Manufacturing Industry Hit Harder: "Up to 80% of Workers May Qualify for Industrial Accident Compensation"

Corporate Burden Expected to Increase by Trillions of Won

[Asia Economy Reporter Yu Je-hoon] The government’s significant expansion of the scope of musculoskeletal disorders presumed to be industrial accidents among workers in the automobile, shipbuilding, and tire industries is expected to increase corporate burdens by trillions of won. It is anticipated that 8 out of 10 workers in these industries will become potential subjects. In particular, there is criticism that the policy was hastily pushed forward without sufficient social consensus, despite the possibility of severe on-site confusion, encouragement of moral hazard, and increased burdens on companies.

On the 21st, the Korea Employers Federation announced that it submitted a business sector opinion letter demanding the withdrawal of the Ministry of Employment and Labor’s administrative notice on the “Revision of the Notification on the Recognition Criteria for Musculoskeletal Disease Industrial Accidents” issued the previous day. The core content of the Ministry’s proposed revision is the introduction of the “principle of presumption,” which recognizes certain diseases as occupational diseases if workers in specific industries or occupations meet a certain period of employment and apply for industrial accident recognition for diseases designated by the Ministry.

The problem is that the new recognition criteria are set without clear medical evidence, which could significantly increase the number of industrial accident subjects. Especially in companies with high average tenure, such as those in the shipbuilding, automobile, and tire industries, a large proportion of workers fall under the application of the principle of presumption. According to a case investigated by the Korea Employers Federation at one company, 50.4% of all production workers met the conditions for rotator cuff tear. Carpal tunnel syndrome applied to 41.0%, and herniated intervertebral disc to 36.9% of workers.

Concerns have also been raised about the occurrence of “moral hazard,” where asymptomatic patients massively apply for industrial accident recognition. According to a research paper cited by the Korea Employers Federation, among people diagnosed with rotator cuff disease through ultrasound and magnetic resonance imaging (MRI), the proportion of asymptomatic patients without pain exceeded 50%. Considering that asymptomatic patients do not necessarily require treatment and that the medical community generally advises avoiding overdiagnosis and unnecessary procedures or surgeries, there is a high possibility that this will lead to moral hazard.

The Korea Employers Federation pointed out, “If the notification revision passes, 70-80% of production workers at the relevant workplaces will be subject to the principle of presumption, which could lead to indiscriminate approval of industrial accidents and the spread of moral hazard issues.” They added, “This will reduce companies’ motivation to improve working environments and lead to repeated government sanctions on workplaces, causing serious side effects.”