In This Blog:
- ➤
What Is The Modern Slavery Act Summary? - ➤
Under $100 Million? You’re Not Off the Hook Just Yet - ➤
Modern Slavery Act Reforms 2025 and 2026: What’s Changing and When - ➤
What Does a Modern Slavery Statement Cover (And Whether Your Business Needs One) - ➤
Practical Steps: What Australian SMEs Can Do Right Now - ➤
Be a Supply Chain Asset By the Way You Hire Offshore - ➤
FAQs
What comes to mind when you think about “Modern Slavery Act Australia”? The big players like Woolworths? Telstra? BHP?
Many SMEs think that the Act has nothing to do with small to medium-sized AU businesses. Maybe your team’s less than a hundred. Maybe even less than 20. Surely it has nothing to do with you.
But that’s the misconception.
Business owners have fallen into the trap of thinking along those lines. They have virtual specialists from an outsourcing agency and a few more local hires, but they’ve never thought about how the Act might impact them.
The Act doesn’t care about business size. It’s also about to have a longer arm, reaching well below the $100M annual consolidated revenue threshold.
How is it enforced? Indirectly, through supply chain pressure and client questionnaires. And with the 2024 Fair Work ruling recently changing what “offshore contractor” means legally, SMEs haven’t caught up with all of them.
There are so many reforms, most of them live and actively changing. Where does your business stand with the Modern Slavery Act, and how can you make sure you stay compliant?
What is the Modern Slavery Act?
The Modern Slavery Act 2018 (Cth) requires Australian businesses with AUD $100M+ in annual consolidated revenue to identify, report on, and publish their modern slavery risks across their operations and supply chains. It covers eight practices including forced labour, human trafficking, debt bondage, and deceptive recruitment. While the Act applies directly to large businesses, supply chain pressure and recent legal rulings have effectively extended its reach to smaller enterprises as well.
What Is The Modern Slavery Act Summary?
Australia’s Modern Slavery Act is a transparency law requiring large businesses operating in Australia to identify and report on modern slavery risks within their operations and supply chains.
Instead of imposing direct penalties, companies must publish annual statements outlining risks and the actions they’re taking to address them.
You may have already noticed it: “large businesses.” It’s actually what SMEs tend to focus on, and through the misassociation, ignore the Act altogether.
Although the Act directly applies to large businesses, it can affect even small to medium-sized ones. And even those whose teams are supported by offshore workers.
The law encourages accountability, and its reach ripples through supply chains and vendors. That way, clients and partners can expect compliance even from businesses not formally within the scope of the modern slavery reporting requirement boundary.
However, continuing reforms are about to clear up some of the grey areas in the 2018 rollout.
Other details about the Modern Slavery Act Australia 2018:
- The Act came into force on January 1, 2019, under the “Commonwealth Modern Slavery Act 2018”
- Reporting threshold: businesses or entities operating in Australia with AUD $100M+ annual consolidated revenue
- Eligible entities must file an annual Modern Slavery Statement, which is to be submitted to the Attorney-General’s Department and published on the Modern Slavery Statements Register
As of today, over 3,000 entities are captured in the Register.
8 Practices Classified as modern slavery:
- Human trafficking laws Australia
- Slavery
- Servitude
- Forced marriage
- Forced labour
- Debt bondage
- Deceptive recruitment
- Worst forms of child labour
Pre-reforms, the 2018 Act didn’t mandate action before reporting. There are also no financial penalties.
Under $100 Million? You’re Not Off the Hook Just Yet
It’s easy to dismiss the Modern Slavery Act Australia introduced in 2018 because of that number. Businesses that haven’t been earning, or have never earned AUD $100 million+ in annual revenue, turn the other way, believing the Act doesn’t apply to them.
But there are technicalities in between the named provisions, often unintentionally eluded by SMEs. These catch them off guard once they come under regulators’ radars.
Mechanism 1: The Supply Chain Questionnaire
Large businesses required to report under the Act must describe modern slavery risks across their entire supply chain. This includes their suppliers. In this context, “large businesses” are classified by annual consolidated revenue, regardless of headcount.
But you don’t have to be that “large business.”
If you supply goods or services to any entity with $100M+ revenue, you will be asked to demonstrate that your own supply chain is clean. Entities may include major retailers, government agencies, and publicly listed companies.
Though many already do so, SMEs that are unable to prove a clean supply chain automatically lose the contract.
