By James Stevens, Director and Solicitor, Go To Court Lawyers. Last reviewed 14 April 2026.
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In February 2026, the New South Wales government passed the Work Health and Safety Amendment (Digital Work Systems) Act 2026. This groundbreaking act makes significant changes to the state's work health and safety system, in response to the increasing use of AI as part of business systems. As digital technologies become more prevalent in Australian workplaces, this legislation represents a crucial step in protecting worker rights and safety in the digital age. This page outlines the changes and their implications for NSW employers and workers.
Legislation
The Work Health and Safety Amendment (Digital Work Systems) Act 2026 makes changes to the Work Health and Safety Act 2011. This amending legislation builds upon existing workplace safety frameworks while introducing specific provisions for digital workplace technologies. The amendments align with NSW's broader digital transformation agenda and respond to growing concerns about algorithmic management in modern workplaces.
The legislation was developed following extensive consultation with industry bodies, unions, and workplace safety experts. It reflects the government's commitment to ensuring that technological advancement doesn't come at the expense of worker wellbeing and safety standards.
What are digital work systems?
Definition and scope
The legislation defines digital work systems as including the following:
- Artificial intelligence
- Algorithms
- Automation
- Online platforms
Examples in practice
Digital work systems encompass a wide range of technologies commonly used in contemporary workplaces. These may include AI-powered scheduling software, automated performance monitoring tools, algorithmic task allocation systems, and digital platforms that manage gig economy workers. The definition is intentionally broad to capture emerging technologies and prevent regulatory gaps as digital workplace tools continue to evolve.
Common examples include ride-sharing platforms that assign jobs to drivers, warehouse management systems that set picking targets, customer service software that monitors call center productivity, and AI recruitment tools that screen job applications.
Duty of care
New section 21A requirements
The amending legislation creates a digital work system duty as section 21A. This duty requires persons conducting a business or undertaking (PCBUs) to ensure, so far as reasonably practicable that the health and safety of a worker is not put at risk from the allocation of work by a digital work system used by the business or undertaking.
Specific risk factors
PCBUs must consider whether the allocation of work through digital work systems gives rise to any of the following risks:
- excessive or unreasonable workloads
- excessive or unreasonable metrics to assess and track
- performance
- excessive or unreasonable monitoring or surveillance
- unlawful discriminatory practice
It is worth noting that this duty extends only to workers and not to risks that may be caused to other persons who come into contact with digital work systems. The duty requires ongoing assessment and management of these risks, not just one-time compliance checks.
Additional investigator powers
Enhanced access rights
The changes also give additional powers to workplace health and safety investigators (union officials), allowing them to access digital work systems when investigating possible breaches. PCBUs must provide investigators with reasonable assistance to access and assess digital work systems relevant to suspected breaches.
Compliance obligations
These enhanced powers include the right to inspect algorithms, review automated decision-making processes, and examine data used in digital work systems. PCBUs cannot refuse access based on commercial confidentiality concerns, though reasonable procedures may be established to protect sensitive business information while ensuring investigator access.
Penalties and enforcement
Financial penalties
Breaches of the new digital work system duty carry significant penalties under the NSW work health and safety framework. Category 1 offenses can result in fines up to $3 million for corporations and $600,000 for individuals, along with potential imprisonment for serious breaches involving reckless conduct.
Enforcement mechanisms
SafeWork NSW has been granted additional resources and training to enforce these new provisions. The regulator can issue improvement notices, prohibition notices, and undertake prosecutions for breaches of digital work system duties. The enforcement approach emphasizes education and compliance support, particularly during the initial implementation period.
Compliance strategies for employers
Risk assessment frameworks
Employers should develop comprehensive risk assessment procedures specifically for digital work systems. This includes regular auditing of AI algorithms for bias, monitoring workload distribution patterns, and establishing feedback mechanisms for workers to report concerns about digital systems.
Documentation and record keeping
PCBUs must maintain detailed records of their digital work system assessments, including documentation of risk mitigation strategies, worker consultation processes, and system modifications made to address safety concerns. These records will be crucial for demonstrating compliance during investigations or audits.
Implications of these changes
The changes to the work health and safety act 2011 have a number of implications for how businesses will be required to operate.
PCBUs will now be required to ensure that digital work systems do not pose risks to worker health and safety. They must also explicitly address risks stemming from digital work systems when conducting risk assessments. This includes potential bias in automated decision-making, and psychological harm.
PCBUs will also be required to ensure that AI-enabled HR systems do not result in unreasonable work demands or result in discrimination. This may require significant investment in system auditing, worker training, and ongoing monitoring processes. Companies may need to engage specialist consultants to assess their digital systems and ensure compliance with the new requirements.
Community responses
The changes have been met with mixed responses.
Unions have welcomed the changes as a necessary update to safety regulation. Other supporters of the amendments have said that they represent a recognition that digital work systems involve real risks to workers, and that the legislation gives workers more oversight and a voice in how these systems are used.
Industry and employer groups have been broadly critical of the laws, saying the changes place unwarranted and uncertain compliance burdens on PCBUs. Critics have also argued that the regulations are an overreach and have the potential to decrease productivity and increase the risk of litigation.
Analysts have noted that New South Wales is the first Australian jurisdiction to explicitly legislate for the risks posed by digital workplace systems and that this is a major shift in workplace governance.
It has been noted that the new investigator powers also pose privacy and confidentiality issues to certain types of businesses. For example, law firms will be required to provide union officials with access to digital work systems that contain confidential information about their clients.
The changes will be subject to a statutory review after they have been in force for 12 months.
Frequently
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Frequently Asked Questions
What specific penalties do employers face for breaching digital work systems obligations under NSW law?
The Work Health and Safety Amendment (Digital Work Systems) Act 2026 establishes penalties for non-compliance, though specific penalty amounts depend on the severity of the breach. Employers may face fines, prosecution, and potential civil liability for workplace injuries or harm caused by inadequate digital work system management. The penalties align with existing WHS enforcement mechanisms but specifically address digital workplace violations.
How do NSW digital work systems laws differ from other Australian states' workplace technology regulations?
NSW is the first Australian state to introduce comprehensive digital work systems legislation specifically addressing AI and algorithmic management in workplaces. While other states rely on general work health and safety laws, NSW's 2026 amendments create specific obligations for digital workplace technologies. This makes NSW employers subject to more detailed compliance requirements than their interstate counterparts regarding AI and automated systems.
What does it cost to get legal advice about digital work systems compliance in NSW?
Go To Court Lawyers offers initial consultations for digital work systems compliance matters for a fixed fee of $295. This consultation covers your specific obligations under the new NSW legislation, compliance strategies, and risk assessment. Additional legal services for policy development, training programs, or dispute resolution are quoted separately based on your business needs and complexity of requirements.
How can a lawyer help my business comply with NSW digital work systems laws?
A lawyer can conduct compliance audits of your existing digital systems, develop policies and procedures meeting the new legislative requirements, and provide staff training on legal obligations. We can also review contracts with technology vendors, assess risk management frameworks, draft incident response procedures, and represent you in any regulatory investigations or disputes arising from digital work system operations.
When do NSW employers need to comply with the new digital work systems laws?
The Work Health and Safety Amendment (Digital Work Systems) Act 2026 takes effect from February 2026, giving employers limited time to ensure compliance. Businesses using AI, algorithms, automation, or online platforms must immediately begin implementing required systems and training. Delaying compliance preparation could result in penalties once the legislation commences, making urgent legal advice essential for affected employers.
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