Concerns rise as workplace safety law extends to smaller firms

People Power Party lawmakers chant as they call for an extension of the grace period of the Serious Accident Punishment Act for small businesses. The lawmakers are holding signs that read ″Small businesses will all be gone,″ and ″Respond to small businesses' pleas,″ during the party's general meeting on Thursday at the National Assembly in western Seoul. (Newsis)

The business community and President Yoon Suk Yeol conveyed their profound disappointment following unsuccessful parliamentary negotiations on extending the grace period for the country's workplace safety law for small businesses by an additional two years.

Labor groups, on the other hand, have embraced the latest developments, viewing them as positive steps in ensuring enhanced worker safety standards.

The workplace safety law, known as the Serious Accident Punishment Act is, set to be expanded to apply to small businesses with 50 employees or less from Saturday, as rival parties failed to reach an agreement Thursday on deferring the implementation of the law.

The Korea Enterprises Federation said in a statement that the expanded implementation will likely result in negative effects for small businesses, including the closure of workplaces and worker layoffs, "rather than achieving the intended effect of preventing future accidents."

According to a KEF survey, 87 percent of 1,053 small businesses with fewer than 50 employees said that they would not be able to meet the stricter legal requirements before the grace period expires.

President Yoon Suk Yeol on Friday ordered relevant ministries to "mitigate potential confusion and carry-over effects arising from the enforcement of the workplace safety law in the industrial sector."

"I strongly regret the irresponsible actions of the opposition party, which have overlooked the challenges faced by small businesses and the overall public economy," Yoon said, as conveyed by presidential spokesperson Kim Soo-kyung.

Yoon stressed that the government should take necessary steps to implement support measures for small businesses whose survival is threatened by the implementation of the new law.

Lamenting the unsuccessful extension of the grace period, Labor Minister Lee Jung-Sik also said, "Small businesses are not adequately prepared yet" during a press briefing on Thursday afternoon.

"The government, therefore, will carry out the 'Measures to Support Businesses Vulnerable to Fatal Accidents' plan, which was announced on Dec. 27, as quickly and smoothly as possible," Lee added.

Under the plan, the government aims to provide a total of 1.5 trillion won ($1.1 billion) to help strengthen safety management for small businesses.

Lee also said he would focus on supporting safety management at small businesses through the implementation of a self-assessment system for about three months starting next week.

Meanwhile, two major labor unions welcomed the latest development.

“We welcome the expansion of the Serious Accident Punishment Act’s implementation,” the Korean Confederation of Trade Unions said in a statement. “This lays the minimum legal foundation on which workers’ lives and safety can be protected.”

“Through the implementation of this law, workers at small businesses will also be able to work safely and healthily. We hope that this will become the foundation for moving towards a society where all workers in Korea are guaranteed the right to work safely," the Federation of Korean Trade Unions added.

The new safety law holds employers liable for serious industrial accidents. In the event of a fatal workplace accident, employers face the possibility of at least one year in prison or fines of up to 1 billion won. The government had earlier granted a grace period for companies with fewer than 50 employees, which account for about 80 percent of all serious accidents.

However, many small businesses are not ready for the law, with many small business owners unaware that they are even subject to the law.

A restaurant owner in her 50s surnamed Yoon, in Incheon, said “I think my restaurant is subject to the law because it has more than 5 employees, but I haven't figured the law out yet.”

Small business owners are also worried about the potential impacts and spillover effects of the new law.

A business owner surnamed Kim, who has been running a timber company in North Chungcheong Province for 30 years, employs 20 employees, and will thus be subject to the law from Saturday.

“I am paying more attention to safety ahead of the expansion of the workplace safety law," Kim. "But I am very concerned that if an accident occurs, the business will be forced to close.”

By Lee Jaeeun(jenn@heraldcorp.com)