NSW employers face tougher penalties under workers' comp reforms

03 Mar 2026

By Elizabeth Greenwood

Late last year, the NSW parliament passed the Workers’ Compensation Legislation Amendment Act 2025, but to date, none of its contents have become law.

This will only happen when commencement dates are announced.

However, to help NSW businesses prepare, we are preparing a series of articles explaining what each of those changes will be.

This article explains how the penalty regime has changed in relation to workers’ compensation:

  • insurance policies, and
  • insurance premiums.

Insurance policies

Regardless of size, NSW employers are penalised for failing to take out compulsory workers’ compensation insurance for their workers.  

Currently the maximum penalty is either:

  • 500 penalty units,
  • imprisonment for 6 months, or
  • both the penalty plus imprisonment.

For large employers, this will change (on a date yet to be confirmed).

Who will a large employer be?

A large employer will be defined as being either:

  • an employer:
    • insured under a policy of insurance to which the Workers Compensation Market Practice and Premiums Guidelines apply, and 
    • whose basic tariff premiums, within the meaning of the guidelines, for the policy would be more than $50,000, if the period of insurance to which the premium relates were 12 months, or
  • an employer
    • insured under more than one policy of insurance to which the Workers Compensation Market Practice and Premiums Guidelines apply, and
    • whose combined basic tariff premiums, within the meaning of the Guidelines, for the policy would be more than $50,000, if the period of insurance to which each premium relates were 12 months.

New penalties for large employers

The new penalties for large employers will be: 

  • the greater of the following amount – being either:
    • the amount that is three times the amount of premium that would have been payable if the policy of insurance had been obtained and maintained, or
    • 1000 penalty units, or
  • two years' imprisonment, or
  • both the greater amount plus imprisonment.

What if I’m not a large employer?

If your business does not fall within the new definition of large employer, then the penalty will remain the same.

Currently, under NSW law, a penalty unit is worth $110. 

Insurance premiums 

The new laws will also include a new offence regarding insurance premiums. 

Currently, a person who supplies information relevant to the calculation of the premium payable to the insurer (icare) will commit an offence if they provide information that they know is false or misleading. 

It will attract a penalty of 50 penalty units.

There will be an additional new offence. 

It will apply to an employer who recklessly fails to comply with a requirement under workers’ compensation laws to give the insurer (icare):

  • information about wages of workers employed by the employer, or
  • other information that enables the insurer to accurately calculate a workers’ compensation premium.

The penalties for this new offence will be same as described above.

Elizabeth Greenwood is Senior Policy Manager, Workers Compensation, WHS and Regulation, at Business NSW.