January 27, 2024 marks an important milestone for the Korean safety and health regulatory regime. Specifically, from this date, the scope of the Serious Accidents Punishment Act (the “SAPA”) was expanded to cover businesses with employee headcount of between 5 and 49, among other things.
Recap of the SAPA
The following describes the key components and related attributes of the SAPA regime.
- The SAPA is a criminal statute which imposes criminal sanction on the top decision-maker of a company in Korea (referred to as the “Responsible Management Personnel” under the SAPA and generally a company’s representative director in the Korean corporate governance regime) for failing to fulfill various duties as prescribed in the SAPA and the subordinate regulations to secure safety and health in the workplace, which failure results in a serious accident (e.g., death). In short, the SAPA requires the Responsible Management Personnel to (i) put into place appropriate resources in terms of personnel, budget, and organization and (ii) receive reports and issue instructions to ensure appropriate monitoring of effectiveness of the safety and health management system and implement remediation where deficiency is found.
- The SAPA, which is intended to prevent serious workplace accidents (the so-called “Serious Industrial Accidents”) as well as other types of harms that can affect the members of the general public (the so-called “Serious Public Accidents”), was passed on January 8, 2021 and came into force on January 27, 2022.
Key Takeaways
SAPA Compliance Thresholds & Safe Harbors
- For businesses not engaged in the construction industry
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Before January 27, 2024
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From January 27, 2024
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50 or more employees
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"Serious Industrial Accidents’
Applicable to businesses with 5 or more employees (i.e., businesses with fewer than 5 employees are exempt from the SAPA concerning serious accidents in the workplace)
'Serious Public Accidents’
No safe harbor with respect to employee headcount concerning accidents affecting members of the general public
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- For businesses engaged in the construction industry
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Before January 27, 2024
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From January 27, 2024
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Project value of KRW 5 billion or more
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No safe harbor with respect to project value
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SAPA Compliance Timeline
- In addition to the on-going need to assess the status of SAPA compliance, from January 27, 2024, businesses subject to the SAPA will need to be aware of the following compliance timelines:
- June 30, 2024 – 1st semi-annual check per the Enforcement Decree of the SAPA for businesses newly subject to the SAPA
- December 31, 2024 – 2nd semi -annual check per the Enforcement Dec ree of the SAPA for businesses newly subject to the SAPA
Please note that under the Enforcement Decree of the SAPA, there are a total of seven items that need to be verified by the Responsible Management Personnel, including risk assessment, obtaining views of workers concerning safety and health, preparing accident manual, checking status of compliance with safety and health related laws, among other things. It is important to note that these semi-annual checks must be repeated every year.
Given the aforementioned expansion in the scope of the SAPA, it would be prudent for multinational companies with subsidiaries or branches in Korea having at least five employees to check the status of SAPA compliance.