Psychosocial hazards in a digital age

Digitisation promises to increase productivity, reduce workloads and make everyone's lives easier, but new WHS legislation says it also comes with mental health risks.

In the last five years, Australia has seen major changes to the health and safety regulations relating to workplace mental injuries, and now the message is clear in all states: psychosocial hazards must be treated the same as physical hazards.

As of December 2025, every state and territory in Australia now imposes explicit, enforceable obligations on businesses to identify and manage hazards that may cause psychological harm, and regulators are increasingly willing to act on those obligations.

Now, a major legislative reform in New South Wales is set to reshape compliance expectations once again.

The state become the first jurisdiction in Australia to impose explicit WHS duties on to the use of artificial intelligence, algorithms, automation and online platforms in the workplace, following the assent of the Work Health and Safety Amendment (Digital Work Systems) Bill in February 2026.

How will these new laws interact with current legislation on psychosocial hazards, and what will be the impact on your business in practice.

To find out, we turned to one of our Health & Safety experts – PJRA Senior Consultant, Giorgia McGuigan.

What are psychosocial hazards?

The term ‘psychosocial risk’ has become something of a buzzword, and no doubt you have heard raised in the media and in just about every work health and safety conversation in the last twelve months. Businesses know that they need to eliminate these risks, but the challenge for many is pinning down exactly what a psychosocial hazard looks like in the workplace and then outlining what actionable steps they need to take to manage these risks and ensure their workplace is psychosocially safe.

According to Safe Work Australia[1], a psychosocial hazard is anything that could cause psychosocial harm or harm someone’s mental health. WorkSafe Victoria is a little bit more explicit, it defines psychosocial hazards as factors in the design, carrying out or management of work or work-related interaction that increase the risk of work-related stress and can lead to psychological or physical harm[2].

Some common psychosocial hazards that are specifically identified by regulators in all jurisdictions include:

• Job demands that are either too high or too low
• Low job control
• Poor support
• Poor organisational change management
• Poor organisational justice
• Low or inadequate recognition and reward
• Low or a lack of role clarity
• Conflict or poor workplace relationships
• Poor environmental conditions
• Remote or isolated work
• Violence, aggression and traumatic events or materials
• Workplace bullying, harassment (including sexual harassment) and discrimination

In the Commonwealth jurisdiction, Comcare has also specifically identified three more hazards: fatigue, job insecurity and intrusive surveillance. 

Another key aspect that businesses need to consider is that psychosocial hazards rarely exist in isolation, and risk management needs take into account how hazards can combine to create new, changed or higher risks[3]. For example, a large workload may not be a very high risk on its own, but when that high workload is managed automatically by a digital system, the employee might also have limited control around how the work is done and fewer opportunities for human contact or managerial support – and when all these factors compound, the risk increases dramatically.

What does this have to do with digital work systems?

The Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW) is the first Australian law to directly regulate algorithms, AI, automation and online platforms as their own category of workplace risk.

At this stage, only a few provisions under this act have commenced fully. SafeWork Australia is running a consultation process to develop official guidelines, and the remaining provisions will take effect upon publication of these guidelines. There’s no official publication date slated, which means that businesses need to be preparing now to avoid being taken by surprise.

Giorgia explained that this new legislation aims to reflect a recognition that technology can create workplace health and safety risks in the same way as physical equipment or work processes. 

“Under the new requirements, businesses using digital work systems such as AI tools, algorithms, automated rostering systems, productivity monitoring software and digital performance management platforms will need to ensure those systems do not create risks to workers' health and safety,” she said.

“This includes considering whether systems contribute to excessive workloads, unreasonable performance monitoring, intrusive surveillance or discriminatory decision-making.”

Under the Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW) a ‘digital work system’ is broadly defined to include any algorithm, artificial intelligence, automation or online platform.

The legislation specifically states that the use  of these digital work systems to allocate work is now legally considered a potential risk that could create a hazardous workplace environment.

It also requires businesses to proactively manage this risk, and they must specifically assess their digital system(s) to determine whether it creates excessive or unreasonable workloads for workers, excessive or unreasonable performance metrics, excessive or unreasonable monitoring or surveillance, and unlawful discriminatory practices or decision making.

Although New South Wales is currently the only state to explicitly impose these requirements, at the rate workplace health and safety laws have been evolving it’s very likely that other jurisdictions will follow suit sooner rather than later.

Giorgia also explained that just because digital work systems are not explicitly categorised as their own risk in other states does not mean that they cannot be considered a psychosocial hazard.

“Technology does not operate separately from workplace laws,” she said.

“A digital system that drives excessive working hours, creates unrealistic performance expectations or encourages employees to remain constantly connected could create psychosocial risks regardless of the jurisdiction.”

In the last decade alone, tools like artificial intelligence, automation software, enterprise resource planning (ERP) systems, customer relationship management (CRM) platforms, learning management systems (LMS), and communication software have delivered huge benefits to both employee and business wellbeing.

These tools can help reduce workloads, prevent errors, streamline workflows, and allow teams to communicate more effectively and collaborate from anywhere in the world.

But on the other hand, if not managed appropriately, digital work systems can also create or contribute to psychosocial risks by increasing work intensity, blurring boundaries between work and personal time, creating pressure through constant performance monitoring and reducing workers' control over how they perform their jobs.

“For example, automated scheduling systems may unintentionally create unpredictable workloads,” Giorgia said.

“Likewise, productivity tracking software can contribute to stress and anxiety or create perceptions of excessive surveillance.”

As workplace laws continue to evolve, Giorgia explained that businesses need to ensure their technology supports compliance rather than undermines it.

