Psychosocial compliance in New South Wales
Luke Giuseppin
New South Wales is the most active psychosocial enforcement jurisdiction in Australia. SafeWork NSW has a dedicated Psychosocial Programs team, compulsory psychosocial checks on every inspector visit to organisations with 200 or more workers, and a 66% prosecution rate on completed investigations in the second half of 2025. For NSW employers, psychosocial compliance is no longer a horizon obligation to plan for. It is an active enforcement area with documented inspector attention and penalties at every tier of severity.
This page sets out the law that applies in NSW, what SafeWork NSW expects to see when an inspector walks in, how the regulator is currently enforcing, and what that means for organisations trying to meet the obligation properly. The financial side of failing to do so is set out separately on the cost of psychosocial non-compliance, the cost of psychological injury claims, and the cost of officer liability.
The WHS Act, regulations, and Code of Practice that apply in NSW
Psychosocial compliance in New South Wales is governed by the Work Health and Safety Act 2011 (NSW), the Work Health and Safety Regulation 2025, and the Code of Practice: Managing Psychosocial Hazards at Work. Three documents, three different roles.
The WHS Act 2011 establishes the primary duty of care. It requires every person conducting a business or undertaking (a PCBU) to ensure, so far as is reasonably practicable, the health and safety of workers. "Health" under the Act explicitly includes psychological health.
The WHS Regulation 2025, which took effect on 22 August 2025 when the WHS Regulation 2017 was revoked and remade, sets out the specific duty to manage psychosocial risks. It requires duty holders to identify reasonably foreseeable psychosocial hazards, eliminate risks where reasonably practicable, and otherwise minimise them. The 2025 remake introduced a significant uplift: the hierarchy of controls must now be applied to the management of psychosocial risks. That is a material change. Organisations relying on a single control measure, typically a policy and an EAP, no longer meet the regulatory standard.
The Code of Practice: Managing Psychosocial Hazards at Work was published by SafeWork NSW in May 2021, making NSW the first Australian jurisdiction to publish a psychosocial-specific code. The Code is admissible in court as evidence of what is known about psychosocial hazards and the controls available to address them. An inspector may refer to it when issuing an improvement notice or prohibition notice.
What SafeWork NSW expects from organisations
SafeWork NSW expects organisations to identify psychosocial hazards, assess the risks they pose, implement controls following the hierarchy of controls, and review whether those controls are working. This is the four-step risk management process embedded in the Regulation. The Psychosocial Compliance Internal Audit Checklist is a structured way to assess where the organisation currently sits against this process.
When an inspector attends a workplace, the questions asked are consistent across industries and organisation sizes:
What psychosocial hazards have you identified in your workplace?
How did you assess the risks those hazards pose?
Can you show the records of your hazard identification and risk assessment?
What controls have you implemented, and how do they follow the hierarchy of controls?
Who is responsible for each control?
When were the controls last reviewed for effectiveness?
How do you know the controls are actually working?
Most organisations cannot answer these questions to the standard an inspector expects. The gap is rarely intent. It is infrastructure: spreadsheets, inboxes, and annual engagement surveys were not built to produce the evidence a regulator now asks for. The operational cost of running compliance manually is itself a material exposure.
The hierarchy of controls requirement, new since August 2025, is where many NSW employers are most exposed. The hierarchy asks: can the hazard be eliminated? If not, can it be substituted or engineered out? Can administrative controls be layered in? Personal measures like EAP referrals sit at the bottom of the hierarchy, not the top. An organisation whose only documented control for workload pressure is "EAP access available" has not met the hierarchy requirement.
How SafeWork NSW is enforcing
SafeWork NSW became a standalone regulator on 1 July 2025 under the Work Health and Safety Amendment (Standalone Regulator) Act 2025, with statutory reporting obligations every six months. The first report, published in March 2026, confirmed what the sector had been observing: NSW has built the most aggressive psychosocial enforcement capability in the country.
The operational picture as at December 2025:
$127.7 million in dedicated enforcement funding
469 total inspectors, including 20 new inspector roles in a dedicated Psychosocial Programs team
25% year-on-year increase in compliance visits
A new Psychosocial Advisory Service funded through the 2025–26 NSW Budget uplift
Compulsory psychosocial checks during every inspector visit to organisations with 200 or more workers
Psychosocial risk management named Priority #3 in the 2025–26 Annual Regulatory Statement, including sexual harassment as a named focus area
The activity picture is equally unambiguous. In a single three-day operation in October 2025, SafeWork NSW conducted 570 unannounced inspections, issuing 736 notices to 261 employers and $63,300 in fines. As at the end of the reporting period, 168 investigations were active, and of 79 investigations completed in H2 2025, 52 resulted in prosecution, a 66% prosecution rate.
