The same technology helping businesses automate scheduling, draft policies and analyse payroll data is helping  employees understand their rights, identify underpayments and construct formal grievances in an instant. 

Citation Group has released its inaugural Workforce Pulse 2026 report, revealing that  artificial intelligence (AI) is rapidly changing workplace risk for Australian businesses by giving employees faster,  easier access to employment information, legislation and grievance tools. 

According to the report, AI is no longer simply a productivity tool for employers, it’s aiding employees too. While  businesses are using it to automate rostering, draft policies and analyse payroll data, employees are also using  the same technology to better understand their rights, identify potential underpayments and prepare formal  grievances with speed and a sophistication that previously required legal assistance. 

Based on a national survey of 510 Australian business owners and managers, the report found AI adoption is  widespread in the workplace, with 48% of small, 65% of medium and 73% of large businesses already using it at  work. However, adoption is moving faster than governance. Of those businesses already using AI, only 29%  strongly agree that it’s being used in a safe and beneficial way for their business – leaving 71% unable to make  that claim. 

This rapid uptake is creating a new risk environment for businesses, particularly those relying on informal  processes, verbal conversations or incomplete records. Employment law complexity, which once acted as a  barrier in businesses’ favour, is becoming easier for employees to navigate with the help of AI. 

This shift is already being felt across workplace dispute systems, with the Fair Work Commission linking a 70%  rise in workload over three years in part to employees using AI tools to lodge claims faster. But volume doesn't  equal validity – many AI-assisted claims contain errors in law, invented case references or facts that don’t stack  up. The problem for employers is that a confident-looking claim still requires a proper response, even when it’s  weak. 

Brittany Byrne, Partner and Solicitor at Citation Legal, acknowledged that AI is creating a new class of  employees and former employees who will test workplace decisions in ways many businesses aren’t prepared  for. 

“AI is giving employees faster access to information about their rights and entitlements. That doesn’t mean every  AI-assisted complaint is valid, but it does mean every complaint needs to be handled properly,” said Byrne. “The  businesses most exposed are not necessarily those doing the wrong thing deliberately. They’re the businesses  relying on informal processes, verbal conversations and undocumented decisions in an environment where  employees are increasingly informed and empowered to act.” 

For employers, this means concerns that may once have started as informal conversations can now arrive as  detailed, multi-page grievances drafted overnight and supported by references to legislation, before a manager  has even had a chance to clarify what happened. For businesses without dedicated HR or legal support, these  complaints can be difficult to interpret, and even harder to respond to confidently. This gap between employer  confidence and employee capability is where the new risk sits. 

How to spot an AI-assisted workplace claim  AI is making it much easier for employees to put together formal complaints and workplace claims. Some are  well researched, others just sound convincing.  The first step is always to get proper advice, but there are usually a few clues when AI has played a role: • Language that feels unusually formal, polished or repetitive   • US spelling or legal terminology that doesn’t fit the Australian employment law system • References to legislation, cases or obligations that are inaccurate, invented or do not apply to the  circumstances  • Important facts missing from the story, or details that don’t line up   • Conclusions that appear confident, but don’t really match the situation

Michal Roucek, also Partner and Solicitor at Citation Legal, said the rise of AI-enabled workplace claims is  reshaping how businesses manage employment risk. 

“Employees using AI are quickly exposing weaknesses in contracts, policies and payroll compliance – from  underpayment claims to unfair dismissal. It’s now more important than ever for businesses to get the right advice  from a human expert,” said Roucek. “The new reality in employment relations is that AI makes it easier for  employees and former employees to identify gaps, challenge management decisions and escalate concerns before a business even realises it was exposed.” 

The report highlights a clear gap between business confidence and operational readiness, with 97% of business  owners and leaders feeling confident managing their workplace responsibilities, despite many operating with  process gaps that become highly exposed once challenged. 

Two in five businesses (44%), for example, have no clear approach to managing HR and people. This issue is  most pronounced among small businesses, where 38% manage HR on an ad hoc basis, compared to 14% of  medium and 11% of large businesses. Since wage theft became a criminal offence in January 2025, payroll  errors now carry potential criminal liability. Although 87% of businesses believe their payroll is accurate, more  than two in five (42%) have identified an error at some point, including nearly one in five (18%) who discovered  one in the past year. 

Citation Group recommends businesses take a few immediate steps to reduce their exposure: reviewing  employment contracts and policies, running a payroll compliance review, and training managers to recognise AI assisted grievances and respond appropriately. 

The full Workforce Pulse 2026 report explores the broader compliance pressures facing Australian businesses  across HR, payroll, legal and industrial relations, safety and psychosocial risk, technology systems, AI, migration  and certification readiness. To access the full report, visit citationgroup.com.au/workforcepulse.