Last Updated on 17/09/2026 by Damin Murdock
The use of AI in the workplace is increasingly becoming a work health and safety issue for businesses in New South Wales. In 2026, NSW enacted the Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW), introducing reforms that expressly address risks arising from artificial intelligence, algorithms, automation and online platforms used at work. While the substantive reforms are subject to staged commencement, they signal an important change for businesses using digital systems to allocate, monitor or manage work.
For employers using AI and automated workplace technology, the reforms highlight the need to consider not only productivity and efficiency, but also whether digital work systems may create risks to workers’ physical or psychological health and safety.
What are Digital Work Systems?
The law gives these systems a broad definition to reflect how tech is changing the way people work today. You are now operating under specific regulatory oversight if your business uses any of the following:
- Software that automatically assigns tasks, sets deadlines, or determines work routes. This isn’t just about “gig economy” delivery apps anymore. It also includes warehouse management systems, field service dispatch tools, and even project management software for white-collar workers.
- Tools that track keystrokes, “active hours,” or physical movement via wearables and GPS. Under the new laws, “constant surveillance” without a clear safety justification can be classified as a psychosocial hazard.
- Systems that rank employees, determine bonuses, or trigger disciplinary actions based on data. The “black box” of AI decision-making must now be transparent to the workers it affects.
The WHS Connection: Psychosocial Hazards
The main point of this change is that digital management can pose unique health and safety risks. “Algorithmic pacing,” which means a machine sets a work pace that a person can’t keep up with for long periods, is now officially recognised as a cause of workplace injuries.
Under the updated Act, employers have a positive duty to:
- You must assess whether your digital work systems increase the risk of fatigue, stress, or burnout.
- Employees must be consulted on how these systems are implemented and used to monitor their performance.
- Workers have a right to know how the “algorithm” is scoring them and what data is being used to make decisions about their employment.
The “Right to Human Oversight”
The requirement for meaningful human oversight is a major change in the 2026 amendments. Automated systems can’t be the only ones who decide what happens to an employee. A human manager who has the authority to override the algorithm’s recommendation must oversee important decisions such as firing, demoting, or taking major disciplinary action.
What This Means for Employers and Tech Vendors
If you are a business owner or a developer of HR/management software, the following steps are now essential:
- Identify every piece of software that “manages” or “monitors” staff. Determine if it falls under the new definitions.
- Ensure that employment agreements and independent contractor agreements clearly outline the use of digital work systems.
- If an algorithm sets a delivery route or a picking quota, is that quota realistic? Can a human override it if there is a safety concern (e.g., extreme weather or traffic)?
Navigating the Intersection of Tech and Law
The 2026 amendments to the WHS and Corporations Acts create a complex web of responsibilities. For businesses, the challenge lies in leveraging the efficiency of AI while maintaining the “Human-in-the-Loop” standards required by law.
Need expert legal advice? Feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube, LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google Review.
DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article, and if you require specific legal advice, please contact us.
Damin Murdock (J.D | LL.M | BACS - Finance) has over 17 years of experience as a commercial lawyer. He helps businesses navigate construction and technology law. Damin has held several big leadership roles, including serving as a director of a national law firm and the Chief Legal Officer for Lawpath.
He has personally helped more than 2,000 startups and small businesses. With over 300 five-star reviews, his clients clearly value his practical advice and simple way of explaining things. Damin has also hosted over 100 webinars that thousands of people have watched to get reliable legal help.
