The State Insurance Regulatory Authority (SIRA) has issued Woolworths Group Limited a $50,000 civil penalty for underpaying injured workers, the maximum available for a single contravention under the Workers Compensation Act 1987. SIRA announced the penalty on 28 September 2026, acting on a penalty letter dated 22 September 2026.
The regulator found that Woolworths failed to make weekly payments in accordance with sections 36 and 82A of the 1987 Act, resulting in a breach of its self-insurer licence.
The failures originated at a single operational point. According to SIRA's penalty letter, indexation was not applied across all applicable claims when Woolworths transitioned to a new claims management system, producing underpayments across the company's entire self-insurance portfolio rather than in isolated files.
Woolworths lodged its December 2025 self-audit, conducted by an independent auditor, with SIRA on 10 February 2026. The audit flagged 20 claims where the auditor could not determine how weekly payments had been calculated, or why the earnings figures applied did not match payroll data.
SIRA issued a notice under section 238AA of the Workplace Injury Management and Workers Compensation Act 1998 on 16 March 2026, requiring full payment details for each claim, including how pre-injury average weekly earnings (PIAWE) had been calculated, the evidence relied upon, and whether indexation had been applied.
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Woolworths responded on 30 March 2026, confirming that workers had not been correctly paid and acknowledging that the problem was systemic. A portfolio-wide review of indexation-eligible claims was under way.
After a show cause notice on 26 June 2026 and a written submission from Woolworths on 13 July 2026, SIRA confirmed its findings across the 20 audited claims: 13 underpaid through indexation errors, three underpaid through both indexation and weekly payment calculation errors, one underpaid through calculation errors alone, and three with either no breach or a breach that favoured the worker.
The penalty letter recorded that the matter "revealed deficiencies in the systems, controls, and oversight arrangements relied upon to ensure ongoing compliance with statutory payment obligations", and found that those deficiencies extended beyond the 20 audited claims into the wider portfolio.
Woolworths has made admissions of the breaches, and SIRA states that corrections to payments have been made to all affected workers following its intervention. The regulator said it will continue to engage closely with the company to monitor compliance with its legislative obligations and licence conditions.
The penalty letter recorded that Woolworths accepted "ultimate statutory responsibility for the management of its claims and the accuracy of payments made to workers, despite any third-party administrator in place and transition of claims between administrators."
A self-insurer cannot move compliance liability to a third-party administrator (TPA). The licence holder retains the legal exposure regardless of who handles claims day to day, and that exposure does not pause during a handover. SIRA has applied the same reasoning in a recent letter of censure to another self-insured retailer, issued under section 183A(1)(b) of the 1987 Act, a matter examined in this analysis of how administrator transitions carry regulatory risk for self-insured employers.
SIRA imposed special licence conditions on Woolworths in October 2025 after an audit under section 202A of the 1987 Act found the company high risk across three components: compliance, case management, and data quality. The penalty letter referenced that regulatory history directly in its reasoning, and the conditions attached at the time required Woolworths to work to a remediation plan approved for its self-insurer licence.
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Special conditions were also applied to Thomas Foods International Consolidated with effect from 31 August 2025 and to Kelsian Group Limited from 14 July 2025. Eighteen insurers across the scheme were subject to special licence conditions at the end of the December 2025 quarter, according to SIRA's quarterly account of enforcement activity across the NSW schemes.
SIRA fined Liverpool City Council $20,000 in September 2025 for failing to notify the regulator that a hard drive likely containing workers compensation personal information had been lost. In the same month, Tomago Aluminium Company received $20,000 for breaches of sections 37 and 38 of the 1987 Act identified in a February 2025 audit, and a separate $11,000 penalty for failing to produce documents by the date required under section 238AA of the 1998 Act.
At $50,000 for a single contravention, the Woolworths penalty is the largest of the three.
SIRA's FY2025-26 regulatory priorities, published in July 2025, name intelligence-led, risk-based regulatory action as one of three overarching themes for the year. Its three-year SIRA 2028 strategy, launched in February 2025, lists holding regulated entities to account as a core goal.
The sequence in the Woolworths matter shows how that operates. An independent self-audit surfaced unexplained payment discrepancies, SIRA pursued them through a formal notice process, and the escalation ran to the maximum civil penalty available for a single contravention, without the self-insurer having identified the problem first.
SIRA's public insurer register, updated 22 May 2026, lists 77 licensed self-insurers in New South Wales across 34 single and 43 group licences, spanning retail, manufacturing, logistics, healthcare, and local government. Each of those licences carries the statutory obligations that the Woolworths letter tested, and the audit and notice process that produced the penalty applies to all of them in the same sequence.
