Victorian Governments Proposed WFH Legislation

The Victorian Government is proposing groundbreaking legislation to legally entrench a right for employees to work from home (WFH) “at least two days per week”, where their role can reasonably be performed remotely, aiming to boost workforce participation and work–life balance.

Crucially for small businesses, no exemption by size will be made. Subsequently, all employers, including those with fewer than 50 staff or under $10 million turnover, will be bound once the law passes. The policy, expected to be introduced later this year and debated in Parliament, has provoked strong small business and business lobbyist concern about added regulatory burden, compliance complexity and operational feasibility.

Key Points of the Legislation

The Government’s design statements indicate the reform will cover public and private sector workers in Victoria, creating a legally protected ability for employees to WFH two days per week for roles that can be performed remotely.

A key policy decision is that business size will not determine coverage, the right will apply “no matter the size of your workplace,” capturing an estimated 1.3 million Victorians employed by small businesses.

The Government frames the changes as supporting household budgets and workforce participation, particularly for parents, and as consistent with hybrid work practices already embedded in many workplaces. It also says the current position reflects consultation led by the government on which cohorts should be covered and whether any business size threshold should apply.

Key Takeaways and Implications

For small businesses, “regulatory burden” is less about a two‑day entitlement and more about the processes required to implement it. Scott Veenker, Acting CEO of the Victorian Chamber of Commerce and Industry, argues the reform is an “additional impost,” noting many small businesses lack HR teams to interpret and apply new legal rights.

HR capability matters because HR typically converts legislation into policy, eligibility tests and defensible decisions, including defining “reasonableness” and managing disputes. Without this infrastructure, these tasks fall to owners and managers, increasing time costs, inconsistency risks and exposure to challenges.

A uniform entitlement also clashes with operational diversity. The Council of Small Business Organisations Australia notes many small businesses cannot support remote work due to customer service, on‑site operational or security needs. Even with a “reasonable to work from home” test, employers may still face extra administrative work assessing roles and documenting refusals.

Legal uncertainty adds further complexity. State union groups have raised possible constitutional issues given Victoria has referred most private-sector IR powers to the Commonwealth. If implemented through anti‑discrimination‑style amendments, businesses will also need to navigate how the new state entitlement interacts with the federal flexible work framework, potentially increasing rather than reducing complexity.

For employees who can “reasonably work from home,” hybrid arrangements would shift from a discretionary benefit to a protected right, significant for parents and carers balancing commuting and childcare. One area of contention is the proposed probation exemption. If retained, employees may need to attend onsite during probation and renegotiate hybrid patterns afterwards.

Premier Jacinta Allan frames the policy as boosting workforce participation, especially for parents, and supporting gender pay equity. She also cites CEDA data suggesting employees working five days a week from home is 20% more productive. Industrial Relations Minister Jaclyn Symes highlights cost‑of‑living benefits, arguing WFH reduces commuting costs without harming productivity.

Business groups, however, call the proposal an “overreach” that undermines organisational autonomy and increases compliance, particularly for small businesses. Some warn it may reinforce an “anywhere but Melbourne” hiring approach if Victoria is seen as a high‑compliance state.

In practice, employers should expect a more formalised WFH decision process, with greater emphasis on documenting role requirements, reasonableness assessments and potentially more disputes where expectations differ.

If you have questions about how these changes may affect you as an employee or franchisee, please contact Nick Stevens, Paul Chapman, Evelyn Rivera or Ayla Hutchison.