New ACT laws give employers and insurance companies unprecedented powers to "spy on workers", UnionsACT says.

Legislation passed last week allows surveillance of employees outside of the workplace where there is a belief they are engaged in unlawful activity related to their job.

But the surveillance must first be approved by a magistrate.

UnionsACT chief Alex White said the law covers 160,000 Canberra workers.

"Under these new laws it is easier for an employer or an insurance company to covertly spy on their workers at home," he said.

"If someone has done the wrong thing, if they are breaking the law or engaging in criminal activity, the appropriate agency to investigate that is the police, it's not the employer or insurance company.

"This is incredibly serious, it is deeply troubling and we are not going to stand for it."

But Justice Minister Shane Rattenbury said there were still strict safeguards in place to ensure workers' rights to privacy.

"These rules have been put in place to prevent fraud in the workplace which of course costs all of us," he said.

"But there are important safeguards there with the requirement for a magistrate to permit any sort of surveillance that is undertaken.

"We also worked very closely with the Human Rights Commission to make sure that these rights, these new powers, were compliant."