The difference between offshore staffing and a BPO is not the invoice. It is one clause. Under a BPO or labour hire arrangement the worker is the provider's staff member, you are buying access, and the contract prices your right to employ that person yourself. Under an employer of record the person is employed for your business from the first day, so there is nothing to buy out.
Most Australian founders have never read that clause. It is about to get interesting.
The difference the draft bill is really about
Treasury released exposure draft legislation on 7 September for the Treasury Laws Amendment (Banning Unfair Non-Competes) Bill 2026, and submissions close on 2 October. The headline is a ban on non-compete clauses for workers earning under $190,100, the Fair Work Act high income threshold for the year ending 30 June 2027.
The parts nobody led with matter more to a thirty-person business. Co-worker non-solicitation clauses are prohibited for every national system employee with no income threshold at all, and a clause that survives into a contract has no effect. No-poach and wage-fixing provisions become cartel provisions under the competition law, described in the explanatory materials as provisions between parties that relate to each party's staff.
Cartel conduct is not an employment problem. It is an ACCC problem.
Your staffing provider has already priced the thing the bill wants banned
What's the difference between offshore staffing and a BPO, and which keeps me in control?
Two Australian providers publish the answer in their own terms.
Remote Staff's published FAQ states there is "a Placement Fee of AUD 8,000+ GST per staff" where a client wants to hire someone directly rather than keep paying through it. Remote Office goes further. Clause 6 of its terms is headed BUYOUT, says "The Client agrees not to Directly Engage the Contractor", and defines Directly Engage as employing, contracting directly, or contracting through any intermediary in any capacity. Do it anyway and you owe six months of fees.
Neither clause is buried. Both are the model working exactly as designed.
Run the arithmetic on the one with a figure attached. AUD 8,000 plus GST is AUD 8,800, paid once, for permission to employ a person who already works your hours on your systems. Outstaffer publishes Employer of Record at USD $250 per employee per month, which is USD $3,000 a year and USD $6,000 across two years, with the person employed for your business the entire time. One buyout cheque is larger than two years of platform fee, and it buys nothing except the right to keep them.
That is the same structural point behind what you are really buying when an agency quotes a percentage, and behind the eight structural gaps between the two models we wrote up three years ago.
The honest case for the clause
Does the ban reach a supplier's buyout clause?
Probably not, on the current draft.
The no-poach provisions are written around arrangements between parties about each party's staff, which reads as mutual. A one-way fee paid by a client to a provider is a commercial term in a services contract, not two businesses agreeing not to raid each other. Providers have a real argument too: they carried the recruitment cost, and a client who hires the person away after four months has taken the value and left the cost.
None of that is unreasonable. It is also not the point.
Related reading
- Two Of Your Thirty Staff Already Work Somewhere Else
- A Second Client Does Not Make Your Contractor A Contractor
Which model keeps you in control after 2 October
Waiting to see whether the drafting catches your supplier agreement is the expensive option. The clause is in the contract now, it has a number now, and the number is payable whether or not the bill passes in its current form.
Read it this week. If your provider charges you to employ your own team member, you have not built a team, you have rented one, and the rent includes a ransom. If you want the other structure, where the person is your employee and the platform fee is the whole price, sign up and put one role through it. Classification and compliance turn on your own facts, so get advice before you act on a clause.
What is the buyout number in your contract, and did you know it was there before this morning?
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