Jacinta Allan says planned work-from-home law would affect all Victorian businesses

All employers will be affected by the Victorian government’s plan to legislate a right to work from home two days week, with Jacinta Allan to confirm there will be no exemptions for small businesses.

It comes as cabinet met on Monday to greenlight the plan – a key pillar of Labor’s re-election campaign – with further announcements expected during the parliamentary sitting week.

On Tuesday, the premier planned to confirm that all businesses – regardless of size – would be covered by the laws once passed.

It marks a shift from comments Allan made last year indicating the government would consider an exemption for small businesses.

Allan said the government had consulted extensively with businesses and decided that applying the policy to all employers was a matter of “fairness”. She said while many large companies and organisations already offer flexibility, such arrangements were less common in small businesses, which employ about 1.3m Victorians.

“If you can work from home for a small business, you deserve the same rights as someone working for a big bank,” Allan said.

Last year, the premier announced that her government would legislate the right to work from home two days a week for those who can “reasonably” do so.

She said the legal right would apply to both public and private sector workers. But it remains unclear how it would be enforced, given Victoria, like other states, handed its industrial relations powers to the commonwealth years ago.

It was a move designed to wedge the state opposition after the issue became a flash point in the 2025 federal election campaign, in which Peter Dutton backed down on a policy to restrict work-from-home arrangements for public servants due to backlash.

Business groups roundly criticised the Victorian plan, arguing work-from-home arrangements were best reached by employers and employees. This included the Council of Small Business Organisations Australia, who at the time said the policy was “yet another example of the Victorian government steamrolling small business without proper consultation”.

“Small businesses are the backbone of Victoria’s economy, employing millions of Victorians, yet once again we’ve been completely sidelined in the development of workplace policy that will fundamentally impact how we operate,” chair Matthew Addison said.

The group had urged the government to considered exemptions for businesses with fewer than 50 full-time employees due to potential adverse effects.

Allan’s statement said work from home had increased workforce participation, saved families money and cut congestion.

“It saves time and money and gets more parents working,” she said.

“Not everyone can work from home, but everyone can benefit.”

The opposition leader, Jess Wilson, refused to provide a position on the policy at a business event last week, but said the Liberal party had a “longstanding history” of “supporting flexible working”.

“I completely understand that working from home is here to stay. So if the premier wants to put forward a proposal, we will look at that,” she said.

“But right now it’s on the premier to bring that forward.”