In Part 1 of this series, we looked at a real case: two NSW businesses fined $590,000 after a worker fell through a skylight during routine maintenance. The failures were largely about paperwork — missing inductions, no system of work, no recorded risk assessments.
That incident happened in 2021. The fine came in 2026. And in the years between, the regulatory environment your business is operating in has changed significantly.
In February 2026, NSW became the first Australian jurisdiction to pass a law that explicitly brings artificial intelligence, algorithms, automation and online platforms into the scope of workplace health and safety obligations. [1]
If you use software to allocate shifts, manage rosters, or monitor worker performance — that software is now part of your WHS obligations. Most businesses haven’t started thinking about what that means.
What the NSW Digital Work Systems Act actually says
The Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW) changes things in two meaningful ways.
First, it extends an employer’s existing duty of care to explicitly include digital work systems — defined broadly as any algorithm, artificial intelligence, automation or online platform used in the business. If your business uses it to manage work, you’re responsible for ensuring it doesn’t put workers’ health and safety at risk. [2]
Second, it introduces a specific new duty — section 21A — requiring businesses to ensure that work allocated by a digital system doesn’t create health and safety risks for workers. This directly captures automated rostering platforms, AI scheduling tools, gig economy apps, and performance monitoring software. [3]
There’s also a third change. Union permit holders can now enter a workplace and inspect digital work systems where a WHS breach is suspected. Your rostering software, monitoring tools, and AI dashboards are all now subject to that power.
What this means in practice
This law isn’t trying to prevent businesses from using technology. It isn’t banning AI tools or automated rostering. What it’s doing is applying the same compliance logic that already governs physical hazards — identify the risk, assess it, control it, document what you’ve done — to the digital systems that shape how work gets done.
The parallel with Part 1 of this Series is direct. In that case, a business sent workers onto a roof without a documented system of work, without a risk assessment, and without checking available guidance. The same principle now applies to your digital tools.
If your automated rostering system schedules workers for back-to-back overnight shifts, that’s a psychosocial hazard — fatigue, stress, impaired decision-making. If your performance monitoring tool creates unrealistic output targets, that’s a psychosocial risk. If your platform allocates work without any human review of whether workloads are reasonable, you’re expected to have assessed that and documented your controls.
The legislation doesn’t require you to log every algorithm decision. It requires you to understand where your digital systems create risk and show that you’ve managed it.
Psychosocial hazards: the workforce compliance obligation most businesses are still catching up on
The Digital Work Systems Act sits inside a broader shift in Australian WHS regulation that’s been building since 2022 and is now fully in force across every state and territory.
As of December 2025, all Australian employers have enforceable obligations to actively identify, assess and control psychosocial hazards at work. [4] These aren’t soft HR considerations. They carry the same penalties as physical safety breaches — up to $20.4 million for corporations in the most serious cases. [5]
Psychosocial hazards include chronic overwork, poorly managed change, unclear role expectations, lack of support, and bullying. They also now explicitly include intrusive surveillance — keystroke monitoring, camera checks, activity trackers — introduced during COVID and never reviewed.
The practical implication is clear: your induction documents, systems of work, and risk assessments now need to cover digital and psychosocial risks alongside physical ones. The checklist has gotten longer, and ‘we’ve thought about it’ is no longer enough.
The documentation logic is the same — the scope has expanded
If the solar panel case taught us one thing, it’s that documentation isn’t bureaucracy. It’s the evidence that you identified a risk, assessed it, and put controls in place. Without it, your legal exposure is significant and your ability to defend it is limited.
The Digital Work Systems Act extends that logic to your technology stack. In practice, that means:
- Audit your digital work systems. List every platform, algorithm or automation your business uses to allocate, schedule, monitor or manage work. That’s your starting inventory.
- Assess the risks they create. For each system: does it create workload pressure? Does it monitor workers in ways that cause stress? Does it make decisions about people without adequate human oversight? Document your assessment.
- Implement controls and document them. Controls might be technical (caps on automated shift lengths), procedural (human review of AI-generated rosters), or policy-based (clear surveillance guidelines). Record who’s responsible and when each was last reviewed.
- Include digital risks in your inductions. Just as the businesses we looked at in Part 1 of this series should have included roof work in their inductions, your onboarding processes should address how digital systems affect workers’ health and safety.
- Keep records current. A risk assessment filed away isn’t compliance. The expectation is ongoing review as your tools and the regulatory guidance evolve. Research shows 35% of Australian businesses struggle to stay on top of recurring requirements. [6] This is exactly that.
What about businesses outside NSW?
The Digital Work Systems Act is NSW legislation, but compliance professionals are treating it as a national indicator. The psychosocial hazard obligations that underpinned it are already enforceable nationally. Safe Work Australia’s operational plan identifies psychological health and digital risk as national enforcement priorities. [7]
Businesses that build their compliance frameworks now — documenting their digital systems, assessing risks, putting controls in place — will be ahead when this becomes the national standard. Those that wait will be responding reactively. That’s the position the companies in Part 1 found themselves in.
The compliance logic in both parts of this series is the same
One article is about a physical workplace incident. The other is about software. But the questions an investigator or regulator will ask are identical: did you know about the risk, did you assess it, did you put controls in place, and can you prove it?
The businesses that manage this environment well have a centralised system for tracking every compliance obligation — physical, digital, psychosocial — across their entire workforce. Where nothing falls through the cracks. Where documentation exists before anyone asks for it.
That’s what Kinatico Compliance is built to do.
References
[1] NSW Government passes Digital Work Systems Act 2026 — DLA Piper — https://knowledge.dlapiper.com/dlapiperknowledge/globalemploymentlatestdevelopments/2026/New-South-Wales-government-passes-nation-first-work-health-and-safety-obligations-for-digital-work-systems-
[2] NSW Parliament passes Digital Work Systems Bill — Norton Rose Fulbright — https://www.nortonrosefulbright.com/en-au/knowledge/publications/d75c5d28/nsw-parliament-passes-digital-work-systems-bill-what-employers-need-to-know
[3] When Technology Becomes a WHS Risk — PwC Australia — https://www.pwc.com.au/legal/workplace-law/when-technology-becomes-a-whs-risk.html
[4] Psychosocial Hazards at Work — New Employer Obligations in Australia (2025–26) — BlueSafe Online — https://www.bluesafeonline.com.au/resources/compliance-guides/psychosocial-hazards-employer-obligations
[5] Maximum Monetary Penalties Under the WHS Laws — Safe Work Australia — https://www.safeworkaustralia.gov.au/law-and-regulation/legislation/maximum-monetary-penalties-under-whs-laws
[6] Honeycomb Strategy — Kinatico Platform Adoption Research, Topline Report (May 2026) —
[7] Work Health and Safety Legislation Changes in 2026 — Future Advisory — https://futureadvisory.com.au/blog/work-health-safety-changes-to-be-across-in-2026/
This article is for general information only and does not constitute legal advice. For advice specific to your situation, please consult a qualified WHS or employment law professional.