Illustration: Andrew owns a cleaning business contracted to a major retail chain in Sydney. He has 15 people in his team and turns over well under $100M, so Australian modern slavery laws have never crossed his mind.
Then his retail client’s procurement team sends a supplier questionnaire: 12 questions about labour practices, worker engagement, and his modern slavery policy.
With the deadline looming in 30 days, Andrew has no policy and no documentation. He misses the deadline, and the contract goes to a competitor who has a modern slavery policy in place.
Mechanism 2: Government Procurement Requirements
State and Commonwealth procurement policies increasingly require suppliers of any size to have a modern slavery policy within reach. One prominent example is the Queensland Supplier Code of Conduct 2023.
According to this Code of Conduct, suppliers must meet certain standards and expectations, such as ethical behaviour, labour practices, human rights (including modern slavery), environmental responsibility, and fair business conduct.
If you want government contracts, you need to show you’ve made steps towards following said standards and requirements, even if you’re not formally reportable under the Modern Slavery Act Australia SME obligations.
Mechanism 3: Pascua v Doessel Group [2024] FWC 2669
This development directly targets outsourcing or offshore hiring. The Fair Work Commission ruled that a Filipino paralegal working remotely for an Australian firm, despite being engaged as a contractor, was legally an employee.
The Filipino paralegal was awarded Australian employment protections and minimum wage entitlements.
If your offshore worker is being paid below what the Fair Work Commission (FWC) considers adequate and can be classified as an employee, you’ll be facing a Fair Work liability and a potential modern slavery exposure simultaneously.
The $100M threshold tells you whether you must report. But it doesn’t tell you whether you’re exposed.
Illustration: A Brisbane-based 20-person logistics company supplies to a national retail client. The client sends a supplier questionnaire. The business owner has three VAs in the Philippines hired directly through a freelancer platform.
With no documentation, no written policy, and no visibility into how the platform vets its workers, the business owner loses the contract review.
Full Breakdown: Fair Equitable Contracting Policy
Modern Slavery Act Reforms 2025 and 2026: What’s Changing and When
Post-December 2024, the Australian government responded to the lack of reform at an SME level. Many AU businesses aren’t aware of the 2026 position paper, and have no clue they may risk being uncompliant to the Act’s mandates.
While many are waiting for a final approval before being written into law, here are the reforms to take note of so you can stay ahead.
The McMillan Review: May 2023
The McMillan Review comprises 30 recommendations. These were put forward by Professor John McMillan AO following the Act’s first three-year review, where a key finding was this:
“Modern slavery reporting is not being taken seriously enough.”
The Act hadn’t led to meaningful change until then, and the McMillan Review called for penalties, lower thresholds, and mandatory modern slavery due diligence.
The Anti-Slavery Commissioner: June 2024
The Modern Slavery Amendment Bill passed both Houses and received Royal Assent. Chris Evans, Australia’s first Anti-Slavery Commissioner, was appointed. Among his responsibilities as Commissioner is to advise the government, support victims, help businesses stay compliant, and issue declarations on high-risk sectors and regions.
The Government’s Response: December 2024
The Australian Government agreed to 25 of the 30 McMillan recommendations. These are the key decisions:
- Penalties for non-compliance: agreed in principle; coming, not yet passed into law
- Reporting threshold: retained at $100M; the recommendation was to lower it to $50M, but it hasn’t been accepted at this stage
- High-risk declarations: the Commissioner has the authority to flag high-risk sectors, regions, products, and supply chains
- Mandatory due diligence: under active consultation; not yet implemented, but the direction is headed that way
Who Is the Anti-Slavery Commissioner? The Commissioner’s Position Paper on January 2026
Commissioner Chris Evans released a position paper with two firm recommendations: mandatory, risk-based human rights due diligence for all reporting entities, and a formal high-risk declaration mechanism.
The position paper marks a major reform where reporting-only compliance is no longer deemed sufficient.
The Modern Slavery Compliance Australia Runway
There’s a small window between now and when penalties and mandatory due diligence become law. If you’re unsure about your supply chains and partner compliance, make a modern slavery risk assessment and make sure everything’s in order before legislation forces the hammer down on your operations.
What Does a Modern Slavery Statement Cover (And Whether Your Business Needs One)
The law doesn’t require every Australian business to file a modern slavery statement. But understanding what one should cover, and how it can affect potential contracts with clients and government agencies you want to work with, remains relevant and independent of revenue size.
