check notice terms in the agreement. |
| Temp-to-perm | A temporary placement that may lead to a permanent job with the host. | Conversion terms should be agreed up front, not argued about later. |
| Labour hire agreement | The contract between the agency and the host setting scope, charges and responsibilities. | It records who does the inductions, pays the worker and handles incidents. |
How a temp agency works for employers and workers
The same process serves both sides, but each has different duties along the way.
| Stage | What the host does | What the worker gets |
|---|---|---|
| Brief | Sends the role, location, hours, tickets needed and any site rules. | A clear description of the job before accepting it. |
| Match | Reviews the shortlist and confirms the worker meets the inherent requirements of the job. | A fair, non-discriminatory selection process. |
| Induct | Provides a site induction and checks any licence or white card the work requires. | Training and safety information before the first shift. |
| Work | Directs tasks and signs timesheets each week. | Wages, super and a payslip from the agency. |
| Review | Gives feedback and decides whether to extend or end the assignment. | A chance to extend, convert or move to a new placement. |
Temp agency vs direct hire and outsourced recruitment
The right option depends on how long you need the person and how much control you want over employment terms.
| Option | Employer of the worker | Best used when |
|---|---|---|
| Temp agency | The agency | You need cover quickly, or demand is uncertain or seasonal. |
| Direct casual hire | You | You can manage payroll, super and records yourself and want a regular casual team. |
| Permanent hire | You | The role is ongoing and you can commit to it. See outsourced recruitment RPO. |
| Healthcare placement | The agency | Rosters need qualified staff with extra checks. See healthcare and aged care staffing. |
Temp agency pay, loading and fees
A temp agency charges the host a rate that covers wages, super, insurance and its own margin, so the worker's pay is lower than the charge-out rate.
- Ask for the charge-out rate in writing for each classification, and expect it to sit well above the worker's wage (indicative — get quotes).
- Check that casual temps receive the 25% casual loading under their award, and at least $33.05 per hour where no award applies.
- Confirm that the agency pays super with wages, as payday super requires from 1 July 2026, within 7 business days of payday.
- Ask what the agency charges if you hire the worker directly, since conversion fees differ widely. See recruitment agency fees.
- Agree who approves timesheets, because host supervisors usually sign them and the agency pays from them.
Housekeeping labour hire through a temp agency
Hotels, serviced apartments and commercial cleaners lean on housekeeping labour hire in peak weeks and after big events.
- Check which award covers the work, then find the classification and rate in the Fair Work Ombudsman pay guide rather than assuming one.
- Ask how the agency handles weekend and public holiday work, since penalty rates come from the award and not from the national minimum.
- Confirm manual handling and chemical training is done before the first shift, and that label instructions are followed for every product.
- Set a clear checklist for rooms and common areas, and have the host supervisor sign off completed work each day.
- Plan for short-notice cancellations, because casual temps can be offered other assignments if a booking falls over.
Temp agency licensing in NSW and other states
Licensing depends on where the work happens, not where the agency is based. Read labour hire licence Australia and what is labour hire for background.
| State or territory | Labour hire licensing |
|---|---|
| NSW | No labour hire licensing scheme (NSW Government, May 2026). NSW is working with other jurisdictions on a nationally consistent approach. |
| Victoria | Licence required. Expanded fit and proper person and financial viability rules started 1 June 2026. |
| Queensland | Licence required. |
| South Australia | Licence required. Newly covered providers had to hold a licence by 29 July 2026. |
| ACT | Licence required. |
Who is responsible for safety on a placement
Agency and host are both PCBUs under the Work Health and Safety Act 2011 (NSW) and must manage risks so far as reasonably practicable.
- Run a site induction on the first shift, including emergency procedures, hazards and who to report to.
- Check licences and tickets for high-risk work, and check a white card before anyone enters a construction zone. See construction labour hire.
- Agree who supplies PPE and who reports incidents to SafeWork NSW, and put it in the agreement.
- Remember workers compensation insurance with icare is compulsory for employers above the wage threshold, and the agency usually holds it for placed workers.
How to choose a temp agency
- Confirm the agency employs the workers it places and ask who pays super and holds workers compensation insurance.
- Check that it holds a licence in each state where licensing applies, such as Victoria or Queensland.
- Ask for references from host businesses in your industry, and for its screening process, including right-to-work checks.
- Compare charge-out rates for the same classification, and check what is included (indicative — get quotes).
- Read the agreement for notice, conversion, incident and insurance terms before signing.
- Start with a short assignment, review it with the worker and the agency, then scale up.
Common temp agency mistakes to avoid
- Treating placed workers as your own employees for pay decisions, when the agency is the employer.
- Skipping the site induction because the worker is only there for a few days.
- Assuming NSW rules apply to work in Victoria, Queensland, South Australia or the ACT.
- Leaving timesheets unsigned, which delays the worker's pay and the agency's invoice.
- Agreeing to a charge-out rate without checking the award and loading behind it.
Temp agency FAQ
What does a temp agency do?
It employs workers and places them with host businesses for short or flexible assignments. The agency recruits, screens and pays the worker, including super, while the host supervises the daily tasks and signs timesheets.
Who pays the worker at a temp agency?
The agency pays the worker, because it is the employer. It must pay at least the award or agreement rate and issue a payslip within 1 working day of payday. The host pays the agency a charge-out rate.
Do you need a licence to run a temp agency in NSW?
NSW has no labour hire licensing scheme. Victoria, Queensland, South Australia and the ACT do, so an agency placing workers in those places needs a licence there. Check each state's regulator before engaging an agency for work outside NSW.
Can a temp worker become permanent?
Often yes, through temp-to-perm arrangements, but the terms sit in the agreement. A casual worker may also ask to convert after 6 months of employment, or 12 months with a small business employer, so ask the agency how conversion works before the assignment starts.
Next step: choose the right temp agency
Write down the role, the award and the dates, then compare agencies on licensing, safety processes and clarity of charges. At TQN Personnel, we supply screened, inducted workers across Sydney and can help you plan your next placement. This is general information, not legal, tax or financial advice, so check the Fair Work Ombudsman, the ATO or an employment lawyer for your situation.