“Regulators are increasingly looking for evidence that psychosocial risks are being managed in the same systematic/holistic way as physical safety risks,” she said. 

Unfortunately, many businesses discover only after an injury has occurred that they were not meeting their legal requirements to identify, assess and control psychosocial hazards in the workplace.

“Issues such as excessive workloads, poor role clarity, inadequate support, workplace conflict, remote work arrangements, fatigue, change management processes and exposure to traumatic events can all be psychosocial hazards that require active management, before during and after any incidents,” Giorgia said.

“If an organisation promotes a culture where employees are expected to respond to notifications, emails or system alerts outside working hours, that could create risks around fatigue, psychosocial health and compliance with emerging workplace rights and obligations.”

Managing risks – what are your obligations?

Generally speaking, all employers in Australia have an obligation to identify and manage psychosocial risks in their workplace, however, Giorgia explained that there are important differences between each state and territory.

In all jurisdictions except Victoria, Workplace Health & Safety (WHS) laws are adapted from model laws created by SafeWork Australia – but just because they're sisters doesn't mean they're twins.

And, while the spirit of Victoria's laws is largely harmonised with the rest of the country, this state is governed by its own separate piece of legislation.

“For example, Victoria and New South Wales are the most stringent and prescriptive when it comes to any social/labour laws,” Giorgia said.

“These two states, along with Queensland, South Australia, the ACT and the Northern Territory all legally require psychosocial risks to be managed according to the hierarchy of controls framework.

“However, in Western Australia and Tasmania the use of the hierarchy of controls is not mandated for psychosocial hazards.”

For businesses operating in multiple states, staying on top of each jurisdiction's unique legislation is a lot of legwork. According to Giorgia, the safest approach is to aim for the highest common standard rather than trying to manage each state in isolation.

This usually means aligning to the hierarchy of controls, which ranks six control measures from most to least effective. Businesses are then required to manage risks using to the most effective controls first and can only work down the hierarchy if the higher-order controls are not reasonably practicable.

The highest-level control is elimination, which means that businesses are required to eliminate all psychosocial hazards unless doing so means that the business is unable to operate or deliver its products/services.

According to WorkSafe Victoria, eliminating a hazard could be changing job design and/or introducing safe systems of work; it could also be eliminating after-hours or night work or preventing employees from driving at night or performing solo shifts[4].

The regulator also says that the best way to eliminate a hazard is to avoid introducing the hazard in the first place and advises businesses to anticipate hazards and design the work and workplace to avoid the hazards before they can become risks.

In the case of digital systems, Giorgia said that before implementing a new system, employers should assess not only whether it improves efficiency, but also how it affects workload, autonomy, fairness, communication and worker wellbeing.

“Consulting workers during implementation and regularly reviewing impacts are not just important controls, they are a legal requirement,” she said.

If it is not possible to eliminate a hazard, then businesses must use Level 2 controls to reduce the risk as far as reasonably practicable. This includes substituting the hazard with something safer, isolating the hazard or implementing engineering controls.

In practice, this could mean changing reporting lines, ensuring that higher risk tasks are not undertaken during night shifts, providing alternative tools and equipment or improving the environmental conditions of a workplace.

Level 3 controls are work methods or procedures designed to minimise exposure to a hazard, and they should only be considered when higher control measures cannot be implemented. These administrative controls include things like providing employees with resilience training, mental health first aid and employee assistance programs (EAP).

According to Giorgia, this is one of the key areas that put businesses at risk of non-compliance.

“The most common misconception I encounter is that psychosocial risk management is simply providing a wellbeing or mental health initiative,” she said.

“While EAPs and wellness activities are valuable, they do not replace the legal requirement to identify, assess and control psychosocial hazards in the workplace.”

What should you do?

The regulatory environment is evolving quickly, particularly in areas such as psychosocial hazards, workplace mental health and emerging technologies, but all these changes mean many organisations are left unsure of where to start or how their obligations apply in practice. 

“My role is to help those businesses translate complex legislative requirements into practical, risk-based actions,” Giorgia said.

“Corporate and safety culture starts with the highest level of leadership and works its way down, so we work with organisations to identify psychosocial and operational risks, review management systems, undertake compliance assessments, develop targeted controls and build capability across leadership teams.”  
For businesses crossing multiple state lines, Giorgia said the best way to navigate the changing legislation is to maintain a central WHS framework while regularly reviewing jurisdiction-specific requirements.

“Having a consistent risk management process, supported by periodic legal and compliance reviews, can help organisations remain compliant across all operations while avoiding unnecessary complexity. This is something we do regularly and recommend in the proposal stage of any project,” she said.
When it comes to digital technology, Giorgia said that the key question organisations from all jurisdictions should ask is whether their systems are enabling healthy, sustainable work practices or unintentionally encouraging behaviours that increase risk.  

“Organisations should start by identifying where digital systems influence work allocation, performance measurement or employee monitoring and ensure those systems are included in WHS risk assessments and review processes,” she said. 
According to Giorgia, one of the most effective ways to mitigate risks is simply to lead by example.

“Leadership trust has a huge impact on a worker’s psychosocial safety. When a senior manager leads by example, adopts safe practices in their own work and takes the time to really consult with workers and make their contributions feel heard rather than dismissed that all builds trust,” she said.

“Then, when the workplace adopts new technologies, not only do managers gain a deeper understanding of the human impacts and how to manage them, but having that foundation of trust in the first place helps mitigate the risks associated with change management too.

“Ultimately, the goal is to build resilient systems that can adapt as workplace expectations and regulatory requirements continue to evolve.  
“And if you’re not sure what your obligations are, we’re here to help.”