Early childhood centres are struggling to fill staff vacancies because of lengthy delays in background checks by the Police Vetting Service.
Under the Vulnerable Children Act, which came into force last year, all people who want to work with children must be vetted by the police.
But nearly half of all applications are being processed after the maximum 20 working day time frame.
Early Childhood Council chief executive Peter Reynolds said centres were losing out on job candidates who could not afford to wait more than a month for their applications to be approved.
"We've got plenty of examples of centres that have contacted us and said 'look, we've been waiting since June, with outstanding police vetting requests, we've had candidates walk away and get other jobs because of the delays in getting timely response from the police'. This is not being handled well."
Mr Reynolds said it meant some centres were having to re-interview for positions, after waiting weeks for police checks to come through.
Early childhood centre owner Mira Mautner said in some cases it can take a couple of months for the vetting to come through and they have to try to find relievers.
"In some instances the person that you want to employ ... gets a job somewhere else and then the whole process starts from scratch."