South Korea’s New Workplace Safety Law to Hold Executives Criminally Responsible

November 12, 2021

The new Serious Accident Penalty Act (SAPA), which goes into effect on January 27, 2022, places responsibility for workplace accidents and occupational illnesses on senior executives, in addition to broadening the scope of obligations and strengthening penalties for violations.  The new law applies to companies with at least 50 employees.  Global companies operating in South Korea should work with local leaders on mitigating the risks of noncompliance.

Under the law, businesses and responsible management personnel must: 

  • Establish and implement safety and health management systems;

  • Establish and implement a plan to prevent recurrence of serious accidents;

  • Carry out the government’s improvement or corrective orders as applicable; and

  • Take managerial measures to comply with the applicable safety and health laws, such as the existing South Korean Occupational Safety and Health Act (K-OSHA).

If a serious accident occurs, "business owners" and "managerial personnel" may be subject to criminal penalties.  Managerial personnel are any authorized persons who manage the business or any individual who is responsible for occupational health and safety in the business with similar authority.  The representative director of a Korean company would be considered managerial personnel.

Penalties vary depending on the severity of the incidents, including imprisonment and/or criminal fines.  However, if an individual or a company is found to have exercised due care or supervision to prevent a violation of the SAPA, then the individual or company may not be held liable for a serious accident. 

The law was designed to “fix” K-OSHA which has been criticized as being ineffective in preventing workplace accidents and for only imposing criminal liability on facility managers instead of senior leaders in the company.  However, the measure has exacerbated longstanding concerns about criminal penalties for regulatory infractions in South Korea and puts significant pressure on executives assigned to the country by U.S. or European companies.  “CEOs in Korea—whether foreign or Korean—are personally liable for so many things that are beyond their control,” noted James Kim, chair of the American Chamber of Commerce in Korea.  “They are asking why they should be taking on all these personal risks to come and work here.” 

Outlook:  The law is designed to encourage fundamental changes in company leadership's attitudes towards safety and health and produce concrete action to prevent serious accidents.  Companies need to prepare their top leaders in South Korea for this important change starting next year and ensure compliance.