Firms face fines up to 5% of operating profit if 3 or more workers die in a year

An amendment to the Occupational Safety and Health Act that imposes fines of up to 5 percent of operating profit on employers whose safety or health violations result in the deaths of three or more workers within a year cleared the National Assembly on Thursday. The legislation also broadens the conditions under which workers may halt dangerous tasks and evacuate.

The government said it expects the measure to encourage corporate investment in safety and strengthen protections for workers' lives. Business groups, however, pushed back, citing concerns about double penalties and vague standards for work stoppages.

According to the Ministry of Employment and Labor, the National Assembly passed the amended Occupational Safety and Health Act at a plenary session Thursday. The bill introduces new fines for workplaces with multiple or repeated fatal accidents and expands the scope of work-stoppage rights. It codifies key tasks from the government's comprehensive labor safety plan announced in September last year.

The centerpiece of the amendment is an economic penalty targeting employers responsible for repeated fatal accidents. Employers who violate safety and health obligations under Articles 38, 39 and 63 of the act and whose violations result in the deaths of three or more workers from industrial accidents within a year will face fines of up to 5 percent of operating profit. The provision takes effect six months after promulgation, and collected fines will be deposited into the industrial accident insurance fund for use in accident prevention.

For a company with 400 billion won ($295 million) in operating profit, applying the maximum rate of 5 percent would yield a fine of 20 billion won. The actual amount levied will vary depending on specific assessment criteria. The Ministry of Employment and Labor said it will set fines based on the nature of the accident, the size of the company and the severity of the violation, with the aim of encouraging businesses to expand investment in worker safety.

Workers' right to stop work is also being expanded. Workers will be able to halt work and evacuate not only when there is an imminent risk of an industrial accident but also when such a risk is reasonably anticipated. Workers, worker representatives and honorary industrial safety inspectors may request that an employer order a work stoppage, and subcontract workers will be able to make such requests directly to the primary contractor. The related provisions take effect six months after promulgation.

The conditions under which the minister of employment and labor may issue a work-stoppage order are also being broadened. Beyond cases involving serious accidents, the minister will be able to issue such orders when a worker has been rendered unconscious or their survival is uncertain following an accident. Employers who receive a corrective order — such as a directive to install safety railings — and fail to comply will be barred from resuming work until the correction is completed if an imminent risk of an industrial accident exists.

The amendment also establishes grounds for requesting the cancellation or revocation of business registrations for repeat offenders. If an employer whose safety or health violations caused the simultaneous deaths of two or more workers has received two or more suspension orders within three years and again becomes subject to a suspension request, the minister of employment and labor may ask the relevant administrative authority to cancel the business registration.

Extreme heat and cold waves are explicitly added as grounds for requesting an extension of construction project timelines, and the obligation to include industrial safety and health management costs in project budgets is expanded beyond construction project clients to cover contractors and other industries.

A Safe Workplace Committee — a tripartite body of labor, management and government representatives tasked with deliberating on major industrial safety and health policies — will also be established within the ministry. The committee will be chaired by the minister of employment and labor and will comprise up to 20 members, including labor and management representatives and experts. It takes effect three months after promulgation. The amendment also creates a legal basis for paying rewards to those who report violations of the act and related orders.

The Korea Enterprises Federation issued a statement Thursday expressing concern over the fine provisions and the expansion of work-stoppage rights. On the imposition of fines of up to 5 percent of operating profit, the federation said the standard was "excessive and unrealistic, with no regard for the corporate operating environment." It warned that large businesses would face heavy fines while small and midsize companies could face threats to their survival.

The federation said adding fines on top of already-strengthened employer penalties under the Occupational Safety and Health Act and the Serious Accidents Punishment Act amounted to double punishment. It also said the criteria for triggering work stoppages were too vague and could spark labor-management disputes over whether and how broadly to apply them, calling on the government to clarify the standards in subordinate regulations and implementation guidelines.

Employment and Labor Minister Kim Young-hoon said, "Everyone who works has the right to work safely," adding that "the government will do its utmost to ensure the new system takes root on the ground, including by refining subordinate regulations."