Psychosocial risks in the workplace can be identified, managed and reduced, and acting early protects your people and your business.

Mental health conditions are now one of the most expensive types of workplace injury in Australia. They keep people away from work far longer than most physical injuries, and the cost of a claim grows the longer a worker goes without the right support.

For employers and insurers, the good news is that most of these claims start with hazards that can be seen in advance. This guide explains what psychosocial risks are, what Australian law now expects, and what practical steps make the biggest difference.

What are psychosocial risks?

A psychosocial hazard is anything in the design or management of work, or in workplace interactions, that may cause psychological harm. Psychological harm includes conditions such as anxiety, depression, post-traumatic stress disorder (PTSD, a lasting stress reaction after a traumatic event) and burnout. Psychosocial risk is the chance that a hazard will actually cause that harm.

Common hazards named in the Safe Work Australia model Code of Practice include:

Hazards rarely occur alone. A worker with heavy demands, little control and poor support is at much higher risk than one facing any single hazard.

Why it matters: the numbers

Safe Work Australia's Key Work Health and Safety Statistics 2025 show that mental health conditions made up 12% of serious workers' compensation claims in 2023-24, about 17,600 claims. That number has risen by more than 160% over ten years.

The cost per claim is what stands out. The median time lost for a mental health claim was 35.7 weeks, almost five times the 7.4 weeks across all serious claims. The median compensation paid was $67,400, more than four times the figure for all serious claims.

The causes are also clear. Of mental stress claims, around a third followed harassment or workplace bullying, about a quarter followed work pressure, and a further 16% followed exposure to violence. These are workplace factors employers can influence.

Psychosocial risks are managed the same way as a slippery floor or an unguarded machine, by fixing the work, not just the worker.

What the law expects of Australian employers

Under the Work Health and Safety Act, a person conducting a business or undertaking (PCBU) has always had a duty to protect workers' psychological health as well as their physical health. Recent changes have made that duty much more specific.

The model WHS Regulations now require PCBUs to identify psychosocial hazards, eliminate the risks where reasonably practicable, and otherwise minimise them. They must consider factors such as how long and how often workers are exposed, the design of the work and the systems in place. Most states and territories have adopted these rules alongside a Code of Practice on managing psychosocial hazards.

Two recent changes raise the stakes further:

• Victoria: the Occupational Health and Safety (Psychological Health) Regulations took effect on 1 December 2025. Employers must fix hazards at the source, through work design and systems of work, and cannot rely mainly on training or information.
• New South Wales: from 1 July 2026, approved Codes of Practice became enforceable under section 26A of the NSW WHS Act. Businesses must follow the psychosocial hazards Code or show they manage the risk to an equal or higher standard.

Wellbeing apps and resilience workshops have their place, but on their own they will not meet these obligations. Regulators expect changes to the work itself.

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A practical approach to managing psychosocial risks

A simple, repeatable process works better than a one-off audit.

1. Identify. Talk to workers, review incident and leave data, run anonymous surveys and look at exit interviews. Patterns in sick leave or turnover often point to a hazard.
2. Assess. Consider how severe the harm could be, how often workers are exposed, and how hazards combine.
3. Control. Start with changes to work design: workloads, rosters, role clarity, reporting lines and how change is managed. Use training and information to support these changes, not replace them.
4. Consult. Involve workers and health and safety representatives at every step. They know where the pressure points are.
5. Review. Check that controls are working, especially after an incident, a complaint or a major change.

Keep records of each step. Under the newer rules, being able to show your reasoning matters almost as much as the controls themselves.

Early intervention: where insurers and employers gain most

When a worker does start to struggle, timing is everything. The longer someone goes without assessment and treatment, the harder and more costly the return to work becomes. Delays of weeks waiting for a first appointment can turn a manageable stress reaction into a long-term claim.

Telehealth removes much of that delay. A worker can see a doctor by video from home, often within days, without travel or time away from family. For regional and remote workforces, it may be the only practical way to get timely specialist input.

Early medical assessment helps everyone involved. The worker gets a clear diagnosis and treatment plan, the employer gets guidance on suitable duties and adjustments, and the insurer gets the evidence needed to manage the claim well. For workers who are not yet on a claim, an early consultation can prevent one altogether.

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The Docto Workplace Health team

This blog is for informational purposes only and does not constitute medical or legal advice. Please consult a licensed healthcare provider for diagnosis and treatment, and seek workplace legal advice about your specific obligations.