NSW Just Passed a Law on AI at Work. Here’s What Your Business Needs to Know.

NSW has become the first state in Australia to put specific legal duties on employers for how algorithms and AI allocate work. If you use rostering software, delivery apps, task-allocation tools or any system that assigns work automatically, this one’s for you.

What actually happened?

On 12 February 2026, the NSW Parliament passed the Work Health and Safety Amendment (Digital Work Systems) Act 2026, amending the Work Health and Safety Act 2011 (NSW). It commenced from 18 February 2026, making NSW the first Australian jurisdiction to regulate how digital systems allocate work.

In plain English: if you use software, an app, an algorithm or any form of automation to decide who does what work, when, and how much of it, you now have a specific legal duty to make sure that system isn’t putting your people at risk.

What is a “digital work system”?

The Act defines it broadly as an algorithm, artificial intelligence, automation or online platform. That’s a wide net. It captures:

• Rostering and scheduling software
• Gig economy and delivery platforms
• Automated task allocation tools
• AI-driven performance monitoring or productivity tracking
• Any system that assigns, paces or monitors work without a human making the call each time

If you’re not in the gig economy, don’t switch off. Plenty of ordinary SME tools, from job-dispatch software to call-routing systems, fall into this definition.

What do employers actually have to do?

The Act inserts a new primary duty (section 21A) requiring a PCBU (person conducting a business or undertaking) to ensure, so far as is reasonably practicable, that the allocation of work by a digital work system does not put a worker’s health and safety at risk. Specifically, employers must consider whether the system creates or risks creating:

• Excessive or unnecessary workloads
• Unreasonable time pressure
• Reduced human oversight or contact
• Psychosocial harm from constant monitoring or opaque decision-making

There’s also a second change. WHS entry permit holders (typically union officials) now have expanded rights to require access to inspect a digital work system where they suspect a breach.

Why this matters even if you’re not in NSW

Two reasons. First, if you employ anyone in NSW, the duty applies to you regardless of where your head office sits. Second, this is very likely the first mover, not the last. Other states are watching this closely, and Safe Work Australia is already working on national WHS harmonisation. What starts in NSW rarely stays in NSW.

What should you do now?

The reforms commence on a date yet to be proclaimed, so you’ve got a runway. Use it. Here’s where to start:

• List every system in your business that allocates, paces or monitors work automatically, not just the obvious ones
• Ask whether any of those systems could be driving unreasonable workloads or unrealistic timeframes
• Check whether workers have a real, accessible way to flag a problem with how work is being allocated
• Build human oversight into the process. A system that runs with zero human checkpoints is now a real risk
• Get ahead of it in your WHS risk register before an inspector or union rep asks about it

FAQs

Does this law apply outside NSW?

The duty applies to any PCBU with workers in NSW, regardless of where the business is headquartered. Other states haven’t legislated the same duty yet, but the direction of travel is clear.

When does the Act actually take effect?

The Act commenced from 18 February 2026, per the official legislation register. Some provisions may be proclaimed on a later date, so check current guidance from SafeWork NSW before assuming full commencement.

What counts as a “digital work system”?

Anything using an algorithm, AI, automation or an online platform to allocate, monitor or manage work. That covers rostering tools, delivery and gig platforms, dispatch software and automated productivity monitoring.

What happens if we don’t comply?

It sits within the WHS Act’s existing primary duty of care, so the usual WHS enforcement and penalty framework applies. Non-compliance is treated the same as any other breach of the primary duty of care.

Do we need to let unions inspect our AI systems?

WHS entry permit holders now have expanded rights to require reasonable assistance to access and inspect a digital work system where they suspect it’s contributing to a WHS contravention. This isn’t unlimited access on demand, but the right has been broadened.

The bottom line

This law puts a legal spotlight on something a lot of businesses have never thought about as a safety issue: the software quietly deciding who does what, when. If a digital system is running your rosters or your workflow, someone in your business needs to own the risk, not just the tech.

We work with employers to translate laws like this into practical, workable action, not just compliance theatre. If you want a hand mapping your risk here, get in touch.