All businesses will be roped into the Victorian government's policy to legislate a right for employees to work from home two days a week if they reasonably can, Premier Jacinta Allan announced on Tuesday.
She said an exemption would be considered for small businesses when launching a consultation period in August.
While the legislation is still being drafted, the "key detail" was ticked off in a meeting of cabinet on Monday.
"People want to see their right to work from home protected because it's at risk," Ms Allan told reporters on Tuesday.
"It's at risk from employers who are ... refusing requests to work from home for people who can."
Council of Small Business Organisations Australia chair Matthew Addison said the non-exemption would create a cost and compliance burden for all businesses, including "mum and dad" operators and sole traders with as few as one employee.
"Small business don't have a team of lawyers to interpret this," he told AAP.
"They are already saying they lose a day a week on red tape - here's some more red tape for them."
Sections of Victoria's business and investment community have expressed a sentiment that the state is not business-friendly enough, spawning a catchcry of "Anywhere But Melbourne".
The premier firmly pushed back on that assessment, declaring the state Labor government had slashed red tape and reduced 64 taxes.
Mr Addison said the election-year legislation appeared to "appeal to part of the population (but) not another part".
"This will hurt Victorian employers being able to employ so it's going to hurt Victorian business," Mr Addison said.
"We don't believe there is an appetite for it to spread (nationally) ... this is unnecessary."
Section 109 of the Australian Constitution dictates that if a state law conflicts with a Commonwealth law, the latter prevails.
Ms Allan has repeatedly pushed back against claims the move may not be legal, pointing to advice about an "explicit provision" in the Fair Work Act for state-based anti-discrimination laws.
"We have advice that it is constitutionally valid," she said.
"But let's be clear, what does it say about someone who wants to race off to the High Court to strip away a worker's right to work from home."
When the proposal was first unveiled, now federal shadow treasurer Tim Wilson labelled it "professional apartheid".
Victorian Opposition Leader Jess Wilson has signalled broad support for flexible work arrangements while awaiting the detailed legislation.
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