For context, SafeWork NSW implemented 37 of 46 McDougall Review recommendations and all 10 NSW Audit Office recommendations by December 2025. The regulator's enforcement posture is not a campaign. It is an operating model.
Psychosocial complaints in NSW by industry
Psychosocial complaints made up 19.5% of all requests for service to SafeWork NSW in the second half of 2025, with 1,476 psychosocial RFS lodged in that period alone. Across the full 2025 calendar year, SafeWork NSW recorded 2,678 psychosocial complaints.
The sector distribution matters for organisations trying to assess their own exposure:
Industry | % of psychosocial RFS (H2 2025) |
|---|---|
Healthcare and social assistance | 20% |
Education and training | 12% |
Other services | 12% |
Construction | 8% |
Retail trade | 8% |
Public administration and safety | 7% |
Transport, postal and warehousing | 7% |
Accommodation and food services | 6% |
Manufacturing | 5% |
Healthcare and education together account for nearly a third of psychosocial complaints in NSW. Construction is under-represented relative to its share of general safety complaints, which signals under-reporting rather than low exposure. The Psychosocial Programs team's 20 inspectors are distributed across all operational areas, so regulator attention is not confined to the top-ranking sectors.
Penalties under the NSW WHS Act
The WHS Act 2011 (NSW) sets out three categories of offence for breaches of the primary duty of care. Category 1 covers the most serious conduct: reckless exposure of a person to risk of death or serious injury, where the duty holder knew of the risk. Maximum penalties under the model WHS framework adopted by NSW are in the millions for corporations and up to five years' imprisonment for individuals found reckless.
Officers, including directors and senior executives, carry a personal and non-delegable due diligence duty under section 27 of the Act. An officer cannot discharge that duty by delegating WHS to a manager. They must take reasonable steps to acquire and maintain knowledge of WHS matters, understand the nature of the organisation's operations and their associated psychosocial hazards, and verify that appropriate resources and processes are in place to manage them. The cost picture for officers carrying that duty is set out separately.
That means psychosocial risk now sits on the board agenda in a way it did not three years ago. A board unable to describe the organisation's top psychosocial hazards, what controls are in place, and how effectiveness is measured is a board whose officers are exposed.
What this means for NSW employers
The enforcement posture, the hierarchy of controls requirement, and the volume of complaints land in the same place for any NSW employer: psychosocial compliance needs to be operational, not aspirational.
That means hazards are identified through a documented process, not assumed to be absent. Risks are assessed with evidence, not sentiment. Controls are selected against the hierarchy and mapped to the specific hazards they address. Evidence is generated, stored, and retrievable. Effectiveness is measured, and the whole loop runs continuously, not annually.
The alternative is reactive compliance: waiting until an incident, a complaint, or an inspection forces a response. Every part of the NSW regulatory posture is designed to make that approach more costly and more visible. The 200-worker threshold means mid-market organisations are already inside the scope of automatic psychosocial inspection. The hierarchy of controls requirement means "we have an EAP" no longer functions as a control answer. The standalone regulator structure means the posture will be audited publicly every six months.
For a more detailed walkthrough of what systematic psychosocial compliance looks like in practice, see our definitive guide to psychosocial compliance in Australia. If your organisation operates across state lines, Victoria's psychosocial framework differs from NSW because Victoria operates under its own OHS Act rather than the model WHS Act, with no transitional provisions. Queensland has had express psychosocial regulations longer than any other state, and Western Australia publishes its own state-specific Code of Practice. Commonwealth-covered organisations should review the Comcare framework. The cost of psychosocial non-compliance covers the financial side: penalties, claims costs, and operational impact. For the specific process of identifying and assessing hazards in a way that meets the regulator's expectations, see our guide to conducting a psychosocial risk assessment.
Check your NSW compliance readiness
Most NSW organisations have some of the pieces in place: a wellbeing program, an EAP, an annual engagement survey, a policy. Few have all the pieces, structured in the way a SafeWork NSW inspector expects to see them.
A 5-minute psychosocial compliance readiness survey will give you a sense of where you stand against the current NSW requirements, including the hierarchy of controls uplift and the four-step risk management obligation. If you would prefer a conversation, Harrison runs 20-minute compliance gap walkthroughs: no pitch, just a structured look at your current posture against what the regulator is now asking for.