Artificial Intelligence is no longer just a future consideration for businesses. It is already being used across recruitment, rostering, performance tracking, and operations.
Now, the NSW Government is stepping in to regulate it.
The recent changes to the Work Health and Safety Act 2011 (NSW) under the Work Health and Safety Amendment (Digital Work Systems) Bill 2026 mark a major shift in how businesses must approach AI, automation, and data-driven systems in the workplace.
For employers, particularly those in labour hire, manufacturing, and industrial sectors, this is something you cannot afford to overlook.
What Has Actually Changed?
The new legislation formally recognises AI and digital systems as workplace risks that must be actively managed.
A digital work system now includes:
- Artificial intelligence tools
- Algorithms
- Automation systems
- Online platforms used in operations or workforce management
This means if your business uses:
- Automated rostering
- Productivity tracking software
- Recruitment screening tools
- Performance monitoring systems
You now have a clear legal obligation to assess and manage the risks associated with them.
New Employer Responsibilities
AI is Now Part of Your Duty of Care. Under updated WHS laws, employers must ensure workers are not exposed to risks arising from digital systems. The key difference now is that AI is specifically called out in legislation.
New Rules Around AI Allocating Work
One of the most important additions is a new duty focused on how AI assigns work. If your systems are allocating shifts, tasks, or measuring output, you must consider whether they create:
- Excessive workloads
- Unrealistic performance metrics
- Over-monitoring or surveillance
- Discriminatory decision-making
This directly impacts industries using:
- Automated scheduling systems
- KPI tracking platforms
- Warehouse and logistics software
- Labour hire allocation tools
Increased Scrutiny from Regulators
With AI now specifically legislated, expect:
- More attention from SafeWork NSW
- Greater scrutiny during audits
- Higher expectations around documentation and risk assessments
This is not theoretical. Regulators now have a clear framework to enforce against.
When Do These Changes Start?
Important point: the laws have passed but are not yet fully in force.
- Core duties will commence once officially proclaimed
- Inspection powers will follow after guidelines are released
- There will be a short lead-in period before enforcement begins
That said, waiting is a mistake. Businesses should already be preparing.
What This Means for Your Business
This legislation is a clear signal:
AI is no longer just an efficiency tool — it is a workplace risk.
For employers, this means:
- You must understand how your systems make decisions
- You must assess how they impact workers
- You must be able to justify those decisions if questioned
If you cannot explain how your system allocates work or evaluates performance, you are exposed.