Victoria’s WFH rules could push nearly half of businesses offshore – is that the right move?

Victoria just made history. From 1 September 2026, employees in large Victorian businesses whose roles can reasonably be performed from home will have a legal right to do so two days a week – enshrined in the Equal Opportunity Act, not negotiated case by case. Small businesses with fewer than 15 employees have until 1 July 2027 to comply. 

The response from business has been immediate and divided. Employees are largely supportive. Business groups have pushed back hard. And employers are quietly running the numbers on what this means for how they structure their teams going forward.

What the law says – and what it doesn’t

This isn’t a blanket right to work from home whenever you choose. It’s a right to two days per week, where the role can reasonably be performed remotely. Employers can still refuse – but only on genuine operational grounds, not preference or management style. Any refusal must be documented, consistent, and defensible. Disputes go to the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) for conciliation, and if unresolved, escalate to VCAT.

That last part matters more than it might seem. Positioning WFH under the Equal Opportunity Act rather than the Fair Work Act effectively frames it as a human rights issue – raising the legal and reputational stakes for any employer who wants to push back without solid justification.

For businesses that genuinely need people on-site, this is manageable with the right policies in place. For businesses whose roles could theoretically be done from anywhere, the conversation becomes more complicated.

How businesses are responding

The data from Remote – a global payroll and employment infrastructure company – is clear: 43% of Victorian businesses plan to increase offshore hiring if the new WFH policies are mandated as minimum requirements, and another 47% said they would shift toward contractors rather than permanent staff to reduce regulatory complexity.

That’s not a fringe reaction – it’s most Victorian employers reconsidering their workforce model in response to a single piece of legislation.

The logic isn’t hard to follow. As Graham Wynn, founder and director of Superior People Recruitment, put it: “If your job can be done from home, it can be done from anywhere.” Once a role is acknowledged as remote-capable, the geography of where that work happens becomes a legitimate business decision – and for many employers, an attractive one given the cost and compliance pressuresnow stacking up locally.

The shift toward offshore hiring was already happening – this legislation has simply given it more momentum. 68% of Australian firms have already offshored or plan to in the near term, and Australia recorded 339,400 job vacancies in May 2025 – around 40% higher than pre-pandemic levels.

The case for offshore teams – beyond the cost 

Cost savings get the most airtime in offshore conversations – and for good reason. Australian SMEs consistently report 50-70% in labor cost savings when building offshore teams. But the businesses that get the most out of offshore arrangements aren’t just trying to cut their wage bill – they’re trying to solve a problem that local hiring alone can’t fix: too few candidates, too long to hire, too much regulatory complexity, and a workforce model that doesn’t scale well under pressure.

When a role is remote-capable, there’s also a practical case for offshore that doesn’t get enough airtime. A local employee working from home triggers a growing list of employer obligations that an offshore team member in a managed office environment simply doesn’t: 

• OHS (occupational health and safety) obligations – when someone works from home, their home becomes their legal workplace. Employers are responsible for ensuring it’s safe: workstation setup, ergonomics, lighting, electrical safety. If an employee is injured working from their kitchen table, the employer could be liable.

• Right-to-disconnect – under federal legislation that took effect in August 2024, employees have the legal right to ignore work contact outside their working hours unless refusal is unreasonable. For businesses managing remote workers across different schedules, this adds real complexity around availability and responsiveness.

• WFH policy documentation – under the new Victorian legislation, businesses must have documented, consistent, and defensible processes for approving or refusing WFH requests. Getting this wrong exposes the business to conciliation and tribunal proceedings. 

An offshore team in a managed office environment sidesteps most of that. The employer retains clear oversight, the team operates in a professionally managed workspace, and the compliance picture is considerably simpler. That’s not a reason on its own to offshore – but for businesses already weighing the decision, it’s a factor worth understanding.

That said, there’s a version of this conversation that needs to be pushed back on. Offshoring as a workaround – a reactive move to sidestep compliance obligations or cut costs quickly – tends to produce exactly the outcomes that give the model a bad reputation: high turnover, poor integration, and teams that never really embed into the business. The businesses that build offshore teams that last aren’t doing it as a quick fix. They’re doing it thoughtfully, with a long view toward finding quality people who become a real part of how the business operates.

The legitimate concerns – and why they matter

This needs to be said plainly: offshoring isn’t without costs. When roles move offshore, local opportunities narrow – particularly for entry-level workers and recent graduates who rely on those positions to build experience. The Victorian Chamber of Commerce and Industry has flagged concerns about job losses and investment leaving the state, and the Business Council of Australia warned that “a one-size-fits-all mandate will drive investment and jobs away from the state at a time they’re needed most”.

There’s also a broader question worth asking: whether government mandates on how businesses manage their workforce – however well-intentioned – risk pushing decisions that might otherwise have been made carefully and collaboratively into reactive territory. Businesses that feel they’ve lost control over workforce design tend to make blunt decisions rather than considered ones, and that’s rarely good for employees, local or offshore.

The more balanced view is that offshoring works best when it extends a local team’s capacity rather than replaces it. Businesses that use offshore teams to absorb execution-heavy work typically find their local staff doing higher-value work, not fewer jobs. But that outcome requires deliberate design, not a compliance workaround.

What this means in practice

For Victorian businesses weighing their options right now, a few things are worth considering:

• Compliance complexity is real. Managing a domestic remote workforce under the new legislation requires documented policies, consistent decision-making, and defensible refusal processes – the administrative overhead isn’t trivial.

• Remote-capable doesn’t mean offshore-ready. Not every role that can be done from home is a good candidate for offshoring. Judgment-dependent, client-facing, and strategically sensitive roles typically stay local. Execution-heavy, process-driven functions – finance operations, digital marketing, development, and administration – are where offshore teams consistently add the most value.

• The model matters more than motivation. Businesses that treat offshore teams as embedded functions – same tools, same reporting lines, same performance standards as local staff – consistently outperform those that treat it as a vendor arrangement or a regulatory workaround.

The bigger picture

Victoria’s WFH legislation is one data point in a longer shift in how Australian businesses think about where work gets done. The pandemic normalized remote work, talent shortages made offshore hiring practical, and rising compliance complexity is now making it strategically attractive in a way it simply wasn’t before. Whether or not the Victorian legislation is the right policy call – and reasonable people disagree on that – the workforce decisions it’s prompting are real.

The businesses that navigate this well won’t be the ones that react fastest. They’ll be the ones that think most carefully about what kind of team they’re trying to build – and make decisions that hold up over the long term, not just the next quarter.