Though mandatory ethical supply chain reporting is required for businesses with an AUD $100M+ annual consolidated revenue, operating in Australia, voluntary reporting and corporate modern slavery disclosure is for any business, often for commercial reasons.
6 mandatory criteria every statement must address:
- The entity’s structure, operations, and supply chains
- Risks of modern slavery in supply chains and operations
- Actions taken to assess and address those risks
- How the entity assesses the effectiveness of those actions
- The process of consultation with entities it owns or controls
- Any other relevant information
The Modern Slavery statement Australia accepts must be board-approved and signed by a director or a responsible member from the reporting entity itself. It must be submitted within 6 months of the financial year end.
Example: If the year ends on December 31, the statement will be due on June 30.
To cap it off, it should be published publicly on modernslaveryregister.gov.au.
Why SMEs Should Consider a Voluntary Statement
A voluntary statement can be considered as one of the signals telling large clients and government procurement teams that your business has its house in order. It’s a preemptive approach against supplier questionnaires.
It also serves as a disqualifier, in that the absence of a policy or statement can be interpreted as a compliance failure. So, your bid gets disqualified before it goes through the full and lengthy evaluation process.
In construction, professional services, logistics, healthcare, and sectors where ESG scrutiny is growing, a voluntary statement is becoming an important prerequisite.
Offshore Hiring and the Modern Slavery Act: Where the Risk Lies
How’s your business’s hiring process? Do you hire locally, remotely, or is it a mix of both?
The Outsourcing Misconception
Many AU business owners assume that because their Filipino VA or offshore team member is employed locally under Philippine labour law, Australian compliance obligations don’t touch that relationship.
The Pascua ruling dismantled part of that assumption for employment classification. The Modern Slavery Act dismantles another part of supply chain accountability:
If your offshore staffing arrangement can’t be or isn’t documented, it becomes a liability in your own supply chain report.
Practical Steps: What Australian SMEs Can Do Right Now
Below are things you can do as a business owner and employer, without the need for lawyer support.
#1. Map Your Supply Chain (Even If It’s Small)
List every person, contractor, agency, or platform your business uses to get work done. Note where each one is based and how they are engaged. This is the foundation of any modern slavery risk assessment.
Map out the risks, then make the report.
#2. Review How Your Offshore Workers Are Engaged
Check whether your current offshore staffing arrangement can provide documentation of worker entitlements, pay rates, and employment classification. If they can’t, that is your risk. If you use a registered agency, request their modern slavery statement or employment practices documentation.
#3. Write a Simple Modern Slavery Policy
Even without a formal statement, a one-page internal policy establishes your position. State the following:
- Your business does not knowingly engage suppliers that use forced labour, child labour, or debt bondage
- You will conduct due diligence on new suppliers
- You will respond to client requests for supply chain documentation.
The Attorney-General’s Department publishes free guidance, so take advantage of it.
#4. Respond to Client Supplier Questionnaires IMMEDIATELY
As soon as you receive the questionnaire, if possible. If a large client has sent you a modern slavery questionnaire, do not put it off. Unanswered questionnaires flag your business as a supply chain risk.
Answer it, even if your response is: “We are at an early stage of implementing our modern slavery policy, and here is what we are doing.” Supply chain transparency Australia trusts wins over silence in this matter.
#5. Get Ahead of the Compliance Runway
Mandatory due diligence is under active consultation, and once approved, penalties will be imposed on non-compliance. The Anti-Slavery Commissioner has already stated plainly that passive compliance is no longer acceptable.
Build practices now so when legislation passes, you won’t be under pressure to only then go by the guidelines. Businesses that act in 2025 will have a documented history of effort when the penalties framework arrives.
#7. Consider an Employer of Record (EOR) Arrangement for Your Offshore Team
If you hire offshore staff directly, whether through a freelancer platform or a direct contract, you’re carrying the employment classification risk that the Pascua ruling brought to light.
An Employer of Record (EOR) arrangement removes that risk entirely, especially if you work with a compliant outsourcing agency. The staffing provider is the legal employer in the Philippines. Your contract is with the provider.
The worker’s entitlements, statutory benefits, and employment classification are handled under Philippine labour law by a registered entity. If a supplier questionnaire asks how your offshore workers are engaged, you’ve got your clean, documented answer.
