Victoria's WFH Law: Who Pays for the Home Office — and Can the State Even Do This?

Victoria has legislated a statutory right to work from home — the first of its kind in Australia — and it starts on 1 September 2026. The vehicle is the Equal Opportunity Amendment (Work from Home) Bill 2026, introduced on 16 June 2026.

The core entitlement: eligible employees can work from home up to two days a week where they can reasonably perform their role from home. Full-time employees are covered, along with regular casual and part-time employees, with part-timers receiving a pro-rata entitlement set by regulation. An employee gives written notice of their intention to exercise the right, and the employer has 21 days to respond. Disputes go to the Victorian Equal Opportunity and Human Rights Commission.

Small business gets breathing room: workplaces with fewer than 15 employees aren't covered until 1 July 2027.

The political context matters for anyone guessing at what happens next. Ben Carroll replaced Jacinta Allan as Premier in late July 2026 after a Labor caucus vote, with a state election due in November. A policy introduced under one leader, commencing weeks before an election under another, is not a settled policy.

The employer does. As drafted, employers are liable for the reasonable costs necessary to enable an eligible employee to work from home. That is the provision most employers have not yet priced, and it is the one that will generate the first wave of disputes.

The obvious question is where "reasonable" lands. A laptop the business already supplies is uncontroversial. A compliant chair and desk, a monitor, a share of internet and electricity, and the periodic replacement of all of it are not obviously excluded. Nobody knows yet, because the phrase will be given meaning by the Commission and, eventually, by the courts — not by the Bill.

Two points employers routinely miss. First, this sits on top of existing work health and safety duties: a PCBU's duty under the OHS Act 2004 (Vic) already extends to workers at home, so the home workstation is already your problem in a safety sense. Second, an employer facing 40 eligible staff is not making one purchasing decision — they are making forty, annually, with a dispute pathway attached to each.

If you want the safety half of this quantified now, our WFH WHS obligations checker maps the duties that already apply.

This is the question that decides whether any of the above matters — and it is genuinely unresolved.

Victoria referred its industrial relations powers to the Commonwealth. Section 26 of the Fair Work Act 2009 (Cth) provides that the Act applies to the exclusion of state and territory industrial laws, and section 109 of the Constitution provides that where a state law is inconsistent with a Commonwealth law, the Commonwealth law prevails to the extent of the inconsistency. On its face, a state creating a new workplace entitlement with its own enforcement regime runs directly at both.

Victoria's drafting shows it knows this. Two design choices look like deliberate attempts to survive the challenge:

1. It isn't industrial law — on paper. The right sits in the Equal Opportunity Act 2010 rather than industrial relations legislation, and is enforced through the equal-opportunity system. The argument is that this is anti-discrimination law, a field the states retain, rather than an industrial law caught by s26.

2. It steps around s65. The Bill excludes employees who are entitled to request flexible working arrangements under s65 of the Fair Work Act for the same circumstances — preserving the federal scheme's operation rather than duplicating it.

Whether that is enough is exactly what practitioners are declining to guarantee. The published analyses from major employment firms since June land in the same place: the overlap with the federal framework is substantial, and it would be surprising if the legislation did not attract close scrutiny and a possible constitutional challenge. Calling a workplace entitlement an equal-opportunity right does not automatically make it one — courts look at substance, not the statute it's filed under.

What this means practically: employers should prepare to comply, not gamble on a challenge succeeding. The law commences 1 September whether or not someone eventually tests it, and "we thought it was invalid" is not a defence to a complaint filed in the meantime.

The deferral to 1 July 2027 for workplaces under 15 employees is a real concession, and it is worth understanding precisely what it does: it delays the problem for the smallest businesses and lands it squarely on the ones just above the threshold — the 15-to-50-employee businesses that have neither a deferral nor an HR function.

For that band, three costs arrive together. A direct equipment and running cost per eligible employee, of unknown size until "reasonable" is defined. An administrative cost: a 21-day response clock on every notice, with a documented, defensible reason if you decline. And a dispute-exposure cost, because a new statutory right with a new forum reliably produces claims in its first two years while the boundaries get drawn.

There is a legitimate counter-argument and it deserves stating: WFH already happens at scale, most employers already fund laptops and phones, and a rule that makes the existing practice explicit may cost less in practice than it reads on paper. Businesses that already run hybrid arrangements competently may find the change close to cost-neutral.

The businesses at risk are the ones where the role genuinely cannot be done from home but the paperwork must still be done to decline it — a hospitality operator with a small back office, a workshop with two admin staff. For them this is pure administrative load with no operational upside.

This is the argument you hear most from employers, and it is worth taking seriously rather than dismissing — while being honest about how strong the evidence actually is.

The argument: if a role can be performed from a home office in Melbourne, it can usually be performed from an office in Manila or by software. Each incremental obligation attached to an Australian employee — superannuation, payroll tax, workers compensation, leave loading, and now the cost of their home workstation — widens the gap between an employee and a contractor offshore, or an automated process. Neither of those alternatives pays Australian payroll tax or PAYG. The substitution doesn't require any employer to be hostile to the policy; it only requires the arithmetic to change.

The honest counter: offshoring is not free either. Managing distributed contractors carries real cost, quality and coordination overheads, and Australia's contractor-versus-employee rules mean re-badging a local employee as an offshore contractor to duck obligations is legally fraught, not a clean escape. Automation displaces tasks faster than it displaces roles. And nobody has yet published Australian data isolating a WFH-cost effect on hiring — because the law hasn't started.

Where that leaves it: the risk is directional and real, the magnitude is unproven, and the policy contains no mechanism to monitor it. A government confident this won't shift hiring behaviour could have committed to measuring it. That it hasn't is the fair criticism — not that the sky is falling, but that nobody is checking.

1. Work out who is actually eligible. Not every role can reasonably be performed from home, and the assessment is role-by-role, not a blanket policy. Document the reasoning now, while it's calm.

2. Price the cost obligation before you receive a notice. Decide what your business will treat as reasonable — equipment, a contribution to running costs, a replacement cycle — and write it down. A consistent, documented position is far more defensible than case-by-case decisions made under a 21-day clock.

3. Build the 21-day response process. Who receives the notice, who decides, who drafts the response. Missing the window because the notice sat in a shared inbox is the most avoidable failure available here.

4. Fold it into your WHS position, not alongside it. Your duty to a worker at home already exists. Treat the new right as a trigger to get the home-workstation assessment right once, rather than as a separate compliance stream.

5. If you're under 15 employees, use the year. The 1 July 2027 deferral is time to prepare, not time to ignore it — and the threshold counts, so a business at 13 staff planning to hire is closer than it looks.

Our AI advisor can work through eligibility for a specific role, and the HR Pack generates the policy documentation if you're starting from nothing.

General information, not legal advice. Bill provisions as introduced 16 June 2026 and as described in published legal analysis to 2 August 2026; the Bill's operation may change through regulations and any constitutional challenge. Verified 2 August 2026.