Appeal Released by SME Industry "Urgent Resolution of Current Issues Needed" (Comprehensive)

"Urgent Need for Supplementary Measures on the 52-Hour Workweek"... Appeal from 16 SME Organizations
Small and Medium Business Council Announces Position on 'Key SME Issues'

Kim Ki-moon, President of the Korea Federation of SMEs (fifth from the left), Jung Dal-hong, President of the Korea Association of Mechanical Equipment Construction (fourth from the left), and Park Mi-kyung, President of the Women Venture Association (third from the right), are delivering an appeal statement at the 'Press Conference on Major Issues of Small and Medium Enterprises' held on the 9th at the Korea Federation of SMEs building in Yeongdeungpo-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

"Due to the prolonged COVID-19 pandemic, sales have plummeted, and workers are gradually losing their jobs one by one. In a situation where it is uncertain when the crisis will end, urgent resolution of small and medium-sized enterprises' (SMEs) pressing issues is necessary to help them overcome liquidity crises, lead proactive investment expansion, and create jobs in the post-COVID era," appeals the SME sector. The key urgent issues identified include the prompt legislative supplementation and extension of the grace period for the 52-hour workweek system, cautious legislation of the Serious Accidents Punishment Act, and the establishment of separate credit rating standards for SMEs affected by COVID-19.

On the 9th, the Korea Federation of SMEs Associations (Chairman Kim Ki-moon) announced a statement titled "Position on Major SME Issues" at the Korea Federation of SMEs in Yeouido, Seoul. Sixteen SME organizations, including the Korea Federation of SMEs, Korea Mechanical Equipment Construction Association, Korea Women Entrepreneurs Association, Korea Federation of Small and Medium Business, Korea Women Venture Association, Korea Management Innovation SME Association, and Korea SME Convergence Central Association, participated together.

The SME sector first expressed concerns regarding the 52-hour workweek system, citing a survey by the Federation which found that 39% of SMEs were unprepared for the introduction of the 52-hour workweek due to COVID-19, and 83.9% of companies working beyond 52 hours were not ready. In particular, they stated, "Traditional manufacturing industries, including root industries, and small construction companies find it difficult to secure skilled on-site technicians, and even foreign workers cannot enter the country, making normal factory operations and construction work difficult." The industry requested that, with the grace period for the 52-hour workweek ending this year, the government activate on-site consulting for sectors such as shipbuilding, construction, and root industries where adjusting working hours is difficult or chronic labor shortages exist, provide corrective guidance, and devise effective manpower support and wage compensation measures.

In the appeal, the industry noted, "Supplementary legislation including the extension of the flexible working system to six months and the extension of the selective working system in research and development fields to three months has passed the National Assembly's Environment and Labor Committee," and urged, "We hope the plenary session of the National Assembly will promptly finalize the approval." Kim Ki-moon, chairman of the Korea Federation of SMEs, appealed, "The root industry, which suffers from severe labor shortages, operates with two shifts, but if the 52-hour system is implemented, it must switch to three shifts. This requires additional manpower, but it is impossible to find extra workers. Especially in shipbuilding, construction, and mechanical equipment sectors, outdoor work is frequent and inevitably affected by weather, so reducing working hours makes meeting delivery deadlines difficult."

Kim Ki-moon, President of the Korea Federation of SMEs, along with officials from the Council of Small and Medium Business Organizations, are attending the 'Press Conference on Key Issues of Small and Medium Enterprises' held on the 9th at the Korea Federation of SMEs Building in Yeongdeungpo-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

Regarding the Serious Accidents Punishment Act, while agreeing with the law's purpose of preventing industrial accidents and ensuring worker safety, the industry pointed out that the Industrial Safety and Health Act, which was strengthened earlier this year, is already in effect. They emphasized that if penalties against business owners are enforced in addition to fines on corporations, SMEs could be forced to close, so legislation must consider the realities of SMEs. The appeal stated, "To avoid at least three years of criminal punishment when a serious accident occurs, business owners must comply with 1,222 obligations under the Industrial Safety and Health Act," and added, "Punishing companies is not the solution. The enactment of the Serious Accidents Punishment Act should be halted, and accident prevention policies focused on guidance and prevention that consider SME workplaces should be developed." Chairman Kim said, "99% of SMEs are owner-operated. When an accident occurs, the SME owner must manage the incident and handle follow-up measures," and warned, "If the new Serious Accidents Punishment Act is enforced, SMEs will inevitably have to close."

Additionally, the industry expressed concerns that since most SMEs expect decreased sales due to COVID-19, if next year's credit evaluations are based on this year's sales, credit rating downgrades could lead to increased loan interest rates, reduced credit limits, and inability to extend loan maturities. Since COVID-19 is a temporary natural disaster beyond the companies' fault, the industry argues that next year's credit evaluations should be based on the highest sales in the past three years or increase the weight of non-quantitative assessments, thereby establishing separate credit evaluation criteria. The industry stated, "79.3% of SMEs believe that separate credit evaluation criteria such as the highest sales in the past three years are necessary for next year," and requested, "Please reduce the credit rating score weight in public institution bidding evaluation items to enable SMEs facing difficulties to participate in the procurement market."

Chairman Kim Ki-moon said, "Although we overcame a major crisis through swift and diverse government measures such as extending SME loan maturities, four rounds of supplementary budgets, emergency management stabilization funds, additional special guarantees, and expanded employment retention subsidies, as COVID-19 prolongs, companies' sales are sharply declining and workers are losing jobs one by one," and emphasized, "In a situation where it is uncertain when the crisis will end, urgent resolution of SMEs' pressing issues is necessary to overcome liquidity crises and lead proactive investment expansion and job creation in the post-COVID era."

This content was produced with the assistance of AI translation services.