Most businesses fear Victoria’s WFH laws will negatively impact operations

New findings paint a “particularly alarming” picture of the impact upon businesses across Victoria should the Allan government’s proposed work-from-home legislation pass the state’s Parliament, including the additional costs that most business owners expect to incur.

Research from the Victorian Chamber of Commerce and Industry shows that while 77 per cent of businesses already allow employees to work from home, an overwhelming 80 per cent expect the proposed legislation to negatively impact their operations.

The findings are a warning to the state’s Labor government, which confirmed in mid-June that it would move to enshrine the right to work from home for employees across Victoria. Such a move, the business advocacy group’s research suggests, will increase costs, damage hiring and push jobs and investment interstate.

It also found that 72 per cent of businesses said Victoria was harder to operate in than other states (up from 56 per cent in October 2025), and that 47 per cent of businesses would look to expand operations and hire staff outside Victoria if WFH legislation was introduced (up from one in three).

The research further identified that 92 per cent anticipate additional costs from the legislation, including legal advice, policy development, technology, equipment, insurance, cyber security and compliance, and that of the businesses estimating additional annual costs, 25 per cent expect costs of $50,000 or more. Moreover, 47 per cent say the laws would reduce their willingness to employ younger or less experienced workers who may require greater training, supervision or mentoring, and 72 per cent expect they will be required to provide additional work-from-home arrangements under the proposed laws.

As previously reported by HR Leader, stakeholders have argued that the proposed laws may accelerate the offshoring of Australian jobs, will be an enormous strain on the Victorian Civil and Administrative Tribunal by significantly increasing employment disputes, and create compliance, cost, and consistency challenges for employers.

Victorian Chamber of Commerce and Industry chief executive Sally Curtain said that the findings should be a wake-up call for the Allan government.

“Businesses are not rejecting flexibility – 77 per cent already allow their employees to work from home. They are rejecting legislation that adds cost, complexity and uncertainty without solving a genuine problem,” she said.

“Last year, we warned these laws risked driving jobs and investment out of Victoria. The latest data shows those warnings are becoming more serious, not less.

“Almost half of businesses surveyed are now more likely to invest outside Victoria, 42 per cent are more likely to hire outside the state and 44 per cent are less likely to hire Victorians. Those are consequences no government should dismiss.

“The impact on young Victorians should be particularly alarming. Almost half of businesses say the proposed laws would reduce their willingness to employ younger or less experienced workers who need training, supervision and mentoring.”

The devil is in the detail – and unfortunately, that is where this bill falls apart, Curtain continued.

“Instead of providing certainty, it creates legal grey areas and asks businesses to comply with obligations that are not clearly defined,” she said.

“If everyone is left arguing over what ‘reasonable’ means, the legislation has not done its job. The winners will not be employees or employers – they will be employment lawyers.

“We are asking for sensible amendments that recognise different industries, protect small businesses, clarify employer obligations and reduce unnecessary disputes.

“Victoria does not need another workplace experiment. We need practical laws that support both jobs and flexibility.”

Elsewhere, the Victorian Congress of Employer Associations (VCEA) has put forward a 10-point plan to overhaul the proposed laws, submitting that the legislation in its current form risks creating a costly, complex, and unworkable regime for employers.

The proposed amendments include a hard two-day cap on the legislated WFH right, delayed commencement for businesses with fewer than 200 employees, stronger powers to manage productivity and safety, clearer rules around employer costs, and the ability to review, pause or revoke work-from-home arrangements when circumstances change.

The VCEA is also calling for the legislation to phase commencement for businesses with fewer than 200 employees, broaden the grounds on which businesses may refuse a WFH arrangement, including where it would affect productivity, efficiency, or the operational needs of the business, and strengthen employers’ ability to manage occupational health and safety obligations for employees working from home.

The proposed commencement timetable is also “dangerously compressed”, the group argued, with the legislation potentially receiving royal assent only weeks or days before obligations are due to begin on 1 September.

This, it said, 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.

The VCEA urged the state government to delay commencement until 1 March 2027 or at least phase in the requirements for smaller employers, to allow businesses, employees and the commission time to properly prepare.

The employer group argued that Victoria is “already facing serious economic challenges”, with business conditions and confidence continuing to lag other states, and that “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 government has an opportunity to fix the bill before it takes effect, it said, and ensure the final legislation supports flexibility without undermining productivity, safety, investment and jobs.

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Jerome Doraisamy

Jerome Doraisamy is the managing editor of Momentum Media’s professional services suite, encompassing Lawyers Weekly, HR Leader, Accountants Daily, and Accounting Times. He has worked as a journalist and podcast host at Momentum Media since February 2018. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of the Minds Count Foundation.