Understand more about Employer of Record EOR and ensure proper budgeting for your offshore employers using the Remote Staff Free Outsourcing Calculator:
Be a Supply Chain Asset By the Way You Hire Offshore
Your approach to managing offshore workers influences your standing in a client’s supply chain assessment. Hiring directly through a freelancer platform with no formal documentation leaves you with nothing to show when a supplier questionnaire arrives.
What holds steady under scrutiny: a compliant, registered staffing provider where workers are legally employed, properly classified, and covered by statutory benefits. That documentation is what procurement teams and tender assessors are looking for.
Remote Staff’s Fair Equitable Contracting Policy outlines exactly how worker dignity, fair pay, and safe working conditions are maintained across every engagement. Every engagement is built around full compliance with Philippine labour law, so if a supplier questionnaire lands in your inbox tomorrow, you have something concrete to point to.
Our team knows what compliant offshore hiring looks like for your business, and we help you review your current offshore hiring arrangement against the Act’s supply chain requirements.
FAQs
Does the Modern Slavery Act apply to my business if I’m under $100 million in revenue?
No, you are not legally required to report. But you are likely already affected via supply chain flow-on, client questionnaires, and government procurement requirements.
Do I need a modern slavery statement if I hire staff in the Philippines?
It’s not legally required unless you’re over $100M. But using a compliant hiring agency that maintains documented employment practices makes it easier for you: through the hiring agency’s help, you already have the evidence you’d need to answer a supplier questionnaire or pass a contract review.
What are the penalties for not complying with the Modern Slavery Act in Australia?
Currently, no financial penalties exist, but that is quickly changing. The Australian Government agreed to introduce penalties, in principle, following the 2023 McMillan Review. Once passed, businesses not meeting current reporting requirements should treat the current period as a very short compliance runway.
Which countries have a Modern Slavery Act?
Australia and the United Kingdom are the two countries with standalone Modern Slavery Acts. Australia’s came into force in 2019, the UK’s in 2015. Several other countries have comparable legislation: the United States has the Trafficking Victims Protection Act, Canada passed the Fighting Against Forced Labour and Child Labour in Supply Chains Act in 2023, and the European Union is finalising its Corporate Sustainability Due Diligence Directive.
What is the role of the Australian Anti-Slavery Commissioner?
Chris Evans was appointed as Australia’s first Anti-Slavery Commissioner in 2024. His role covers supporting victims, advising the government, helping businesses understand their obligations, and issuing declarations that flag high-risk sectors or supply chains. His January 2026 position paper recommended mandatory human rights due diligence for all reporting entities.
How does the Pascua v Doessel ruling affect Australian businesses that hire offshore?
The Fair Work Commission ruled in 2024 that a Filipino worker hired as a contractor by an Australian firm was legally an employee entitled to Australian workplace protections. This means businesses that directly hire offshore staff, particularly those who direct daily work, set hours, and provide tools, may face both employment law and modern slavery exposure if that worker is underpaid or improperly classified. The safest structure is an Employer of Record (EOR) arrangement, where the staffing provider is the legal employer in the Philippines.
Compliance Isn’t Just for the Big Players
The $100M threshold is a reporting line. Smaller businesses are already pulled into the Modern Slavery Act’s reach through supply chain pressure and a 2024 Fair Work ruling. Add to that the redefinition of an “offshore contractor.”
And nothing’s set just yet. Reforms are still being reviewed, and many are on the way to implementation.
As early as now, Australian SMEs are mapping out who they work with and are going over how they engage their offshore teams. They’re making the right adjustments. They’re partnering with offshore hiring agencies for Employer of Record. So should you.
The Act is about responsibility, irrespective of the dollar threshold or business size. Get it right now, and it’ll cost far less than backtracking and dealing with the consequences of non-compliance.
Getting it right now costs far less than fixing it later. To understand more about what compliant offshore hiring looks like for your business, call us today or Request a Callback.
Vaune Everis Cura has always been a writer in the truest sense, drawn to the art both as a personal creative pursuit and as a profession. Her experience penning content across digital marketing spaces and collaborating with business owners and market shapers has broadened her craft to include strategic direction and SEO insight. Having spent years with the InterContinental Hotels Group before stepping boldly into freelancing, she understands that at the centre of it all are genuine, meaningful brand–customer relationships built on purposeful, human content.
