New South Wales has become the first Australian jurisdiction to explicitly regulate artificial intelligence, algorithms and automated platforms as workplace health and safety hazards — a development that signals a broader shift in how WHS law will apply in an increasingly automated world of work.
The Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW), passed by the NSW Parliament in February 2026, amends the Work Health and Safety Act 2011 (NSW) to introduce a new category of regulated hazard: digital work systems.
What is a “digital work system”?
The Act defines digital work systems broadly, capturing artificial intelligence and machine learning tools, algorithms and automated decision-making platforms, online platforms used to manage, allocate or monitor work, and automated rostering, performance management, and task allocation systems. The common thread is that these are systems — whether controlled directly by the employer or provided by a third-party vendor — that influence how work is allocated, performed, or monitored.
The new duty
Under the Act, PCBUs are now expressly required to ensure that the use of digital work systems does not put workers’ health and safety at risk. Practically, that means assessing whether digital systems create or amplify psychosocial hazards including unreasonable workloads or sustained high cognitive demand, reduced worker autonomy or control, excessive or intrusive monitoring and surveillance, algorithmic performance targets that are unpredictable or impossible to challenge, and discriminatory outcomes that may harm workers’ psychological safety.
Critically, employers can no longer rely on the fact that a system is automated, or was designed or supplied by a third party, to avoid WHS responsibility. If the algorithm sets an impossible workload, the legal duty rests with the employer — not the software provider.
Why this matters
The types of digital systems captured by the Act are already in widespread use across Australian workplaces. Gig economy platforms that allocate delivery runs, warehouse management systems that set pick-rate targets, AI scheduling tools in healthcare and retail, and algorithmic performance monitoring in call centres and logistics — all of these now fall within the scope of WHS obligations in NSW.
Legal commentators from firms including DLA Piper, PwC, Colin Biggers & Paisley, and King & Wood Mallesons have described the Act as a significant expansion of the WHS regulatory landscape — and a signal of the direction that other jurisdictions are likely to follow.
Psychosocial hazards in the spotlight
The timing of the Digital Work Systems Act is not coincidental. It follows the introduction of psychosocial health regulations across multiple Australian jurisdictions in recent years — including Victoria’s Psychosocial Health Regulations, which came into force on 1 December 2025. NSW is now the first Australian state to make the links between algorithmic management and psychological harm legally actionable under WHS law.
What employers should do now
Organisations using AI, automated rostering, algorithmic performance tools, or gig platform structures should undertake a review of those systems through a WHS lens — assessing whether the system’s operation creates risks of psychosocial harm and what controls are in place. That assessment should be documented, updated regularly, and integrated into the organisation’s broader WHS risk management processes. While the Act currently applies only in NSW, legal observers expect it to influence reform discussions in other jurisdictions.
