Victoria’s New Workplace AI Surveillance Laws: What Small Business Owners Need to Know

Victoria’s Labor government announced today that it plans to introduce legislation banning employers from using AI to read workers’ emotions, requiring advance notice before any monitoring begins, and limiting biometric data collection to situations where no less-intrusive option exists.

Premier Jacinta Allan and Treasurer Jaclyn Symes made the announcement flanked by union leaders, including Victorian Trades Hall secretary Luke Hilakari. The package follows a parliamentary inquiry that tabled its report in May 2025, and comes ahead of the November 2026 state election.

If you run a small business in Victoria with even a handful of staff, this matters. Here’s what the proposed law does, and what you should be doing now.

What the bill actually does

The proposed legislation covers four areas.

Emotion-reading AI is banned. Software that infers workers’ emotional states, detects whether someone might be pregnant, or flags susceptibility to conditions like PTSD will be prohibited. Symes was direct about why: “We’re hearing stories about people’s emotions being read, about whether they are susceptible to post-traumatic stress disorder, picking up whether they’re pregnant before they’re publicly disclosing that.” There’s a narrow safety exception, fatigue monitoring for truck drivers, for instance, but general emotion inference is out.

Workers must be told they’re being monitored. Before surveillance starts, employers will need to give written notice covering what’s being collected, why, how long the data is kept, and who can access it. The government is looking at models similar to NSW and ACT, which require 14 days’ notice. Right now in Victoria, there’s no legal obligation to tell staff anything.

Biometric data gets a higher bar. Fingerprint scanners, facial recognition, voiceprint systems, these will only be allowed where there’s no less-intrusive alternative available. An attendance system that uses face scan when a PIN would do the same job would struggle to pass that test.

Selling employee data is banned outright. Any sale of workers’ personal or surveillance data to third parties will be prohibited.

Who this affects

Practically every Victorian employer that uses technology to manage staff. That includes:

• Time-and-attendance apps with biometric login
• Scheduling software that tracks location
• Computer monitoring tools (keystroke logging, screen capture)
• Work-from-home monitoring software that accesses webcam or audio
• AI-assisted hiring tools that score or rank candidates

The bill is designed to apply “wherever work occurs”, so remote workers are covered, not just people in a physical office.

To illustrate what’s at stake: Hilakari described a Melbourne company that recorded audio and video through staff laptops for 10 hours straight during WFH shifts, capturing private conversations and children in the background, then sacked two workers who raised objections. That kind of monitoring would face serious legal risk under the proposed rules.

What’s still allowed

Workplace monitoring isn’t being banned. The government has been explicit that surveillance for legitimate safety and compliance purposes stays in. You can still:

• Use CCTV on your premises (with proper notice)
• Monitor company-owned devices for security or compliance
• Track vehicle locations for fleet management
• Use entry systems, provided they don’t rely on biometrics where a card or PIN would work just as well

The test is proportionality: does the monitoring method match the stated purpose, and is it the least-intrusive way to get there?

What to do now

The bill isn’t law yet. Labor still needs to introduce it, and whether that happens before or after the November election is still open. But the direction is settled, and preparing now is cheaper than scrambling when the legislation lands.

Audit your current tools. Go through every piece of software that touches your employees, time trackers, payroll systems, project management tools, hiring platforms. Ask vendors: Does it collect biometric data? Does it use AI to score, rank, or assess workers? What data is retained, and for how long? Does it share data with third parties?

Check your monitoring practices. If you use any form of computer monitoring, screen recording, activity trackers, keystroke logging, document why you use it and whether staff know about it. If employees don’t know they’re being monitored, that’s the first thing to fix.

Draft a written surveillance policy. The proposed legislation will likely require one. It doesn’t need to be long: what you monitor, why, how long you keep the data, who sees it. Getting this in writing also gives you a paper trail if a dispute arises.

Be careful with AI has in new software. If you’re shopping for scheduling, time-tracking, or hiring tools, ask hard questions before you sign up. Products that pitch “engagement scoring,” “sentiment analysis,” or “productivity scoring” based on behavioural signals are exactly what this law targets. Either pick tools that let you turn those has off, or avoid them.

The bottom line

This isn’t about technology disappearing from workplaces. Symes was clear that the goal is to make monitoring “fair, balanced, ethical and done with consent”, not to end it.

Employers who already monitor staff openly, collect only what they need, and handle employee data carefully won’t need to make dramatic changes. But if your monitoring practices aren’t documented, staff don’t know what’s being tracked, or you’re using AI that analyses emotional states, getting that sorted now is the smart move.

Sources

• iTnews: “Vic Labor moots workplace AI and biometrics surveillance curbs”, https://www.itnews.com.au/news/vic-labor-moots-workplace-ai-and-biometrics-surveillance-curbs-627502
• Corrs Chambers Westgarth: “Victorian Government backs landmark workplace surveillance reforms”, https://www.corrs.com.au/insights/victorian-government-backs-landmark-workplace-surveillance-reforms
• Parliament of Victoria, Inquiry into workplace surveillance: https://www.parliament.vic.gov.au/inquiryintoworkplacesurveillance
• AFR: “Workplace surveillance laws: NSW and Victoria move to legislate controls amid AI and WFH boom”, https://www.afr.com/work-and-careers/workplace/states-to-tighten-rules-on-watching-workers-in-age-of-wfh-and-ai-20251119-p5ngjp

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