Psychological injury claims have doubled over six years and now represent 38% of total workers' compensation costs - with the average claim jumping from $146,000 to $288,542.

In response to the concerning increase, SafeWork NSW has significantly expanded its psychosocial-focused inspector team as part of its efforts to address hazards and compliance in workplaces.

So, what counts as a psychosocial hazard, and what do you need to do?
 

What Are Psychosocial Hazards?

Psychosocial hazards are aspects of work that can cause psychological and/or physical harm.

The Code of Practice specifically identifies several key hazards that employers must address including workplace bullying, harassment including sexual harassment, workplace violence of aggression, and exposure to traumatic events or distressing content.

While these hazards manifest differently across various sectors - from healthcare workers dealing with patient aggression to office workers experiencing workplace bullying - their impact on employee wellbeing is universal.
 

How You Can Make Sure Your Business Is Compliant

Navigating these new regulations alone can feel overwhelming, especially for organisations just beginning to address psychosocial risks systematically.

Additionally, the nature of these risks mean that standard WH&S systems are often not fit for purpose when it comes to managing psychosocial risks as they do not allow confidential investigation for sensitive issues. There are a few key steps to help get you started:

Identify & Assess Your Risks
Systematically identify and assess psychosocial risks across your organisation, using evidence-based frameworks, anonymous reporting channels and consultation with workers to ensure nothing falls through the cracks.

It is important to note that the People at Work (PAW) tool developed by Safework Australia (in collaboration with other organisations and regulatory bodies) is being decommissioned during June and October 2026, so employers will need to find alternative ways (such as Foremind’s engagement tool) to survey and engage with staff after this date.

Implement Controls
Implement practical, actionable strategies to eliminate or control identified psychosocial risks, tailored to your specific industry, workforce, and organisational context.

Monitor & Review Cycles
Compliance is not a one-time exercise. Ensure that you continuously monitor your psychosocial risk controls, ensuring they remain effective as your workplace evolves. It is important to document your review process.

Provide Support & Training for Your Team
Provide proactive support options for your team and equip your leaders and employees with the knowledge and skills needed to recognise, report, and respond to psychosocial hazards and risks effectively.

Log Documentation & Reporting
Maintain comprehensive written records of your compliance efforts, making it easy to demonstrate due diligence to SafeWork NSW inspectors and other stakeholders.
 

Don’t Get Caught Out

Managing psychosocial risks doesn't have to be overwhelming. The cost of ignoring psychosocial risks far exceeds the investment required to manage them proactively.