New NSW Laws Put Workplace AI, Tracking and Algorithms Under the Safety Microscope

From AI rostering to productivity dashboards and employee monitoring, new NSW workplace laws will place greater scrutiny on how digital systems affect employee health and safety.

Artificial intelligence, automated rostering, performance metrics and workplace surveillance are becoming everyday business tools. They can improve efficiency, support better decisions and streamline administration but they can also create real workplace risks when poorly designed or applied without appropriate oversight.

Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW), passed by the NSW Parliament in February 2026, is designed to bring employers’ use of digital work systems more clearly within the Work Health and Safety framework.

For businesses, the message is simple: if technology influences how people work, how much they work, how they are monitored or how employment decisions are made, it may now require closer WHS attention.

What is a “digital work system”?

The legislation defines a digital work system broadly.

It includes:

1. Algorithms
2. Artificial intelligence
3. Automation and
4. Online platforms

This means the reforms may apply to systems used for rostering, work allocation, productivity tracking, performance management, employee monitoring, surveillance and AI-assisted employment decisions.

What has commenced and what has not?

Importantly, most of the substantive changes are not yet in effect. At present, the provisions enabling SafeWork NSW to develop Digital Work Systems Guidelines have commenced. The new employer obligations and expanded powers for WHS entry permit holders will commence later, following the publication of those Guidelines.

There has also not yet been a test case examining how the new provisions will operate in practice.

However, employers should not wait for commencement before reviewing their systems. Existing WHS duties already require businesses to manage health and safety risks, including psychosocial risks that may arise from technology-enabled work practices.

What risks will employers need to consider?

Once the substantive provisions commence, employers’ WHS obligations will be expressly extended and clarified in relation to risks arising from digital work systems.

Key areas include:

• Excessive or unreasonable workloads
• Excessive or unreasonable performance metrics and employee tracking
• Excessive or unreasonable employee monitoring or surveillance and
• Unlawful discrimination in automated or technology-assisted decision making.

For example, an automated rostering system that creates unmanageable workloads, or a productivity tool that encourages employees to work at an unsustainable pace, may create WHS concerns. Similarly, AI-assisted recruitment, promotion or performance decisions need safeguards against discriminatory outcomes.

Greater access for union WHS permit holders

The legislation will also give WHS entry permit holders union officials holding a WHS entry permit, a new power to require reasonable assistance to access and inspect digital work systems relevant to a suspected WHS breach.

This may create practical challenges for employers, particularly where systems contain confidential employee information, commercially sensitive material or valuable intellectual property. Businesses will need to be ready to meet their legal obligations while protecting legitimate confidentiality, privacy and security interests.

What should employers do now?

Preparation is the best response. Employers should:

• Audit the digital systems used across the business
• Identify whether those systems affect workloads, monitoring, performance expectations or workplace decision-making
• Assess relevant physical, psychosocial and discrimination risks
• Review policies, procedures and governance responsibilities
• Consult employees when introducing or changing systems that may affect health and safety
• Maintain records of risk assessments, decisions and controls; and
• Develop a process for responding to possible access requests while protecting confidential, personal and commercially sensitive information.

Need help preparing your business?

Digital workplace systems are evolving quickly and so are the legal and people risks that come with them.

PerformHR can help you audit your current systems, assess WHS and employee-relations risks, update policies and prepare your leaders for the changes ahead.

Contact the PerformHR team for a confidential conversation today on 1300 406 005 or email info@performhr.com.au.

This article is general in nature and does not constitute legal advice.
PerformHR recommends seeking specific legal counsel.