The New South Wales (NSW) government in Australia has introduced the Work Health and Safety Amendment (Digital Work Systems) Bill into the state parliament, aiming to make NSW the first jurisdiction in the country to explicitly hold employers responsible under work safety law for harms caused by artificial intelligence, algorithms, automation, online platforms and other “digital work systems” used in the workplace. Under the proposed changes to the Work Health and Safety Act 2011, a “digital work system” — defined to include AI tools — would be treated as a specific workplace hazard that a business must design, monitor and control “so far as is reasonably practicable” to prevent excessive workloads, unreasonable performance metrics, intrusive surveillance or discriminatory outcomes for workers. The bill would also expand rights for safety inspectors to inspect digital systems, with fines for employers that refuse access. Supporters, including unions, say the reforms modernize safety protections to keep pace with technology, but business groups have voiced concerns that the obligations could create regulatory burdens and uncertainty for employers. The bill has advanced through legislative stages but still faces debate before becoming law. Full legislative text and detailed provisions are still subject to parliamentary amendment and negotiation.
Sources
https://www.smartcompany.com.au/artificial-intelligence/ai-nsw-workplace-oversight-law-business-explainer/
https://www.dlapiper.com/knowledge/insights/2025/08/new-south-wales-plans-to-introduce-new-limitations-on-the-use-of-ai-in-the-workplace
https://www.lexology.com/library/detail.aspx?g=23db6fa3-2561-4483-8f03-d8f77c8a79b3
Key Takeaways
• NSW is proposing to amend work safety law to treat AI and other digital systems as workplace hazards that employers must manage.
• Employers could face legal obligations to prevent excessive workloads, intrusive monitoring, unfair performance metrics and algorithmic discrimination tied to digital work systems.
• Business groups oppose parts of the bill, arguing the reforms may create new regulatory complexity and compliance costs.
In-Depth
New South Wales is taking a pioneering regulatory step by bringing artificial intelligence and related digital tools under the umbrella of workplace health and safety obligations, signaling a shift in how modern labour regulations respond to rapid technological adoption. The core of the proposed reform is the Work Health and Safety Amendment (Digital Work Systems) Bill, which would update the existing Work Health and Safety Act 2011 so that employers are not only responsible for traditional physical hazards, but also for harms arising from algorithms, AI-driven scheduling systems, automated performance tracking and other digital platforms that increasingly shape the work experience for employees. The bill’s definition of a “digital work system” is broad, encompassing any algorithm, automation tool or online platform that allocates work duties, monitors output or influences workplace decisions — tools that are now common across many industries.
Under the proposed framework, businesses — referred to in the legislation as ‘persons conducting a business or undertaking’ (PCBUs) — must proactively assess whether their use of digital systems could lead to risks to worker health and safety. Specific risks called out include excessive or unreasonable workloads that push employees beyond safe limits, performance metrics that create undue stress or are unrealistic, surveillance practices that intrude on privacy or morale, and discriminatory outcomes where certain categories of workers might be disadvantaged by automated decision-making. This is a notable expansion of traditional safety law, which has historically focused on physical health hazards, by explicitly incorporating psychological and technological risks into statutory duties.
The bill would also strengthen the powers of workplace safety inspectors. Individuals holding work health and safety entry permits could request reasonable assistance to inspect digital systems — with fines imposed on employers who refuse access without valid legal grounds. This element underscores the government’s intent to ensure transparency and accountability in how data-driven systems are used in workplaces.
Unions and worker advocates praise the reforms as necessary to prevent dehumanizing impacts of unchecked technology, arguing that existing laws lag behind the realities of modern work where digital platforms increasingly dictate job roles, hours and evaluations. They contend that codifying responsibilities will protect vulnerable workers from exploitative practices and unfair algorithmic decisions.
However, employer groups and business stakeholders have expressed reservations, warning that the proposed obligations could introduce significant regulatory uncertainty and compliance costs. They argue that the broad language around what constitutes “unreasonable” workloads or “excessive” monitoring leaves employers exposed to litigation or enforcement actions for subjective criteria. Some also warn that the reforms could deter investment or innovation if companies face unpredictable liabilities tied to the use of digital tools.
The bill’s progress through the NSW legislature has been watched closely, with debates highlighting the tension between worker protections and business flexibility. While the proposed legislation has advanced to later stages of parliamentary consideration, it remains subject to potential amendments as lawmakers balance competing interests.
If enacted, NSW’s approach could influence other Australian states and even national debate on how to regulate AI and digital systems in the workplace, raising important questions about the future role of government in overseeing technology-driven labour management. Employers doing business in NSW and beyond should monitor developments, assess their current use of digital work systems and be prepared to adapt compliance frameworks to meet emerging legal duties.