Chairman Kim Ki-moon: "Preparing the Serious Accident Punishment Act for Workplaces with Fewer Than 50 Employees Requires at Least 2 More Years"

Urgent Call to Postpone Enforcement of Serious Accident Punishment Act for Workplaces with Fewer Than 50 Employees

Kim Ki-moon, chairman of the Korea Federation of Small and Medium Business (KOSME), stated that workplaces with fewer than 50 employees need at least two more years to prepare for the application of the Serious Accidents Punishment Act (hereinafter referred to as the Serious Accidents Punishment Act). The Serious Accidents Punishment Act has been in effect since January 27 last year, but a two-year grace period was granted for workplaces with fewer than 50 regular employees or construction projects with a contract amount under 5 billion KRW. As the application date approaches in about two months, the small and medium business sector is urgently calling for an additional grace period.

Before departing on the 20th, Chairman Kim told reporters, "The National Assembly’s Legislation and Judiciary Committee is discussing whether to extend the grace period for companies with fewer than 50 employees under the Serious Accidents Punishment Act. The National Assembly must reflect the desperate voices of the small and medium business community and ensure that the grace period is granted."

Kim Ki-moon, Chairman of the Korea Federation of SMEs / Photo by Yoon Dong-joo doso7@

The Serious Accidents Punishment Act imposes penalties of imprisonment for more than one year or fines up to 1 billion KRW on business owners or management officials who neglect their duty to ensure safety and health when a serious accident such as a fatality occurs. Starting next January, workplaces with fewer than 50 employees will also be subject to this law. Chairman Kim explained that if the law is applied to small-scale workplaces as is, many small and medium enterprises will face severe management crises. He said, "In small and medium enterprises, business owners perform multiple roles such as sales, production, and management. If the business owner is detained or sentenced to imprisonment, there is a high possibility of business closure, and workers may lose their jobs."

In particular, since business owners in small and medium enterprises mostly oversee and manage the workplaces directly, they are already subject to imprisonment or other penalties under the Industrial Safety and Health Act when worker accidents occur, Chairman Kim added. He argued that forcibly applying the Serious Accidents Punishment Act on top of already strong penalties does not help prevent serious accidents.

Therefore, the small and medium business sector says more time is needed for thorough preparation, as the majority of small and medium enterprises are still inadequately prepared. According to a survey by KOSME in August, 80.0% of workplaces with fewer than 50 employees responded that they are "not yet prepared," and 85.9% said "an extension of the grace period is necessary." Chairman Kim said, "We are not asking for an indefinite grace period, but we believe at least two years are needed for thorough preparation. Since companies with fewer than 50 employees lack professional personnel, even if they receive government consulting or attend briefings, it is very difficult to understand and apply the information on-site."

In fact, even if they try to hire safety professionals, it is difficult for small and medium enterprises to find such personnel because large companies have already hired many. Although labor costs are burdensome, there is no government support. Chairman Kim pointed out, "According to Article 16 of the Serious Accidents Punishment Act, the government is supposed to provide support to business owners, but judging from the current situation, all responsibility for serious accidents is being placed on the business owners."

Chairman Kim also said, "Although the government is making efforts, there are shortcomings in support such as consulting, considering that there are about 830,000 workplaces with fewer than 50 employees. For example, safety and health management system consulting has been provided to about 16,000 workplaces since February this year, but this accounts for only 1.9% of all workplaces with fewer than 50 employees."

The small and medium business sector insists that a government-wide 'Serious Accident Prevention Roadmap for Workplaces with Fewer than 50 Employees' must be established to prevent serious accidents. Before applying the law to workplaces with fewer than 50 employees, a support project for safety and health management personnel in small and medium enterprises should be created, and institutional improvements such as minimizing price-centered bidding systems for public sector construction projects should be pursued. Chairman Kim said, "If a grace period is granted, the small and medium business sector will also expand safety investments by conducting its own training and actively strive to receive as much government consulting as possible."