New South Wales has become the first Australian state to pass specific workplace health and safety legislation governing the use of artificial intelligence, algorithms and digital systems in the workplace.
The Work Health and Safety Amendment (Digital Work Systems) Act 2026 was passed by the NSW Parliament on 12 February 2026. It amends the Work Health and Safety Act 2011 (NSW) to introduce explicit duties for businesses in relation to digital work systems and expands the rights of WHS entry permit holders to inspect those systems.
The Act has not yet commenced. Its primary duty and further WHS duty provisions will come into effect once proclaimed. The union entry provisions will not commence until at least one month after SafeWork NSW publishes the required guidelines, which are still being developed.
Despite the Act’s NSW focus, the implications extend well beyond state borders. Safe Work Australia has been tasked with considering whether the national model WHS laws should be amended to address the same subject matter. Businesses operating across multiple jurisdictions should be paying attention now.
What the Act requires
The Act introduces two principal changes to the WHS framework.
A new primary duty regarding digital work systems. A new section 19(3)(c1) of the WHS Act provides that a person conducting a business or undertaking (PCBU) must ensure, so far as is reasonably practicable, that the health and safety of workers is not put at risk from the use of digital work systems by the business. This obligation applies to any use of digital work systems by the PCBU, not only to the allocation of work.
A specific duty regarding work allocation. A new section 21A requires PCBUs that use digital work systems to allocate work to ensure, so far as is reasonably practicable, that the allocation does not put workers’ health and safety at risk. In meeting this obligation, a PCBU must consider whether the allocation of work through a digital work system creates or contributes to specific categories of risk.
Those risk categories include:
- Excessive or unreasonable workloads.
- The use of excessive or unreasonable metrics to assess and track worker performance.
- Excessive or unreasonable monitoring or surveillance of workers.
- Unlawful discriminatory practices or decision-making.
The Act defines a digital work system broadly as “an algorithm, artificial intelligence, automation or online platform.” An earlier draft included “software” in this definition, but this was removed before the Bill passed, indicating that ordinary email and messaging systems are not intended to be captured.
The scope is broader than the gig economy
The reforms were prompted in part by concerns about the treatment of gig economy workers who receive tasks through apps and digital platforms. In her second reading speech, NSW Minister for Industrial Relations Sophie Cotsis referenced delivery drivers and riders, warehouse workers and home care workers whose work is directed by algorithms.
However, the Act’s definitions are not confined to the gig economy. The broad language of “algorithm, artificial intelligence, automation or online platform” captures a range of systems commonly used across Australian businesses of all sizes and industries. These include:
- Automated rostering and scheduling tools.
- Performance-tracking and productivity monitoring software.
- AI-driven task allocation and workflow management systems.
- Algorithmic decision-making tools used in HR processes.
- Online platforms used to manage, allocate or monitor work.
For mid-market businesses that have adopted these tools to improve operational efficiency, the Act introduces a requirement to assess whether those tools create or contribute to health and safety risks for workers. The obligation sits within the existing WHS framework of “reasonably practicable” measures, but it makes explicit what was previously a matter of interpretation.
The connection to psychosocial hazard management
The risks specifically identified in the Act, including excessive workloads, unreasonable performance metrics, constant monitoring and discriminatory outcomes, are closely connected to the psychosocial hazard management obligations that already apply under WHS codes of practice across Australian jurisdictions.
Since 1 April 2023, the model WHS Regulations have included a specific obligation requiring PCBUs to manage psychosocial risks in the workplace. The NSW Act extends this principle by requiring businesses to consider how digital systems may create or amplify psychosocial hazards.
In practical terms, this means that a business using an automated system to set performance targets, monitor worker activity or allocate tasks should assess whether the system’s operation creates risks such as sustained high cognitive demand, reduced worker autonomy, a sense of constant surveillance, or algorithmic outcomes that affect workers in ways that are unpredictable or difficult to challenge.
These are questions that many businesses have not yet considered in the context of the digital tools they use daily.
Expanded union entry provisions
The Act also expands the rights of WHS entry permit holders under section 118 of the WHS Act. Where a suspected contravention of WHS obligations is identified, permit holders will have the power to require a PCBU to provide reasonable assistance to access and inspect digital work systems relevant to the suspected breach.
In her second reading speech, the Minister identified examples of inspectable items as including code or algorithms, performance metrics, records, data logs and audit trails generated by digital systems.
This provision has drawn criticism from business groups, who have raised concerns about the breadth of access it could provide to internal systems, proprietary algorithms and worker personal information. The Australian Industry Group described the legislation as introducing union interference into the use of AI to manage workload and generate performance metrics.
