Western Australia’s construction industry is set for changes to subcontractor payment protections following the passage of new legislation through State Parliament.
On 22 October 2026, the WA Government announced that its Building and Construction Industry (Security of Payment) Amendment Bill 2026 had passed Parliament. The reforms are designed to strengthen protections for subcontractors working on eligible State Government construction projects, particularly if a head contractor becomes insolvent.
For subcontractors, tradies, builders and construction businesses across Western Australia, understanding these changes will be important as the new arrangements are introduced.
What are WA’s new subcontractor payment protection laws?
The new legislation aims to improve how subcontractor payments are protected on eligible State Government construction projects.
Under the proposed framework, a construction trust arrangement will replace the project bank account system that has been used across many State Government projects since 2019.
The aim is to provide greater certainty around subcontractor payments, strengthen protections against insolvency and reduce some of the administrative work associated with the existing arrangements.
Subcontractors play a vital role in delivering Western Australia’s homes, schools, hospitals, roads and infrastructure. When a head contractor experiences financial difficulties, subcontractors can be exposed to significant financial risks.
The reforms are intended to strengthen safeguards around money owed to subcontractors on eligible projects.
Who will be affected by the changes?
The reforms are particularly relevant to businesses involved in State Government construction projects.
This includes businesses such as:
– Subcontractors providing labour and specialist trade services.
– Electrical, plumbing and mechanical contractors.
– Civil construction and infrastructure businesses.
– Building contractors and head contractors.
– Construction businesses delivering eligible government-funded projects.
The construction trust arrangements are intended to apply to eligible State Government construction projects above the relevant financial threshold. The WA Government has identified projects worth more than $1.5 million in its announcement. The precise application of the scheme will depend on the final requirements and commencement arrangements.
**Important:** The reforms should not be assumed to apply to every construction contract or privately funded project. Businesses should check the official guidance to determine whether a particular project or contract falls within the new framework.
How will construction trusts work?
The new framework is designed to protect subcontractor payments through a construction trust arrangement.
Under the existing system, project bank accounts have been used to manage payments on eligible State Government construction projects.
The new arrangements are intended to replace those accounts with a construction trust, providing a more streamlined approach while maintaining protections for subcontractors if insolvency occurs.
The government has also indicated that the changes will provide greater flexibility for head contractors when establishing trust accounts with recognised financial institutions.
The intended benefits include:
– Stronger insolvency protections: Better safeguards for subcontractor payments if a head contractor becomes insolvent.
– Reduced administration: Less complexity associated with the existing project bank account arrangements.
– Greater certainty: Clearer payment arrangements for parties involved in eligible construction projects.
– Support for small businesses: Improved protection for subcontractors and other businesses delivering construction work.
The reforms form part of Western Australia’s broader approach to security of payment in the construction industry.
When do the new laws come into effect?
Although the legislation has passed Parliament and received Royal Assent, businesses should not assume that all new requirements are already operational.
The WA Government has indicated that detailed guidance will be provided to industry before the new requirements apply to State Government projects.
Construction businesses should monitor official announcements and confirm the relevant commencement dates, eligibility criteria and obligations before making changes to their processes.
For the latest information, consult the [WA Government’s announcement on subcontractor payment protection laws]
What should subcontractors and construction businesses do now?
While payment protection is an important part of running a construction business, businesses can also take practical steps to improve their financial administration and project recordkeeping.
1. Keep contracts and payment records organised
Maintain accessible records of contracts, purchase orders, invoices, payment claims and correspondence relating to your projects.
Having information organised can make it easier to review payment status, resolve queries and respond to requests for documentation.
2. Keep accurate records of hours worked
Timesheets and records of completed work can help businesses track labour, review project costs and support their internal payment processes.
Make sure the appropriate people can access and review the records they need.
3. Keep workforce tickets and licences up to date
Construction and infrastructure projects often require workers to hold current tickets, licences and other credentials.
An organised system for managing these documents can help businesses monitor expiry dates and identify missing or outdated information.
4. Review your project administration processes
Consider whether your current systems make it easy to manage workforce information, project records, timesheets and compliance documents.
Where information is spread across spreadsheets, emails and paper files, a more centralised approach may help reduce administrative workload.
5. Stay informed about legislative changes
As the new payment protection arrangements are implemented, businesses should review official guidance and seek professional advice where necessary.
Do not assume that the new framework automatically covers every contract or removes the need to follow existing payment claim procedures.
How digital workforce management can help construction businesses
Changes to construction legislation highlight the importance of having organised business processes and reliable records.
Although workforce management software does not replace payment protection laws or legal advice, digital tools can help businesses manage some of the administrative tasks involved in running construction projects.
Tradie Pass helps construction businesses bring workforce compliance and management into one platform.
Through Tradie Pass, businesses can manage workforce documents, monitor tickets and licences, organise workers against projects and use timesheet functionality to record hours worked.
By bringing these processes together, Tradie Pass aims to help construction businesses reduce administrative tasks and improve visibility across their workforce.
For businesses managing multiple workers and projects, having workforce information accessible in one place can make day-to-day administration easier.
Building a more organised construction industry
Subcontractor payment protection remains an important issue for Western Australia’s construction industry.
The passage of the Building and Construction Industry (Security of Payment) Amendment Bill 2026 represents a significant development in the state’s approach to protecting subcontractor payments on eligible government projects.
As implementation progresses, subcontractors, builders and construction businesses should stay informed about their obligations and ensure their project administration processes are ready for any applicable changes.
From payment records to workforce compliance and timesheets, good recordkeeping remains an important part of managing construction work effectively.
Tradie Pass is helping construction businesses bring workforce compliance, documentation and timesheet management together in one platform.
Discover Tradie Pass and explore a smarter way to manage your workforce Here
