AI Use Policy: What Australian Businesses Must Include

Staff are already using AI at work, whether or not anyone approved it. Marketing drafts with one tool, support answers questions with another, and someone somewhere has pasted customer data into a chatbot.

An AI use policy is how you get in front of that with a few clear rules, and in 2026 it is the single most useful thing most Australian businesses can put in place.

This guide covers what an AI use policy is, what it must include, and how to roll it out so it actually changes behaviour. It is the practical companion to our wider guide on AI governance for Australian businesses.

Sentrient is an Australian-built GRC platform for compliance, risk and HR. See our policy templates and workplace compliance system, built for Australian and New Zealand workplaces.

What Is an AI Use Policy?

An AI use policy, sometimes called an AI acceptable use policy or workplace AI policy, is a short document that sets out how people in your business may and may not use artificial intelligence tools.

It names the approved tools, defines what data must never be entered, requires human review of AI output, and makes clear who is accountable.

It is not a technical manual and it is not a legal treatise. The best AI use policies are a page or two of plain rules that a new starter can read and follow on day one.

It is the document that turns good intentions about responsible AI into something staff can actually act on.

Why Every Australian Business Needs One in 2026

Two reasons, one practical and one regulatory.

The practical reason is risk. Staff can leak confidential or personal information into a public AI tool in seconds, and a model can produce a biased or confidently wrong output that someone relies on.

The accountability for that does not shift to the vendor. It stays with your business. A clear policy costs far less than dealing with the incident that can follow without one.

This is not hypothetical. In Microsoft and LinkedIn’s 2024 Work Trend Index, 75% of knowledge workers said they use AI at work, and 78% of them bring their own tools, often without their employer knowing, which puts company data at risk. The AI is already in your business. The only real question is whether there are any rules around it.

The main reason for creating an AI use policy is the regulations. Australia has no standalone AI law, so existing laws such as the Privacy Act already apply to how you use AI. The Government’s Voluntary AI Safety Standard sets out 10 guardrails for responsible AI, and from 10 December 2026 businesses covered by the Privacy Act must disclose automated decision-making that significantly affects people. A written AI use policy is how you show you are managing all of this on purpose, not by accident.

What an AI Use Policy Must Include

Whatever its length, a workable AI use policy covers these core clauses.

The Data Rules That Matter Most

If you write only one clause well, make it this one. The fastest way to cause harm with AI is to feed the wrong data into a tool that was never approved for it.

At a minimum, your policy should state that staff must not enter personal information about customers or employees, confidential or commercially sensitive information, or anything covered by a contract or law, into a public AI tool. The OAIC’s guidance on commercially available AI products sets clear expectations here, and it ties directly to your obligations under the Privacy Act. Pair the rule with a short list of what counts as sensitive, so people do not have to guess.

Human Oversight and Prohibited Uses

AI should assist decisions, not make the ones that matter on its own. Your policy should require a person to check AI output before it is relied on or sent externally, and it should name the uses where AI must not be the decision-maker, such as hiring, dismissal, credit or anything that significantly affects a person’s rights.

This connects to the December 2026 automated-decision transparency rule: if AI helps make a decision that significantly affects someone, you will need to disclose it, and you will want a human clearly in the loop.

Roles, Acknowledgement and Review

A policy nobody has accepted is not a control. Name an owner who keeps the policy current, require every staff member to read and acknowledge it, and record that acknowledgement so you can show it later. Set a review cycle, because the tools and the rules will both change faster than most policies do.

How to Roll Out an AI Use Policy

• Keep it to a page or two in plain English, so people actually read it
• Tell staff what it is for before you publish it, then behave consistently with it
• Collect and record acknowledgement from everyone, including contractors
• Pair it with short training so people know what the rules mean in practice
• Review it on a set cycle and whenever a major new tool arrives

Common AI Use Policy Mistakes

• Writing a policy nobody acknowledges, so there is no evidence it was accepted.
• Vague data rules that leave staff guessing what counts as sensitive.
• No named owner, so the policy goes stale as tools change.
• Treating it as IT-only, when the biggest risks are in HR, privacy and customer decisions.
• Never reviewing it, so it describes tools nobody uses and misses the ones they do.

Where Sentrient Fits

Sentrient is where an AI use policy becomes real and provable. It holds the policy with individual acknowledgements so you can show every staff member accepted it, assigns and tracks the training that goes with it, and keeps the records retrievable when a regulator, client or insurer asks.

Because it sits inside the wider workplace compliance system, your AI policy lives alongside the rest of your governance, risk and compliance evidence rather than in a separate file. Writing the policy is the easy part. Making it accepted, trained and provable is the part Sentrient is built for.

See your AI use policy acknowledged, trained and tracked in one place.

One Page, Done Properly

An AI use policy does not need to be long. It needs to be clear, accepted and kept current: approved tools, firm data rules, a human in the loop, a named owner, and a record that staff signed on. Get that in place and add the December 2026 disclosure to your plan, and you are ahead of most Australian businesses your size.

Frequently Asked Questions

1. What is an AI use policy?

An AI use policy is a short document that sets the rules for how staff may use AI tools at work: which tools are approved, what data must never be entered, when a human must check the output, and who is accountable. It is the practical core of AI governance.

2. What should an AI use policy include?

Purpose and scope, approved tools and how new ones get approved, data rules on what must never be entered, human oversight requirements, prohibited uses, an accountable owner, breach reporting, and a review cycle. It only works if staff have read, accepted and recorded their acknowledgement.

3. Does my small business need an AI use policy?

Yes. Any business whose staff use AI tools needs one, whatever its size. The risks, such as leaking personal data into a public tool or relying on a biased output, apply regardless of headcount, and the policy can be a single page.

4. Is an AI use policy legally required in Australia?

There is no standalone AI law requiring a specific policy, but existing laws such as the Privacy Act apply to how you use AI, and from 10 December 2026 businesses must disclose automated decisions that significantly affect people. A written policy is how you show you are meeting those obligations deliberately.

5. What data should staff never put into AI tools?

Personal information about customers or employees, confidential or commercially sensitive information, and anything covered by a contract or law, unless the tool has been specifically approved for it. The OAIC’s guidance on commercially available AI products sets clear expectations.

6. Who should own the AI use policy?

A named person, usually in HR, risk or compliance, who keeps it current, ensures staff acknowledge it, and reviews it as tools change. IT input helps, but the biggest risks sit in HR, privacy and customer decisions, so it should not be IT-only.

7. How does Sentrient help with an AI use policy?

Sentrient holds the policy with individual acknowledgements so you can prove staff accepted it, assigns and tracks the related training, and keeps audit-ready records. It makes an AI use policy real, accepted and provable, inside your wider compliance system.

Sources

• Department of Industry, Science and Resources, Voluntary AI Safety Standard
• Department of Industry, Science and Resources, The 10 guardrails
• Microsoft and LinkedIn, 2024 Work Trend Index
• OAIC, Guidance on privacy and the use of commercially available AI products
• OAIC, Transparency in automated decision-making

Related Reading

• AI Governance for Australian Businesses
• The Importance of HR Policies and Procedures
• Records Management and Privacy Act Compliance in Australia
• Sentrient Workplace Compliance System