Big changes are coming to Workers Compensation in NSW 2025

Author: Dr David Brentnall

From premiums to psychosocial risk changes, we look ahead to five changes kicking in this year and how they could impact you.

In 2025, SafeWork NSW and associated regulatory bodies have introduced significant changes impacting employers in New South Wales. Key themes and reforms include:

1. Industrial Manslaughter Legislation

New Offence: The introduction of an industrial manslaughter offence holds employers and officers criminally liable for workplace fatalities resulting from gross negligence.

Penalties: Convictions can lead to fines up to $20 million for corporations and imprisonment up to 25 years for individuals.

2. Enhanced Focus on Psychosocial Hazards

Regulatory Attention: SafeWork NSW has launched a Psychological Health and Safety Strategy, emphasizing the prevention and management of workplace mental health risks.

Compliance Blitz: There is an increased focus on ensuring employers address psychosocial hazards, with potential inspections and enforcement actions.

3. Workers’ Compensation Premium Increases

Premium Rate Hike: The average workers’ compensation premium rate has risen by 8% for the 2024-25 financial year.

Minimum Premium Adjustment: The minimum premium payable by employers has increased from $175 to $225.

4. Ban on Engineered Stone Products

Total Ban Implementation: As of January 1, 2025, there is a complete ban on the supply, installation, and processing of engineered stone benchtops, slabs, and panels due to health concerns related to crystalline silica exposure.

In 2025, employers in New South Wales face increased legal liabilities, heightened compliance obligations, and rising operational costs due to new regulations introduced by SafeWork NSW and related bodies. Adapting to these changes is essential to mitigate legal, financial, and reputational risks.

Here are the key challenges employers might face – Implications for Employers in Western Australia:

1. Increased Legal Liability

The industrial manslaughter offence introduces significant legal risks, necessitating rigorous compliance with safety protocols to avoid severe penalties.

2. Heightened Compliance Obligations

Addressing psychosocial hazards requires employers to implement comprehensive mental health strategies and may lead to increased inspections and enforcement actions.

3. Rising Operational Costs

The 8% increase in workers’ compensation premiums and higher minimum premiums will elevate operational expenses for businesses.

4. Operational Adjustments

The ban on engineered stone products mandates a shift to alternative materials, potentially increasing costs and requiring changes in procurement and training processes.

5. Financial and Reputational Risks

The criminalization of wage underpayment imposes strict penalties, emphasizing the need for accurate payroll practices to avoid legal and reputational damage.

6. Communication Protocol Revisions

The right to disconnect laws require employers to establish clear communication boundaries, potentially affecting productivity and necessitating policy updates.