Serious Accident Punishment Act Includes Stores with Fewer Than 5 Employees, Extending to Marts and Restaurants... "Are You Telling Us Not to Do Business?" Backlash

Ruling and Opposition Parties Move to Strengthen Serious Accident Punishment Act
Bill to Take Effect Next Year if Passed as Is
Small Business Owners and Micro Enterprises 'Bewildered' "Excessive"
Ministry of SMEs and Startups to Provide Trillions in Consulting and Facility Support

The owner is preparing for business at a restaurant in downtown Seoul. Photo by Hyunmin Kim kimhyun81@

"I didn't know much about the Serious Accident Punishment Act, but to hear that it applies even to small gimbap shops like ours is just bewildering. In these difficult times due to COVID-19, punishing and burdening us one by one feels like telling us not to do business at all."

The political movement to strengthen the Serious Accident Punishment Act is becoming serious. Since the law was enacted last month, amendment bills have been rapidly proposed to include workplaces with fewer than five regular employees as subjects of application. Small business owners and micro-enterprises, who thought they were excluded from the scope of the Serious Accident Punishment Act, have expressed concerns that this will increase the burden on business owners amid the already difficult situation caused by COVID-19.

◆ Amendment Bill Proposed to Apply to Workplaces with Fewer Than Five Employees Starting Next Year = Recently, 10 lawmakers from both ruling and opposition parties, including Kang Min-jung of the Democratic Party of Korea, proposed an amendment bill to delete the exemption clause for workplaces with fewer than five regular employees under the Serious Accident Punishment Act. This shows their intention to expand the law's application to virtually all workplaces with fewer than five regular employees. Regular employees refer to ‘workers under the Labor Standards Act,’ including fixed-term, daily, and foreign workers. Kang’s office argued that 35.4% (312 people) of all industrial accident deaths in 2020 occurred in workplaces with fewer than five employees, and excluding them from the law’s application could reduce its effectiveness.

The Serious Accident Punishment Act punishes business owners (management responsible persons) when serious accidents occur due to inadequate safety and health management, causing serious harm to workers or citizens. In the event of a worker’s death, the penalty is imprisonment for one year or more or a fine of up to 1 billion KRW. If two or more workers suffer injuries requiring treatment for six months or longer from the same accident, the penalty is imprisonment for up to seven years or a fine of up to 100 million KRW. If the amendment bill led by Kang is passed as is, from January 27, 2023, small business owners and self-employed operators running general restaurants, marts, pubs, etc., with fewer than five employees could be punished if casualties occur at their workplaces. The same applies to local delivery agencies employing delivery riders who are platform workers. Although platform workers are not considered regular employees, they are included in the category of workers that business owners must protect.

[Image source=Yonhap News]

A representative from Kang’s office said, "Business owners can be punished if they fail to fulfill their safety and health obligations," adding, "Since most industrial accidents occur in workplaces with fewer than 50 employees, we believe the law’s enforcement should be advanced by even one year." Kang Eun-mi of the Justice Party also proposed a bill to include ‘mental health’ protection in addition to life and physical safety and to expand the law’s application to workplaces with fewer than five employees, arguing that the scope of the law had been narrowed compared to earlier bills.

◆ Small Business Owners Oppose Punishment of Employers with Fewer Than Five Employees = Upon hearing about the bill’s promotion, small business owners expressed significant concerns. Kim (71), who runs a gimbap shop, said, "In this small place, employees might slip or get hurt by mistake," adding, "If the business owner is held responsible every time, I don’t know how we’re supposed to run a business in the future." He also appealed, "If someone abuses the law, small business owners could suffer unfair damage." Lee (57), who runs a printing shop, said, "Since we are short-staffed and work alongside employees, it’s hard to take on the role of safety manager," adding, "In a work environment where you can get hurt cutting printed materials, punishing the business owner is excessive."

While the ruling party, which has a pro-labor stance, and even the opposition parties are pushing to strengthen the Serious Accident Punishment Act, the Ministry of SMEs and Startups (MSS) is struggling to prepare countermeasures, revealing a disconnect between the government and ruling party. Notably, during the enactment process of the Serious Accident Punishment Act last year, the MSS reportedly participated in the legislative subcommittee and proposed excluding workplaces with fewer than five employees from the scope of serious industrial accidents. It is also known that the MSS was responsible for postponing the application of the law to workplaces with fewer than 50 employees until 2024. However, as soon as the law was enacted, an amendment bill including workplaces with fewer than five employees was proposed, overturning this position.

On the first day of the Serious Accidents Punishment Act enforcement on the 27th, which allows for the punishment of management officials if a serious accident such as a worker's death occurs, managers are conducting a safety inspection at an apartment construction site in Gyeonggi-do. Photo by Hyunmin Kim kimhyun81@

◆ MSS Busy Preparing Countermeasures for the Serious Accident Punishment Act = At small and medium-sized enterprises (SMEs), confusion is increasing due to ambiguous legal provisions, and they are struggling due to a lack of capacity to expand safety and health professional personnel or facilities. Accordingly, the MSS is actively preparing measures to protect SMEs. It is ready to respond to the Serious Accident Punishment Act by investing trillions of won this year in industrial accident prevention consulting and support for the introduction of safety facilities. First, through the SME Innovation Voucher Project worth a total of 61.8 billion KRW, support will be provided for industrial safety and regulatory response consulting (up to 15 million KRW) and system/facility construction (up to 20 million KRW). The project is scheduled to be announced this month.

Additionally, the MSS plans to add ‘equipment introduction for securing safety and health’ as a purpose for the 5 trillion KRW SME policy fund support. Companies with less than seven years of operation can borrow funds under the startup foundation support fund, and those with seven years or more can borrow under the innovation growth fund, up to a limit of 6 billion KRW for equipment introduction. Furthermore, the MSS plans to respond to the Serious Accident Punishment Act through the smart factory dissemination project (357 billion KRW) and the process and quality technology development project (42.7 billion KRW). A pilot project worth 300 million KRW will also be conducted to support regulatory response consulting professionals for 30 cooperatives in the root and traditional manufacturing sectors.

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