WHS penalties in NSW increased significantly from 1 July 2024 under the Work Health and Safety Amendment Act 2023 (NSW). The Act more than doubled the maximum fines for the most serious WHS offences and extended maximum imprisonment terms. It also introduced an annual penalty indexation mechanism tied to the Australian Consumer Price Index, meaning these amounts will continue to increase each financial year.

Alongside the Act, the Work Health and Safety Amendment (Penalty Notices) Regulation 2024 introduced 88 new penalty notice offences and increased all existing penalty notice amounts by 24 per cent from 1 July 2024.

The updated penalty structure

The WHS Act 2011 (NSW) categorises offences into three tiers based on severity. The following penalty amounts are calculated using the penalty unit value of $120.42 for the 2024-25 financial year, as published by SafeWork NSW.

Category 1: Reckless conduct (section 31). A duty holder engages in conduct that exposes a person to a risk of death or serious injury or illness, and is reckless as to the risk. Maximum penalties: approximately $10.9 million for a body corporate, approximately $2.3 million plus up to 10 years' imprisonment for an individual PCBU or officer, and approximately $1.1 million plus up to 10 years' imprisonment for any other individual. Prior to 1 July 2024, the maximum for a body corporate was approximately $4 million and imprisonment was capped at five years.

Category 2: Failure to comply with a health and safety duty (section 32). A duty holder fails to comply with a duty and the failure exposes a person to a risk of death or serious injury or illness. Maximum penalties: approximately $2.2 million for a body corporate, approximately $437,000 for an individual PCBU or officer, and approximately $218,000 for any other individual. Prior to 1 July 2024, the maximum for a body corporate was approximately $2 million.

Category 3: Failure to comply with a health and safety duty (section 33). A duty holder fails to comply with a duty. No requirement for exposure to risk of death or serious injury. Maximum penalties: approximately $731,000 for a body corporate, approximately $146,000 for an individual PCBU or officer, and approximately $73,000 for any other individual.

Penalty notice increases

The Amendment Regulation increased on-the-spot penalty notice amounts by 24 per cent from 1 July 2024 and introduced 88 new penalty notice offences. For companies, penalty notices for common offences such as failure to comply with an improvement notice, failure to notify SafeWork NSW of a notifiable incident, and high-risk work without authorisation all increased. These penalty notice amounts are distinct from the maximum penalties a court can impose. A penalty notice is issued by an inspector on the spot. If a matter proceeds to court, the penalties available to the court are substantially higher, up to the maximum amounts set out above.

Annual penalty indexation

The WHS Amendment Act 2023 introduced section 242B to the WHS Act, which provides for the annual indexation of penalty unit values based on movements in the Australian Consumer Price Index. The penalty unit value for the 2024-25 financial year is $120.42. This value will be recalculated each financial year, meaning all penalty amounts across the WHS Act and WHS Regulation will increase annually without the need for further legislative amendment.

This indexation mechanism ensures that the deterrent value of WHS penalties keeps pace with inflation. It also means that the penalty amounts set out above are the floor, not the ceiling, of what organisations can expect over the coming years.

What this means for psychosocial compliance

These penalties apply to all WHS duties, including the duty to manage psychosocial risks. A failure to identify, assess and control psychosocial hazards that exposes a worker to a risk of serious psychological injury could attract prosecution under Category 2. If the failure involved recklessness, a Category 1 prosecution is available.

NSW was the first jurisdiction to adopt the Code of Practice: Managing Psychosocial Hazards at Work and the first to adopt the amended WHS Regulations with specific psychosocial provisions. The SafeWork NSW Psychological Health and Safety Strategy 2024-2026 commits the regulator to compulsory psychosocial WHS checks during all inspector visits to organisations with 200 or more workers and a 25% annual increase in inspector compliance visits. SafeWork NSW has stated that it will issue improvement notices, prohibition notices or formal warnings, and may prosecute workplaces that repeatedly do not comply or where they have seriously breached WHS laws.

The combination of increased penalties, annual indexation and an enforcement-forward regulator means the financial consequences of non-compliance with psychosocial obligations in NSW are substantial and growing.

Disclaimer: This article provides general information on psychosocial compliance in Australian workplaces. It does not constitute legal advice. Penalty amounts cited are calculated using the 2024-25 penalty unit value of $120.42 as published by SafeWork NSW and are approximate. Organisations should consult qualified professionals for advice specific to their circumstances.