The federal government's plan to close a labour hire "loophole" is facing a targeted campaign by some of Australia's largest employers and small business groups, who say it unfairly punishes people who work harder or have more experience. 

Peak bodies for mining, petroleum, construction, farming, and small and large business have mounted a national campaign against the proposed "same job, same pay" workplace reforms, which would require labour hire workers doing the same job at the same site to be paid the same as directly employed workers.

The government is still consulting on the legislation but says businesses should have access to labour hire for work surges, not as a "loophole" to suppress wages.

Business groups fear the laws will mean employees with little knowledge or experience would be paid the same as workers with decades of knowledge and experience.

"How is it fair that someone with six months' experience can demand the same pay as someone with six years' experience?" Minerals Council chief executive Tania Constable said.

"Our workplaces should be about fairness, reward for effort, and experience. Not a blanket approach that fails to understand that all workplaces are unique and worker ambition and values [are] varied."

Treasurer Jim Chalmers said the campaign was misleading, and flatly denied it would prevent employers from rewarding experience or hard work.

"This isn't about stopping businesses rewarding experience. It's about making sure that workers are eligible for the pay and conditions that the employers have agreed with their workforces," Mr Chalmers told the ABC. 

"It's about closing loopholes to make sure that labour hire, for example, or casual workers or gig workers are used in the way that they're intended."

The federal government has not yet introduced the legislation to parliament, but in its consultation paper suggested overtime or incentives covered in an employee's enterprise agreement would only be payable to a labour hire worker if they met those same conditions.

The consultation paper does not directly address business concerns about paying for age or experience.

Industrial Relations and Employment Minister Tony Burke has labelled some arguments made in the campaign as "absurd", pointing out that the proposal is yet to be fully outlined by the government.

"Businesses are welcome to spend as much money as they want on an advertising campaign against a policy that I've never articulated," Mr Burke said.

Mr Burke argued the government wants to close a loophole that is "undercutting rates of pay that have been agreed to".

"If they want to run a big TV campaign, campaigning against something we're not doing — then go hard."

Unions accuse business of 'scare campaign'

Australian Chamber of Commerce chief executive Andrew McKellar said though the legislation was still being consulted on, business groups had mounted a campaign based on concerns that the issue of experience would not be addressed.

"This is the policy that is being put forward, and this is very clearly the agenda that is being pushed by the union movement," Mr McKellar said.

"It doesn't go to ensuring that people are rewarded either for their hard work or their effort."

The Mining and Energy Union (MEU) said it "wished" the minerals sector would reward skills and experience, and that business groups were running a "scare campaign".

"Contractors deserve to be paid more if they are specialist or meeting genuine short-term demand. Instead, employers are using the labour hire loophole to drive down wages and conditions for whole sections of the workforce," the MEU said in a statement.

"We are not surprised the mining industry has resorted to a scare campaign to muddy the waters about this important and necessary reform.

"We note they have chosen not to feature the mining industry in their ads, because mineworkers would see through the bullshit."