SHO Order 1997 Malaysia: When Does Your Factory Need a Safety and Health Officer?

This applies to you if your factory employs 100 or more workers in a gazetted industry. Or if your construction project exceeds RM20 million. Or if you run a chemical plant, gas processing facility, or metal works operation of a certain size.

The Occupational Safety and Health (Safety and Health Officer) Order 1997 spells out exactly which industries and at what employee thresholds you must appoint a registered SHO. If the Order applies and you don't have one, the penalty under the OSHA Amendment 2022 is a fine up to RM50,000, imprisonment up to six months, or both.

Below, we'll walk through every industry class in the Order, what counts as an "employee" for threshold purposes, and how the 2022 Amendment changed the stakes.

The Industry Classes and Employee Thresholds

Paragraph 3 of the SHO Order 1997 lists specific industry classes. The threshold varies by industry because different operations carry different risk profiles.

Industry Class	SHO Required When
Building operations	Total contract price exceeds RM20 million
Works of engineering construction	Total contract price exceeds RM20 million
Shipbuilding	100+ employees at peak of work
Gas processing or petrochemical	100+ employees
Chemical or allied industries	100+ employees
Boiler or pressure vessel manufacturing	100+ employees
Metal industry (stamping, blanking, shearing, bending)	100+ employees
Wood working industry (cutting, sawing, planing, moulding, sanding, peeling)	100+ employees
Cement manufacturing	100+ employees
Any other manufacturing activity not listed above	500+ employees

That last row catches many factory operators off guard. If your manufacturing activity isn't specifically named (chemicals, metals, wood, cement, boilers), the threshold jumps to 500 employees. But if it IS named, the threshold is 100.

How to Count "Employees"

The Order defines "employee" broadly. It includes independent contractors engaged by the employer, self-employed persons, and employees of independent contractors. This is wider than most people expect.

Count These	Don't Count These
Permanent employees at the workplace	Workers at other company locations
Contract workers who work regularly on site	Off-site administrative staff
Independent contractors and their employees	Occasional visitors or one-time service providers
Temporary staff assigned to the workplace	Delivery personnel who don't remain on site

The count applies per workplace, not per company. A company with 80 workers at one factory and 80 at another doesn't need an SHO at either site (assuming the same gazetted industry). Each site is assessed independently.

For construction, the threshold uses "peak of work" for some classes. This means the maximum number of workers present on site at any one time during the project. Plan your SHO appointment based on projected peak workforce, not day-one headcount.

SHO vs OSH Coordinator: Which Do You Need?

The OSHA Amendment 2022 (effective 1 June 2024) introduced a new requirement: every workplace with 5 or more employees must appoint an OSH Coordinator, unless the workplace already has an SHO.

Feature	SHO (Safety and Health Officer)	OSH Coordinator
When required	Gazetted industries meeting SHO Order 1997 thresholds	All workplaces with 5+ employees not requiring an SHO
Qualification	DOSH-registered, Green Book holder	Attended DOSH-approved coordinator training
Employment	Must be employed "solely" for OSH at the workplace (Section 29(3))	Can be an existing employee with coordinator role added
Full-time?	Yes, dedicated role	No, can be part-time or engaged externally
Penalty for non-appointment	Fine up to RM50,000, imprisonment up to 6 months, or both	Same penalty range

If the SHO Order applies to you, appointing an OSH Coordinator doesn't satisfy the requirement. You need a registered SHO. The coordinator role only applies to workplaces that fall outside the SHO Order's scope.

What an SHO Actually Does

The SHO's duties are defined under Regulation 18 of the SHO Regulations 1997. This isn't a suggestion list. These are statutory requirements that DOSH inspectors check during audits.

The core duties include advising the employer on OSH measures, inspecting the workplace, investigating accidents and near-misses, coordinating safety training, and preparing the annual OSH plan. Under Section 29(3) of OSHA 1994, the SHO must be employed "solely" for this purpose.

Monthly Reporting Requirement

Regulation 19 requires the SHO to submit a monthly report to the employer by the 10th day of each month. The report must cover actions taken to comply with OSHA 1994, measures to maintain safe working conditions, accident statistics, training conducted, and outstanding safety issues with recommendations.

Many employers miss this requirement. When DOSH inspectors ask for evidence of systematic safety management, the monthly SHO reports are one of the first things they check. Missing reports = evidence that your SHO isn't functioning properly.

Multiple Sites? You May Need Multiple SHOs

The regulations require the SHO to be employed at "the place of work." If you have three factories, each with 100+ employees in a gazetted industry, each factory needs its own SHO. One SHO covering three sites dilutes effectiveness and may not satisfy the "solely employed" requirement under Section 29(3).

This is a cost question that catches growing companies. When your second factory crosses the threshold, you need a second SHO. Budget for it before the headcount hits 100.

What Happens If You Don't Appoint an SHO

Consequence	Details
Direct penalty	Fine up to RM50,000, imprisonment up to 6 months, or both (OSHA Amendment 2022)
DOSH enforcement	Improvement notice requiring immediate appointment; stop-work order if non-compliance continues
Insurance implications	Non-compliance with OSHA may affect claim outcomes; insurers assess regulatory compliance as part of risk evaluation
Incident liability	If a workplace accident occurs without a required SHO in place, the employer faces heightened liability for negligence

FAQ

Does the 100-employee threshold include foreign workers?

Yes. The Order's definition of "employee" includes independent contractors and their employees. Nationality doesn't matter. Count everyone who works regularly at the workplace.

My factory has 95 workers. Am I safe?

For now, yes, if you're in one of the named industries. But you still need an OSH Coordinator under the Amendment 2022 (5+ employees). And if your headcount grows past 100, the SHO requirement kicks in immediately. Don't wait until you're at 100 to start recruiting.

Can I appoint an external SHO instead of hiring one?

Section 29(3) of OSHA 1994 says the SHO must be "employed" at the place of work. This implies a direct employment relationship, not an external consultant arrangement. Some employers interpret this strictly as full-time employment. Check with DOSH for current guidance on your specific situation.

How do I know if my manufacturing activity is "named" or falls under the 500-employee catchall?

The Order specifically names: gas processing, petrochemical, chemical, boiler/pressure vessel manufacturing, metal works (with stamping/blanking/shearing/bending), wood working (with cutting/sawing/planing/moulding/sanding/peeling), and cement manufacturing. If your activity doesn't match these descriptions, the threshold is 500. Electronics assembly, food processing, plastics moulding, and textile manufacturing would fall under the 500-employee catchall.

What's the penalty for having an unregistered person act as SHO?

Under Regulation 4 of the SHO Regulations 1997, no one may act as an SHO unless registered with DOSH. For information on the Green Book registration pathway, see our dedicated guide.

Foundation Conclusion

If the SHO Order 1997 applies to your workplace, it's because your operations are large enough and hazardous enough that the government considers dedicated safety oversight non-negotiable. That same risk profile is exactly what property and liability insurers look at when evaluating your coverage needs.

Don't treat the SHO appointment and your insurance programme as separate items. They're both responses to the same underlying risk.

Talk to our risk specialists about insurance for SHO-mandated operations

Disclaimer: This article provides general guidance based on OSHA 1994 (Amendment 2022), the Safety and Health Officer Order 1997, and the SHO Regulations 1997 as of March 2026. Regulations may be amended. Always verify current requirements with DOSH (JKKP) before making compliance decisions.