Understanding the New Mental Health Workplace requirements in Australia

Mental health at work is now law in Australia, and small business owners need to understand what this means for their operations. Recent changes, especially in Victoria, have made psychological health a legal part of workplace safety obligations. From 1 December 2025, employers in Victoria must actively manage psychosocial risks just like physical safety risks under Occupational Health and Safety (OHS) law. This post explains what small business owners need to know to comply with these new requirements and support mental wellness in the workplace.

What Are Psychosocial Risks?

Psychosocial risks are factors in the workplace that can harm employees' mental health. Examples include:

• Excessive workloads that cause stress and burnout

• Harassment or bullying among staff

• Poor job design that leads to confusion or lack of control

• Lack of support or unclear communication

  
  

These risks can affect employee wellbeing, productivity, and safety. The new law requires businesses to identify these hazards and take steps to reduce or eliminate them.

Legal Responsibilities for Small Business Owners

Under the updated OHS laws in Victoria, small business owners and CEOs hold the legal responsibility for mental health at work. While counsellors or psychologists can advise and assess mental health risks, the final legal sign-off and accountability rest with the business leadership.

This means:

• You must have documented systems and processes to manage psychosocial risks.

• You need to regularly monitor and review the effectiveness of controls you put in place.

• Failure to comply can lead to legal penalties and enforcement actions.

  
  

The law treats mental wellness in the workplace with the same seriousness as physical safety, so it is not optional or just a guideline.

Practical Steps to Manage Mental Health Risks

Identify Hazards

Start by assessing your workplace for psychosocial hazards:

• Reviewing incident reports related to stress or bullying

• Consulting with mental health professionals

  
  

Implement Controls

Once hazards are identified, put controls in place to reduce risks. Examples include:

• Adjusting workloads to prevent burnout

• Establishing clear anti-bullying policies and complaint procedures

• Improving job design to give employees more control and clarity

• Providing access to mental health resources and support

  
  

Document Your Processes

Keep clear records of your risk assessments, controls, and reviews. Documentation shows your commitment to compliance and helps during inspections or audits.

Why Mental Wellness in the Workplace Matters

Supporting mental wellness in the workplace benefits both employees and the business. Healthy employees are more engaged, productive, and less likely to take sick leave. For small businesses, this can mean better customer service, lower costs, and a stronger reputation.

The new laws reflect growing recognition that mental health is as important as physical health. By taking these legal obligations seriously, small business owners can create safer, more supportive workplaces.

How Counsellors can help you

A counsellor can play a valuable role in helping businesses meet their mental health obligations by providing practical, preventative support. This can include conducting psychosocial risk assessments, reviewing workplace policies, and identifying areas where stress, burnout, or poor workplace dynamics may be impacting staff. Counsellors can also deliver regular stress management sessions, mental health workshops, and leadership training to equip teams with the tools to recognise early warning signs, regulate stress, and build a healthier, more supportive workplace culture. Importantly, simply having an EAP as a “checkbox” support offering is no longer enough, employees now expect more proactive, visible, and embedded mental health support within their day-to-day work environment.

Beyond training, counsellors can offer ongoing support through structured programs such as monthly wellbeing check-ins, group sessions, or confidential employee support pathways. They can guide businesses in implementing proactive strategies, improving communication, and creating psychologically safe environments that go beyond reactive care.

While they support assessment and implementation, it’s important to note that legal responsibility and final sign-off always remain with the business owner or CEO, ensuring accountability sits where it legally belongs.