NSW passes controversial Digital Work Systems Bill amid warnings from safety experts

New South Wales Parliament has passed the Work Health and Safety Amendment (Digital Work Systems) Bill, in a closely contested vote that has major implications for HR and WHS leaders across the state.

The Bill, which was approved 20 votes to 17, introduces a new “Digital Work System Duty” aimed at ensuring algorithms, AI tools and digital platforms used to allocate, monitor or pace work do not jeopardise worker safety.

However, the Australian Institute of Health and Safety (AIHS) has warned the laws are fundamentally misdirected – and could increase compliance burden for employers without meaningfully improving safety outcomes.

What the new laws are trying to do

At its core, the Bill seeks to modernise NSW work health and safety (WHS) laws for technology-enabled workplaces by requiring employers to assess and manage risks associated with digital systems that influence how work is organised.

These systems might include AI-driven scheduling and rostering platforms, logistics optimisation tools, automated performance monitoring dashboards, and digital workflows in clinical or customer service environments.

The intent, on paper, is to ensure that when digital tools affect workload, pacing, supervision or autonomy, employers have a legal obligation to consider and control the resulting health and safety risks – including psychosocial risks such as stress, fatigue and loss of control over work.

“Well-intentioned but fundamentally flawed”

The AIHS said it supports stronger protections for workers in digital environments, but argues the Bill is built on the wrong foundation.

AIHS chair Celia Antonovsky said the legislation is “well-intentioned” but “fundamentally flawed” because it treats digital systems as a unique hazard, rather than focusing on the underlying work design and organisational drivers that create risk.

“The AIHS supports protecting workers from modern workplace pressures but if a driver is fatigued due to an unachievable target, the risk is identical whether that target was set and monitored by their manager or an algorithm,” Antonovsky said.

“What the Bill fails to do is recognise risks such as fatigue and psychological injury remain constant whether a task is assigned by a human or machine.”

Rather than regulating specific tools, the AIHS argues WHS laws should continue to focus on good work design – the way tasks, roles, supervision and workloads are structured – with digital systems treated as one component in a broader work system.

Antonovsky likened the current approach to “introducing a standalone law that governs the use of hammers in workshops”. A hammer is not inherently unsafe – the risk comes from how work is designed, supervised and paced, and the competency of the person using it. The same, she said, is true of digital tools.

Concerns over national consistency and rushed design

The AIHS has also raised alarms about the Bill’s departure from the national Model WHS Laws, which are built around general duties to identify and manage all risks, rather than singling out specific technologies.

According to AIHS, the NSW Bill focuses on the technology rather than the overall work system in which it operates and risks creating regulatory inconsistency between NSW and other jurisdictions.

This may fragment compliance processes and create confusion around overlapping duties and could foster a false sense of security that compliance with digital-system rules equals overall WHS assurance.

Antonovsky said the legislation appears to have been advanced without sufficient consultation with WHS professionals, HR leaders, or industry stakeholders across sectors that rely heavily on digital tools.

“We are urging the NSW Government to extend consultation and work with the AIHS and WHS experts prior to developing any further guidance material to harmonise with national standards and ensure it is evidence based,” she said.

Why HR leaders need to pay close attention

For HR leaders and people managers in NSW, the passage of the Bill creates a new layer of complexity on top of existing WHS duties, particularly in relation to psychosocial risk.

One immediate challenge is a new compliance burden without a clear guarantee of risk reduction. The Bill introduces obligations that are highly specific yet broadly defined, meaning HR and WHS teams may initially struggle to identify which digital systems fall within the scope of the new duty, what documentation will be required to demonstrate compliance, and how best to respond to expanded inspection and information‑gathering powers.

The danger is that employers will face more audits, documentation requirements, policy work and system reviews without a proportional improvement in hazard control or worker wellbeing.

There is also a real risk that attention will be pulled away from core psychosocial hazards. Psychosocial risks such as workload, autonomy, job clarity, role conflict and organisational support are now central to WHS expectations, and they generally stem from structural and cultural drivers like targets, staffing levels, leadership behaviours and job design rather than from the technology itself.

