Commercial Cleaning Business Compliance in Australia: Licences, Employment, and WHS

The commercial cleaning industry is one of Australia's most compliance-dense small business sectors. Complex award provisions, high rates of casual employment, chemical safety obligations, and contractor/employee classification issues create significant compliance exposure for cleaning business owners.

This guide covers what you need to have in place.

Business Registration and Licences

Commercial cleaning businesses typically require:

• ABN and business registration — for companies, ASIC registration; for sole traders and partnerships, state registry
• Business licence (some states) — check with your state's licensing authority
• Public liability insurance — essential given workers operate on clients' premises

In some states, security licensing requirements apply to cleaning contractors who have unaccompanied access to sensitive or high-security premises (government buildings, banks, critical infrastructure). Check whether your contracts require any cleaning staff to hold security licences.

The Cleaning Services Award

Most commercial cleaning workers are covered by the Cleaning Services Award 2020. This is one of the most important and frequently misapplied awards in the cleaning industry.

Key provisions of the Cleaning Services Award include:

Pay Rates by Classification

The Award classifies employees based on their duties and experience:

• Grade 1: Basic cleaning duties
• Grade 2: Cleaning with some supervisory or specialist responsibilities
• Grade 3: Supervisors and team leaders
• Grade 4+: Management levels

Misclassification — particularly keeping experienced employees at Grade 1 — is common and results in systematic underpayment.

Penalty Rates

The Award includes penalty rates for:

• Evening work: Work performed after 6pm and before midnight on weekdays
• Night work: Work performed between midnight and 6am
• Saturday work: 125% of ordinary rate
• Sunday work: 150% of ordinary rate
• Public holidays: 250% of ordinary rate

Many cleaning contracts involve early morning (4am–8am) or late-night cleaning — these attract night shift penalty rates. If you are paying flat ordinary rates for these hours, you are likely underpaying.

Part-Time Minimum Hours

Part-time employees under the Cleaning Services Award must receive a minimum engagement of 3 consecutive hours per shift. This prevents employers from scheduling workers for very short shifts that are unprofitable for the employee.

Casual Loading

Casual employees must receive a 25% casual loading on top of the applicable award rate. Many cleaning businesses employ workers as casuals to avoid leave entitlements — but the casual loading must be correctly applied, and conversion rights now apply after 12 months of regular work.

Allowances

The Award includes allowances for:

• Toilet cleaning allowance: Payable per day when a worker's principal duty involves cleaning toilets
• Disability allowance: Payable for work in unusually dirty or unpleasant conditions
• Industry disability allowance: Applicable to work in certain environments
• Supervisory responsibility allowance: For employees with supervisory duties

Many cleaning operators miss these allowances entirely.

Contractor vs Employee in Cleaning

The cleaning industry has a long history of engaging workers as contractors — subcontracting cleaning staff through labour hire arrangements or "franchisee" models. The Closing Loopholes 2024 reforms significantly tightened the employee definition, making many of these arrangements more likely to be found to be employment.

Key indicators that a cleaning worker may be an employee (not a contractor):

• Works exclusively for one cleaning business
• Has no genuine independent business
• Provides labour only, not a business outcome
• Has their schedule determined by the cleaning business
• Uses equipment provided by the cleaning business

The Fair Work Ombudsman and state revenue offices have both been active in the cleaning industry, and many operators have faced back-payment demands after contractor arrangements were found to be employment.

Chemical Safety and WHS

Commercial cleaning involves significant chemical hazards. Your WHS obligations include:

Safety Data Sheets (SDS)

You must obtain and maintain current Safety Data Sheets for every hazardous chemical used by your workers. SDS must be:

• Accessible to workers (not just filed away — workers who use the chemicals must be able to access the relevant SDS)
• Current (less than 5 years old for hazardous chemicals)
• In English

Training on Chemical Use

Workers who use hazardous cleaning chemicals must be trained in:

• Safe handling procedures
• PPE requirements for each chemical
• What to do in the event of a spill or exposure
• How to read an SDS

Training must be documented.

PPE for Chemical Use

Appropriate PPE for cleaning chemicals includes:

• Gloves (appropriate to the chemical — not all gloves protect against all chemicals)
• Eye protection (when splashing is possible)
• Respiratory protection (for products with significant vapour or aerosol risk)

Chemical Storage and Transport

Cleaning chemicals must be stored:

• In original containers (or clearly labelled secondary containers)
• Away from incompatible materials
• In areas with adequate ventilation
• Securely (particularly if toxic or concentrated products are kept in vehicles)

Chemicals transported in company vehicles must be secured to prevent spills.

Record-Keeping for Cleaning Businesses

Under the Fair Work Act, you must maintain employment records for 7 years. Given the casual and part-time nature of cleaning workforces, ensuring accurate time records is particularly important.

Key records include:

• Timesheets or electronic time records for every worker
• Shift records including start time, finish time, and location
• Pay slips for every pay period
• Super contribution records

Time records are critical if a worker disputes their hours or pay — without them, you cannot prove compliance.

Managing Labour Hire Workers

Many cleaning businesses use labour hire workers. Be aware that:

• Under the labour hire licensing laws in Victoria, Queensland, and South Australia, businesses that supply workers to other businesses must hold a labour hire licence
• The Same Job Same Pay provisions introduced by the Closing Loopholes Act may affect labour hire arrangements where labour hire workers perform work that would otherwise be done by employees covered by an enterprise agreement

How Reguladar Helps

Commercial cleaning compliance involves the Cleaning Services Award (with its complex penalty rate and allowance structure), WHS chemical safety obligations, contractor/employee classification issues, and general employment law — all in an industry with high rates of casual employment and subcontracting.

Reguladar tracks your specific obligations based on your business type and workforce, surfacing award rate changes, WHS requirements, and compliance deadlines in a single dashboard.

Get your cleaning business compliance in order. Start your free compliance check at Reguladar and see your complete compliance profile today.