The Council of Small Business Organisations Australia (COSBOA) has raised serious concerns following the passage of the NSW Digital Work Systems Bill, warning that the legislation represents a significant expansion of workplace regulation and risks imposing significant new compliance burdens on small businesses across the state.

COSBOA Chair Matthew Addison said that while the Bill has now passed Parliament, serious questions remain about how the new provisions will operate in practice, particularly for small businesses with limited administrative capacity.

“Small businesses are not large corporations with in-house legal teams and dedicated compliance departments,” Mr Addison said.

“They rely on digital tools every day, from payroll and rostering systems to booking platforms and customer databases. These systems are essential to running a business, and any new access or regulatory requirements must recognise the realities of small business operations.”

Mr Addison said there are ongoing concerns about the scope of the new union right of entry provisions relating to digital systems and the potential exposure of commercially sensitive or personal information.

“In small business systems, customer data, employee records and operational systems are often integrated. This means the risk profile for small business is very different. Any external access to digital systems must be tightly defined and carefully managed to avoid exposing sensitive or commercially confidential information.”

COSBOA acknowledges amendments secured by the NSW crossbench that introduce important safeguards before the new powers take effect.

“We welcome the crossbench ensuring that formal guidelines will be developed before the new powers commence, and that small business will be consulted in the formation of those guidelines,” Mr Addison said.

“Advance notice requirements, industry-specific guidelines and a 12-month review provide an opportunity to ensure the framework reflects the realities of small business operations.”

However, Mr Addison cautioned that the broader impact of the legislation must not be underestimated.

“Small businesses are navigating sustained cost pressures, workforce shortages and increasing regulatory complexity,” he said.

“At a time when small businesses are being encouraged to invest in digital systems and productivity-enhancing technology, any new compliance obligations – particularly in relation to digital systems that underpin daily operations – must be proportionate and clearly defined.”

“Regulation should strengthen workplace safety without discouraging digital innovation, investment or productivity.”

COSBOA will engage constructively in the guideline consultation process to ensure the final framework reflects the operational realities of small business.

“With the legislation now passed, the focus must shift to practical and proportionate implementation,” Mr Addison said.

“Small businesses want to comply and support safe workplaces, but they need certainty, clarity and confidence that compliance can be achieved without unnecessary disruption, cost or risk to sensitive data.”

“COSBOA will work with government and stakeholders to ensure small businesses understand their obligations and are equipped to meet them without unnecessary complexity, disruption or cost.”