Australia: Psychosocial risk in NSW, what employers need to know
New South Wales has been one of the most active jurisdictions in Australia when it comes to strengthening workplace health and safety laws. For NSW employers, the obligations around psychosocial risk have changed significantly in recent years, and continue to evolve.
Here is what you need to know.
The foundation: Work Health and Safety Act 2011
The primary legislation governing workplace health and safety in NSW is the Work Health and Safety Act 2011, administered by SafeWork NSW. Under the Act, employers, referred to as persons conducting a business or undertaking or PCBUs, have a primary duty to ensure, so far as is reasonably practicable, the health and safety of their workers. Health includes psychological health.
The 2022 amendment regulations
In 2022, NSW amended its WHS Regulations to align with the national model regulations on psychosocial risk. These amendments inserted formal definitions of psychosocial hazard and psychosocial risk, and clarified that PCBUs must identify and manage psychosocial hazards in the same way they manage physical hazards.
The WHS Regulation 2025
The Work Health and Safety Regulation 2025 commenced on 22 August 2025, replacing the Work Health and Safety Regulation 2017. A significant change for psychosocial risk is that psychosocial risks must now be managed in accordance with the hierarchy of control measures, the same systematic approach applied to physical risks.
This is a meaningful strengthening of obligations. It means employers cannot rely solely on policies, training programs, or employee assistance programs to manage psychosocial risk. Higher-order controls, such as changes to work design, staffing levels, and systems of work, must be considered first.
The positive duty
The NSW government passed the Industrial Relations and Other Legislation Amendment (Workplace Protections) Act 2025, which introduced a positive duty in relation to psychosocial hazards and risks. This means NSW employers are now required to proactively prevent psychological harm, not simply respond to it after the fact.
SafeWork NSW as a standalone regulator
Effective 1 July 2025, SafeWork transitioned from being part of the NSW Department of Customer Service to being an independent statutory regulator, with a dedicated SafeWork Commissioner and a newly formed SafeWork Advisory Council.
This change is significant. A standalone regulator with dedicated leadership and increased funding signals a clear intention to strengthen enforcement. NSW employers should expect greater scrutiny of their psychosocial risk management systems.
Increased psychosocial reporting
SafeWork NSW must now report every six months to the Minister about the number and types of complaints and notices relating to psychosocial matters. While this does not impose direct obligations on employers, the indirect implication is that SafeWork NSW will increase its scrutiny of psychosocial complaints.
The Code of Practice
NSW has an approved Code of Practice for managing psychosocial hazards at work. Employers who comply with the Code will, in most cases, be taken to have met their obligations under the Act and Regulations. Failure to follow the Code can be used as evidence in legal proceedings.
What employers in NSW must do
Taken together, NSW employers are required to identify psychosocial hazards in consultation with workers, assess the risks those hazards create, implement control measures using the hierarchy of controls, review those measures regularly, and document the process.
Relying on a policy document alone is not sufficient. Employers need to demonstrate active, systematic management of psychosocial risk.
What happens if employers do not comply?
SafeWork NSW can issue improvement notices, prohibition notices, and in serious cases pursue criminal prosecution. Penalties for WHS breaches can be significant, up to $1.5 million for a body corporate and $300,000 for an individual under category 2 offences.
How HowsWork helps
HowsWork gives NSW employers a practical way to meet their obligations. It provides a documented, ongoing record of psychosocial concerns raised by employees, automatically categorises risks against known hazard types, and builds an audit-ready risk register that demonstrates active management over time.
