The government will push to impose a penalty surcharge of up to 5% of operating profit on corporations and public institutions where three or more people die in industrial accidents in a year. Even in the case of operating losses, a minimum penalty surcharge of 3 billion won will be imposed. Construction companies that received two business suspension orders due to industrial accidents over the past three years and then again become subject to a business suspension may have their licenses revoked.
The Ministry of Employment and Labor and other relevant ministries and agencies on the 15th announced a comprehensive labor safety plan centered on these measures. This is a pan-government plan unveiled a month and a half after President Lee Jae-myung called for measures to impose economic sanctions on corporations that repeatedly cause fatal accidents.
◇ Penalty surcharge of at least 3 billion won and up to 5% of operating profit
First, the government decided to impose a penalty surcharge when three or more deaths occur in a year. The penalty surcharge will be levied on the corporation, not on on-site units such as business sites. The specific amount, taking into account the number of deaths and frequency of occurrence, will be reviewed by a newly established Penalty Surcharge Review Committee. The collected penalty surcharges will be incorporated into the Industrial Accident Compensation Insurance Fund and used for accident prevention.
The Minister of Labor will also relax the conditions for requesting a business suspension for construction companies where industrial accidents occur. The current standard is "two or more deaths at the same time," and the government plans to add a requirement for "multiple deaths in a year." However, the specific number for "multiple" will be finalized after further discussion. In addition to general construction companies, construction firms in electrical, information and communications, and firefighting facilities will also be subject to business suspension requests. The current suspension period of two to five months will also be extended.
Construction company license revocation will also become possible. The government will establish rules to allow deregistration of construction companies that, after receiving two business suspension dispositions in the past three years, again become subject to a business suspension request. The government is also reviewing similar measures for 33 sectors that require government permits and licenses, such as food and lodging, not just construction companies.
If a serious accident occurs at a public institution, a legal basis will be created to request the dismissal of the institution head. The government also plans to raise the score allocation for industrial accident prevention in the management evaluation that determines performance bonuses for heads and executives of public institutions from the current 0.5 point to 2.5 points.
In addition, as sanctions, the government will push to: ▲ restrict participation in public bids ▲ reflect serious-accident risk in credit screening and loan agreements in the financial sector ▲ mandate ad hoc disclosures of serious-accident occurrences ▲ restrict the employment of business owners responsible for foreign workers' industrial accident deaths for three years. The across-the-board increase of Occupational Safety and Health Act fines, once floated as a sanction, was excluded from this plan in consideration of concerns such as double punishment.
◇ Add about 3,000 labor inspectors; grant supervisory authority to local governments
Beyond these sanctions, the government will also strengthen "prevention" and "support." To prevent serious accidents, it will introduce an emergency work-stop order by the Minister of Labor and further relax the conditions under which workers can exercise the right to stop work. The government will also push measures to criminally punish employers who use the legitimate exercise of the right to stop work as grounds for disciplinary action.
The government will also add about 3,000 industrial safety inspectors (labor inspectors) by 2028. It plans to grant labor inspection authority, which is currently conferred only on the central government, to local governments as well. Through this, the number of high-risk business sites slated for inspection, planned at 24,000 this year, will be increased to 70,000 by 2028. Dedicated investigative personnel at the Labor Ministry, police, and prosecutors' offices will also be reinforced.
In addition, construction clients will be obligated to calculate appropriate construction costs, and the minimum bid rate applied in eligibility screenings for national construction projects will be raised by 2 percentage points from the current level. Reasons requiring extensions of construction periods will be expanded to include "heat waves and other weather disasters," to ensure sufficient construction time. For small business sites with contracts under 1 billion won (construction sites under 5 billion won), up to 90% of the expense of installing devices that can prevent accidents such as falls, entanglements, and collisions will be subsidized.
The government said, "We will swiftly prepare a bill to implement these measures and pursue legislation within the year after party-government consultations," and "We will work closely with fiscal authorities and the National Assembly to ensure that next year's labor safety budget (2.0722 trillion won) is reflected without disruption."