SME Sector: "No Further Requests for Extension of the Act on the Promotion of Small and Medium Enterprises with Fewer Than 50 Employees After Two Years"

Emergency Press Conference on the 2-Year Postponement of the Serious Accidents Punishment Act on the Morning of the 27th

The small and medium-sized enterprise (SME) sector has stated that if the grace period for the 'Serious Accidents Punishment Act (hereinafter referred to as the Serious Accidents Punishment Act)' for workplaces with fewer than 50 employees is extended by two years, they will not request any further extensions. The SME sector also views the next two years as a ‘golden time’ for reducing serious accidents and has pledged to cooperate with the government and labor groups to create safer workplaces.

The Korea Federation of SMEs held a press conference on the 27th at the Korea Federation of SMEs headquarters in Yeouido, Seoul, to announce this position. The Serious Accidents Punishment Act was enacted on January 27 last year, but its enforcement was deferred for two years for workplaces with fewer than 50 regular employees or construction projects with a contract amount under 5 billion KRW. If this continues, the Act will apply to workplaces with fewer than 50 employees starting January 27 next year, one month from now.

So far, the SME sector has requested an additional grace period, citing that small businesses are not sufficiently prepared for the enforcement of the Serious Accidents Punishment Act. At the press conference, Jung Yun-mo, the full-time vice chairman of the Korea Federation of SMEs, said, "More than 830,000 workplaces with fewer than 50 employees are still not adequately prepared for the enforcement of the Serious Accidents Punishment Act due to chronic labor shortages, financial difficulties, and lack of information." In fact, a survey conducted by the Korea Federation of SMEs in August targeting 892 SMEs with fewer than 50 employees showed that 80% responded that they were ‘not prepared for the enforcement of the Serious Accidents Punishment Act.’ Only 18.8% said they were ‘substantially prepared,’ and just 1.2% said they had ‘completed all preparations.’

At the press conference held on the 27th regarding the 'Postponement of the Act on the Promotion of Small and Medium Enterprises with Fewer than 50 Employees,' Jung Yoon-mo, Executive Vice President of the Korea Federation of Small and Medium Business, is delivering a statement.

Vice Chairman Jung stated, "In this situation, if the Serious Accidents Punishment Act is applied to SMEs, business owners cannot avoid criminal penalties such as imprisonment for more than one year in the event of unintended accidents at the workplace." He added, "Unlike large corporations, if the CEO of an SME is detained or sentenced to imprisonment, most face the risk of closure, which also harms the workers."

Meanwhile, the government and the ruling party held a party-government council at the National Assembly on the same day and announced the ‘Support Measures for Vulnerable Enterprises with Fewer Than 50 Employees Regarding Serious Accidents.’ Regarding this plan, Vice Chairman Jung positively evaluated it, saying, "Conducting a comprehensive industrial safety diagnosis to survey the safety status of workplaces with fewer than 50 employees, establishing a joint safety manager support project for SMEs that find it difficult to directly hire safety managers, and implementing on-site customized consulting that breaks away from uniform content are expected to have a significant effect on reducing serious accidents."

The SME sector stated that based on these government policies, they will do their best to reduce the occurrence of serious accidents in industrial sites. Vice Chairman Jung said, "SMEs suffering from chronic labor shortages value each worker much more than large corporations. All SME owners agree that there should be no workers harmed by accidents at the workplace." He added, "We hope that the ruling and opposition parties will promptly pass the bill to extend the grace period for the Serious Accidents Punishment Act in the National Assembly to give SMEs time to improve their safety and health standards."