However, the Act includes several safeguards. A WHS entry permit holder must provide at least 48 hours’ notice before requiring access to a digital work system. The exercise of these powers will be subject to guidelines to be developed by SafeWork NSW following public consultation. The entry provisions will not commence until at least one month after the guidelines are published. Existing protections in the WHS Act, including penalties for the misuse of inspection powers, continue to apply.
Why this matters beyond New South Wales
The Act is NSW-specific legislation and currently applies only to workplaces within that state. However, three factors make this a relevant development for businesses across Australia.
Safe Work Australia’s review. The Act includes a review clause that takes effect if Safe Work Australia amends the model WHS Act to deal with the same subject matter. Safe Work Australia has been tasked with examining whether the national model laws should be updated to address digital work systems. If this proceeds, other states and territories may adopt similar provisions through their own WHS legislation.
Multi-state operations. Businesses with operations or employees in NSW will need to comply with the Act once it commences, regardless of where the business is headquartered. For national employers, maintaining different compliance standards across states creates complexity. Adopting a consistent, national approach to assessing digital work system risks may be more practical than managing separate frameworks.
Regulatory direction. The Act reflects a broader direction of travel in Australian workplace regulation. The focus on psychosocial risks, algorithmic transparency and digital accountability is consistent with themes emerging across federal and state policy settings, including the federal government’s Workplace Gender Equality Agency reporting requirements and ongoing reviews of workplace relations settings.
Practical steps for employers
While the Act’s commencement date has not yet been proclaimed, the underlying obligations align with existing WHS duties that already require businesses to identify and manage workplace risks, including psychosocial hazards. Businesses can take the following steps now:
- Conduct an inventory of digital work systems. Identify all AI, algorithmic and automated tools used in the workplace for rostering, task allocation, performance monitoring, productivity tracking and decision-making. Include systems provided by third-party vendors.
- Assess risks under the existing WHS framework. For each system identified, consider whether its use creates or contributes to psychosocial hazards such as excessive workload, unreasonable performance pressure, constant monitoring or reduced worker autonomy. Document the assessment and any controls in place.
- Review third-party vendor arrangements. Where digital work systems are provided by external suppliers, assess whether the business has sufficient visibility into how the system operates, how decisions are made and what data is collected. The WHS duty sits with the PCBU, regardless of whether the system was developed internally or externally.
- Consult with workers. The WHS framework requires consultation with workers whose health and safety may be affected. Engage with employees who use or are subject to digital work systems to understand their experience and identify risks that may not be apparent from a management perspective.
- Prepare for potential inspections. For NSW-based operations, consider what documentation would be required if a WHS entry permit holder requested access to a digital work system. Ensure that records, data logs and audit trails are accessible and that internal protocols exist for responding to such requests.
- Monitor national developments. Track Safe Work Australia’s review of the model WHS laws and any corresponding developments in other state and territory jurisdictions. Early awareness will allow for a considered response rather than a reactive one.
Positioning for what comes next
The NSW Digital Work Systems Act represents the first specific regulatory framework for AI and digital tools in Australian workplaces. Whether similar provisions are adopted nationally remains to be seen, but the direction of regulatory attention is clear.
For mid-market businesses, the practical takeaway is that the digital tools adopted to improve efficiency and productivity now carry a compliance dimension that requires assessment and documentation within the existing WHS framework. Businesses that begin this work now will be better positioned when the Act commences in NSW and if similar obligations are introduced in other jurisdictions.
How Moore Australia can help
Moore Australia’s HR and Governance and Risk advisory teams work with businesses to navigate the intersection of operational technology, governance and regulatory compliance. We can assist with risk assessments of digital work systems, WHS compliance reviews and the development of governance frameworks that address the obligations arising from this and related legislation.
If you would like to discuss how these changes may affect your business, contact your local Moore Australia adviser.
About the Authors
Stephany Dobbelstein is Director of P&C Consulting at Moore Australia (SA/NT), with over ten years’ experience delivering end-to-end HR solutions across public practice, aged and disability care, and IT professional services. She partners with clients to build high-performing teams, improve business outcomes and manage workplace obligations lawfully. Stephany specialises in HR strategy, employment relations, WHS, and talent acquisition, and is known for driving innovation and embedding sustainable people practices in diverse organisations.
Wilson Tang is Director, Governance and Risk Advisory in Melbourne, supporting clients with internal audit, compliance and risk maturity reviews. With 15+ years’ experience across sectors including government, health and education, he helps align risk appetite with operational efficiency through practical, value-driven recommendations.
