[Reporter’s Notebook] Small Business Owners Exposed to 'Serious Accident Act' Scams

Lee Seung-jin, reporter for the Bio, Startup, and Venture Department

“I almost got scammed without knowing anything.”

A female small business owner, Ms. A, who runs a cafe with five part-time workers in Gangnam-gu, Seoul, showed the reporter an email she received from a consulting company earlier this month, her face flushed. Her voice rose as she said, “Companies are aggressively trying to exploit self-employed people who are anxious about the Serious Accident Punishment Act.”

The email Ms. A showed stated that “from January 27, the Serious Accident Punishment Act (SAPA) will apply to workplaces with fewer than 50 employees, so you must complete the mandatory legal training before then. Reply to this email to receive information about the training costs.” Startled, Ms. A replied, but later heard from an acquaintance that “neighborhood cafes are not subject to SAPA penalties,” which confused her even more. Ms. A has not made any payment requested by the company.

The consulting company’s email was a deception aimed at Ms. A. According to the Framework Act on Small and Medium Enterprises, small business owners with fewer than 10 regular employees are exempt from SAPA. Moreover, SAPA itself does not include any mandatory legal training requirements. The so-called consulting company that sent the email is a scammer trying to exploit small business owners who are not well-versed in the law.

This is not an isolated case affecting only Ms. A. Currently, on online cafes for small business owners, scam posts related to SAPA and inquiries about the law from small business owners are posted daily. Advertisements about the so-called “mandatory legal training” and consulting ads claiming to “help prevent the law’s application” are rampant, using the same tactics that almost trapped Ms. A.

When the reporter inquired about this issue with the Ministry of Employment and Labor and the Ministry of SMEs and Startups, the only response was that they have “no authority to crack down.” The government is currently focusing its policy on how small and medium enterprises newly subject to SAPA should prepare. Small business owners exposed to these new types of scams, which are spreading like poisonous mushrooms behind the scenes of the law, are being neglected.

Not only the ministers of the Ministry of SMEs and Startups and the Ministry of Employment and Labor but also President Yoon Seok-yeol have requested the National Assembly to postpone the full application of SAPA for two more years. While the postponement is important, the government’s role is not limited to just appealing to the National Assembly for a delay. The government must also consider the difficulties faced by small business owners and micro-entrepreneurs who are too busy with their livelihoods and lack legal knowledge to properly understand SAPA. If the government has no authority to crack down on scam operations claiming to offer consulting, it should at least provide more accurate information about SAPA itself. There are only nine days left until the full enforcement of SAPA for workplaces with fewer than 50 employees.