Confusion at 830,000 SMEs with Many Foreigners and Elderly Workers

Full Implementation for Workplaces with Fewer than 50 Employees on the 27th
Business Owners Face Over 1 Year Imprisonment for Serious Accidents
Biggest Issue is 'Lack of Experts'

Starting from the 27th, the "Serious Accidents Punishment Act (Serious Accidents Act)" will also apply to workplaces with fewer than 50 employees, plunging small and medium-sized enterprises (SMEs) and micro-business owners into turmoil. Most SMEs are facing a management crisis without adequate preparation. Although business owners can face imprisonment of over one year if a serious accident occurs, such as death or injuries requiring more than six months of treatment to two or more people, the field remains completely unprepared. Due to lack of costs and manpower, preparation is impossible, and many companies are not even aware of the law's existence. Accidents at work sites can happen unintentionally no matter how careful one is, so from this day forward, representatives of micro-enterprises could be arrested. This means that management gaps could occur across more than 830,000 SMEs nationwide.

According to the Ministry of Employment and Labor on the 26th, the number of accident victims in SMEs with 5 to 49 employees, where the Serious Accidents Act is newly applied, was 36,336 from January to September last year, with 264 deaths. These figures account for 43.1% and 44.7% of all workplace accidents, respectively. With the law now applying to companies with fewer than 50 employees, cases of punishment under this law are expected to increase. By industry, the highest number of fatal accidents occurred in construction and manufacturing. Within manufacturing, frequent accidents occurred in machinery and equipment, metal and non-metallic mineral products manufacturing, food manufacturing, chemical and rubber products manufacturing, and shipbuilding and repair industries. Most companies in these sectors are small-scale and have not established safety and health management systems or secured sufficient safety personnel and budgets. Noh Sang-chul, director of the Korea Frame Industry Cooperative, said, "Once the Serious Accidents Punishment Act is applied from the 27th, SMEs realistically have nothing they can immediately prepare for, so if an accident occurs, the business owner will inevitably become a lawbreaker."

The industry explains that these companies have many elderly workers, leading to more frequent accidents. In fact, according to industrial accident statistics compiled by the Ministry of Employment and Labor as of September last year, the number of accident victims was 10,218 for ages 50-54, 12,178 for ages 55-59, and 26,645 for those aged 60 and above, showing that older workers are more prone to accidents. Deaths were also highest among those aged 60 and above at 275, followed by 177 in their 50s. Another reason for vulnerability to accidents is the high number of foreign workers in companies with fewer than 50 employees. According to Statistics Korea's "Immigrant Residency and Employment Survey," as of May last year, there were 923,000 foreign workers, of whom 56.9% worked in companies with 5 to 49 employees. It is explained that the lack of Korean language communication skills increases the likelihood of accidents.

Despite these issues, the industry’s position is that if a representative is punished due to a serious accident, it could lead to business suspension or closure. This would shake more than 8 million jobs. As of September last year, there were 8.93 million workers in companies with 5 to 49 employees, making it the largest employment group when classifying companies by workforce size.

Many Are Completely Unaware of the Serious Accidents Act

Nevertheless, many micro-enterprises are completely unaware of the Serious Accidents Act. They could become lawbreakers without even knowing about the law. When asking about a dozen companies in the Jangsa-dong area of Jongno 3-ga, where small industrial goods manufacturers gather, none answered that they knew about the Serious Accidents Act. Here, A, who operates an industrial goods manufacturing company, said about the Serious Accidents Act, "I've never heard of it, and even if the law is enforced, there's no way other than being careful on our own."

Knowing about the enforcement of the Serious Accidents Act in advance does not necessarily lead to action. Kang, who runs a glass bottle manufacturing factory in Suwon, knew the law was being enforced but could not take any special measures. Kang said, "They say you just need to hire a safety manager, but the business is so difficult that even reducing staff is hard, so hiring additional personnel is out of the question," adding, "Most business owners around me are in similar situations."

On the first day of the Serious Accidents Punishment Act enforcement, which allows for the punishment of management officials when serious accidents such as worker fatalities occur, a construction site of an apartment in Gyeonggi-do on the 27th./Photo by Kim Hyun-min kimhyun81@

Lack of Safety and Health Management Specialists

The biggest problem cited by the SME sector is the "lack of safety and health management specialists." Even if they want consulting, personnel capable of providing it are limited. Although government consulting is available, most of it is administrative consulting conducted by labor attorneys. Kim Young-seok, director of the Seoul-Gyeongin Ready-Mixed Concrete Industry Cooperative, said, "We have received education and consulting from the Ministry of SMEs and Startups, the Korea Occupational Safety and Health Agency, and the Korea Federation of SMEs, but it is insufficient," emphasizing, "Labor attorneys mainly focus on post-accident responses rather than preventive measures, so more practical consulting is needed."

Minister of Employment and Labor Lee Jeong-sik urges the enactment of the amendment to further postpone the application of the Serious Accidents Punishment Act for companies with fewer than 50 employees at the Government Seoul Office in Jongno-gu, Seoul on the 24th. Photo by Jo Yong-jun jun21@

Cost is also an issue. Although the Serious Accidents Act does not mandate hiring safety managers for workplaces with fewer than 50 employees, SMEs lacking expertise in accident prevention and without the capacity to establish separate organizations might benefit from appointing safety managers to delegate safety tasks. However, many companies cannot afford to hire additional personnel immediately. Chae Hee-tae, a researcher at the Korea Institute for Startup & Entrepreneurship Development, explained, "SMEs lack manpower and financial resources, making it difficult to comply with the safety and health obligations under the Serious Accidents Act," adding, "Many do not have concrete implementation plans despite the law's enforcement."

The SME sector expects that it will take about two years to cultivate specialized personnel to some extent. The Ministry of Employment and Labor also announced in December last year’s "Support Measures for Companies Vulnerable to Serious Accidents" that to address the shortage of safety and health management specialists, it would operate specialized training courses, establish additional industrial safety majors, and relax qualification requirements for safety managers. Through these measures, the ministry plans to train 20,000 specialists by 2026.

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