Business groups have welcomed a NSW government plan to roll back a special protection for frontline workers who test positive for COVID-19.
Labor and the unions, however, are calling it harsh, unnecessary, and a "stab in the back" for workers.
Premier Dominic Perrottet on Sunday announced his intention to scrap a COVID-19 provision in the Workers Compensation Act, which creates a presumption that frontline workers who test positive caught the virus at work.
It makes it easier for workers in retail, healthcare, hospitality and other frontline industries to file a workers' compensation claim if they get sick.
"Now that the economy is steadily reopening, we want businesses investing in new staff and higher wages, not inflated insurance bills," Mr Perrottet said.
Peak employer association Ai Group is calling on other parties to back the legislation, which it describes as "timely and sensible".
"To continue to hold employers in some industries automatically responsible for an employee's COVID-19 infection is no longer sustainable," said NSW Ai Group head Helen Waldron.
"It is not fair and defies common sense to assume in those sectors that COVID-19 is overwhelmingly likely to have been caught at work."
Business Council supports move to remove compensation protection
Business Council chief executive Jennifer Westacott also backed the changes, saying when case numbers go up it won't always be clear where someone caught the virus.
Removing the presumption recognises that "we have to live alongside the virus".
But getting the amendment through parliament won't be smooth sailing, with Labor and the Greens criticising the plan.
It's a "stab in the back for the tens of thousands of workers fighting COVID", said Opposition industrial relations spokeswoman Sophie Cotsis.
"Mr Perrottet expects a hospital cleaner who fell sick fighting COVID to then have to fight (the public insurer) icare too," she said.
The government said leaving the protection in place could lead to 25,000 extra claims over the next year, forcing insurance premiums up by $950 on average.
All up, COVID-19 claims could cost the workers' compensation system up to $638 million over the coming year, the government said.
But these figures were questioned by Greens MP David Shoebridge, a key proponent of the protection.
"The cost to date has been less than $20 million and the government's initial estimate was that it would be more than $8 billion over four years," he told AAP.
He said if the amendment passes, it would be "next to impossible" for frontline workers to prove they ha picked up the virus at work.
'Harsh, heartless'
Unions NSW Secretary Mark Morey called on the government to reconsider the "harsh, heartless and unnecessary" change.
"Any savings to government will be tiny but the impact on individual workers will be massive," he said.
Meanwhile, NSW reported 195 new local cases on Sunday.
A Blue Mountains man in his 80s who received two vaccine doses but had underlying conditions died at Nepean Hospital after being infected at Springwood Hospital.
Some 224 people remain in hospital, with 32 in intensive care.
NSW Health will from Monday stop specifying whether new cases were locally acquired or came from overseas in its daily updates.
Since quarantine for international arrivals was ditched at the start of the month, it is harder to determine the origin of each case.
Some 91.1 per cent of people over 16 are fully vaccinated and 94.2 per cent of adults have had their first jab.
In the 12-15 age group, more than 80 per cent have had their first dose and 73.4 per cent both.
