Occupational Safety and Health Regulatory Compliance Costs: A Structured Literature Review with Insights from Malaysia
List of Authors
Mohd Rafee Baharudin, Normaziah Mohd Nor, Zildawarni Irwan
Keyword
Occupational Safety and Health (OSH), Regulatory Compliance, the OSHA 1994 (Act 514) and its 2022 Amendment (Act A1648), Economic Impact, Compliance Costs, Malaysia’s Industrial Sector
Abstract
Malaysia’s Occupational Safety and Health Act (OSHA) 1994 and its 2022 Amendment (Act A1648) have introduced stricter compliance requirements that carry significant economic implications for industry. While improved safety outcomes are anticipated, the financial burden of compliance, particularly for small and medium-sized enterprises (SMEs) and high-risk sectors, remains underexplored. This paper presents a structured literature review synthesising evidence from international databases, Malaysian regulatory documents, and industry reports to identify key components of occupational safety and health (OSH) compliance costs. The review categorises these costs into direct (e.g., training, personal protective equipment, OSH personnel, machinery certification) and indirect (e.g., administrative burdens, productivity losses, litigation risks) expenditures. Findings show that larger firms benefit from economies of scale, whereas SMEs face disproportionate financial strain, which may hinder competitiveness and long-term sustainability. Despite high initial outlays, compliance yields long-term benefits, including fewer workplace accidents, reduced insurance premiums, improved workforce stability, and enhanced corporate reputation. This study highlights the need for targeted policy support and financial mechanisms to enable SMEs to comply effectively while maintaining operational efficiency. By mapping cost structures and their economic impacts, this review provides critical insights for regulators, industry stakeholders, and scholars concerned with the balance between workplace safety and economic performance in Malaysia.