By elevating digital systems as a distinct regulatory category, the Bill could unintentionally shift focus away from those deeper organisational settings that most strongly influence mental health and wellbeing at work.

Finally, the operational impacts remain uncertain across industries where digital work systems are already deeply embedded. In sectors such as logistics and warehousing, healthcare, retail, professional services and contact centres, employers rely on a wide array of rapidly evolving digital tools.

With limited sector‑wide consultation to date, many organisations – particularly those with complex technical environments or limited in‑house WHS expertise – are unsure how the law will apply in practice or what adjustments will ultimately be required.

What the AIHS wants changed

The AIHS is not seeking to have the Bill abandoned but rather reshaped around evidence-based WHS principles and robust consultation. It is calling for structured engagement with WHS professionals so that any new requirements align with the Model WHS Laws, reinforce core risk‑management principles and draw on expert understanding of psychosocial hazards and prevention.

The Institute also wants broader industry engagement so employers and industry bodies across different sectors can explain how digital systems actually operate in real workplaces. This would help avoid overly narrow or overly broad definitions that become unworkable or quickly outdated as technology shifts.

Equally important is the establishment of formal mechanisms to hear directly from workers and Health and Safety Representatives (HSRs). Their experience is critical to identifying unintended consequences, “invisible” and cumulative risks, and the ways in which digital systems interact with existing physical and psychosocial hazards.

Practical steps HR and WHS leaders can take now

Despite the uncertainty, organisations do not need to wait for further regulatory guidance before improving their approach to digital‑era work design. The existing foundations of WHS risk management already apply to digital systems and should be used proactively.

For HR leaders, the first priority is to treat digital systems as part of standard risk assessment, rather than as something separate. Digital tools should be examined in the same way as any other workplace hazard: by consulting the workers who use or are affected by them, mapping tasks and workflows, understanding the context in which the system operates, and evaluating both physical and psychosocial risks, including workload, pacing, autonomy and levels of support. Worker insights are essential for uncovering unintended consequences, friction points and less visible risks that may not appear in system documentation.

Once risks are identified, organisations should use job design and job crafting principles to manage them. This may involve adjusting tasks, responsibilities or workflows, setting clear expectations about how digital systems are to be used, ensuring workloads and pacing remain realistic, and giving employees a degree of influence over how technology shapes their roles. Digital tools, in other words, do not create risk in isolation; the risk arises from how they are embedded into the organisation’s work design.

HR leaders should also focus on building continuous feedback loops. Because technology and its impacts change rapidly, it is vital to have regular check‑ins with workers and teams using digital systems, to monitor workload trends, performance data and system behaviour, to encourage early reporting of issues without fear of blame, and to refine system settings, policies and workflows as new issues emerge. This helps organisations avoid a “set and forget” mentality in a highly dynamic environment.

Strengthening organisational capability and governance is another critical step. A digital system itself does not harm workers; the surrounding leadership decisions, policies and culture do. Organisations can reduce risk by engaging suitably qualified WHS professionals for guidance, educating leaders about how psychosocial risks arise in digital environments, aligning technology investment and configuration decisions with WHS principles, and clarifying who is accountable for safe system design and safe system use.

Finally, work design needs to remain flexible as digital tools evolve. Processes should be designed so they can be adjusted without major disruption, digital systems should be reviewed regularly against changing business and workforce needs, and there must be ongoing alignment between system functionality and safe, sustainable work design. This adaptability will be essential for keeping pace with both technological change and any further regulatory refinements.

A big change for HR

The passage of the Work Health and Safety Amendment (Digital Work Systems) Bill marks a significant shift in NSW’s regulatory landscape.

For HR leaders, the imperative is twofold: understand the emerging compliance expectations around digital work systems – and, more importantly, stay anchored in the fundamentals of good work design, psychosocial risk management and genuine worker consultation.

As Antonovsky noted, everyone – regardless of industry – has the right to go to work and go home safely. The challenge now for HR and WHS leaders in NSW is to ensure that digital transformation supports that goal, rather than obscuring it behind a new layer of regulation.