Proposed Amendment to the Occupational Safety and Health Act: Penalty Surcharge for Multiple or Repeated Fatal Accidents

On October 1, 2026, the National Assembly passed a bill amending the Occupational Safety and Health Act (“Bill”) that would allow the imposition of penalty surcharges of up to 5% of operating profit on companies that suffer multiple fatalities or repeated serious accidents. As next steps, the Bill will be forwarded to the executive branch to undergo the remaining legislative process and promulgation, and take effect six months after promulgation (certain provisions, including the reporting rewards provision, will take effect three months after promulgation).

To date, sanctions for violations of labor-related laws, including the Occupational Safety and Health Act (“OSHA”), have centered on criminal penalties and administrative fines. However, the Bill introduces a penalty surcharge as a sanction that can impose a direct and substantial financial burden on companies. Further, the Bill relaxes the requirements for workers to exercise the right to suspend work and establishes a legal basis for providing rewards to anyone who reports OSHA violations. These amendments are expected to heighten the monitoring of safety and health measure violations at workplaces. Please see below a summary of the key provisions under the Bill.

1.	Key Provisions of the Bill

Category		Key Provisions
Economic Sanctions	Penalty surcharges on companies with multiple or repeated serious accidents (Article 161-2)	Where a business owner or a service-receiving entity has violated its safety and health obligations (Articles 38, 39, or 63), resulting in an industrial accident in which three or more workers have died within the past one-year period, a penalty surcharge of up to 5% of operating profit may be imposed (up to KRW 3 billion where there is no operating profit or it is difficult to calculate).
Economic Sanctions	Request for deregistration of business (Article 159(2))	Where a business owner that has received two or more business suspension orders under the OSHA within the past three years becomes subject to a request for business suspension, the Minister of Employment and Labor may request the head of the relevant administrative agency to cancel or revoke his/her business registration.
Strengthened Right to Suspend Work	Relaxed requirements (Article 52)	The threshold for a worker to exercise the right to suspend work is revised from “where imminent danger exists” to “where imminent danger exists or is likely to exist.”
Strengthened Right to Suspend Work	Expanded scope (Article 51)	Workers, worker representatives, and honorary industrial safety inspectors are granted the right to demand work suspension. Subcontractors’ workers may make the demand directly to the service-receiving entity.
Strengthened Work Suspension Orders by the Minister of Employment and Labor	Expanded grounds (Article 55)	The Minister of Employment and Labor may order the suspension of relevant or identical work if it is determined that there is a risk of an industrial accident recurring, not only in cases where a serious accident has occurred, but also in cases where (i) a worker is unconscious or whose survival is unknown or (ii) there is serious damage to the body or its physiological functions as prescribed by the Presidential Decree.
Introduction of reporting rewards (Article 158-2)		A reward may be provided to anyone who reports a violation of the OSHA or an order issued thereunder.

Purpose of the Bill and Key Considerations

First, the penalty surcharge is calculated based on the operating profit of the business owner (i.e., the company), not the workplace. Accordingly, the number of fatalities occurring across multiple workplaces belonging to a single company may be combined in determining whether a penalty surcharge applies. In addition, since a service-receiving entity’s breach of its obligations (Article 63) will be considered, the deaths of subcontractors’ workers may also be taken into consideration in determining whether to impose a penalty surcharge on the service-receiving entity. Companies with numerous workplaces, such as construction companies, or with a high reliance on subcontractors may therefore face a greater risk of penalty surcharge, and depending on the scale of operating profit, the amount could be substantial.

Second, the penalty surcharge is a sanction separate from criminal penalties or administrative fines. That is, criminal proceedings and penalty surcharge proceedings may run in parallel for a single accident, and a determination made in one proceeding may affect the other. Accordingly, it has become more important than ever to take a consistent approach that accounts for both criminal and administrative sanctions from the early stages of an accident. The Bill also requires consideration of “the degree of efforts to prevent industrial accidents and their recurrence” in determining the penalty surcharge amount (Article 161-2, Paragraph 3, Item 3). Accordingly, where companies regularly review the adequacy of their safety and health management systems and maintain objective records of routine safety and health activities, such efforts may not only help prevent serious accidents but also be considered as a mitigating factor in determining the penalty surcharge amount.

Third, the threshold for exercising the right to suspend work is lowered to cases where imminent danger “is likely to exist,” and subcontractors’ workers may demand work suspension directly to service-receiving entities. Accordingly, the exercise of the right to suspend work at workplaces is expected to increase significantly. A business owner that receives a work suspension demand must take necessary measures (e.g., suspension of the relevant work), absent special circumstances, and may be subject to criminal penalties for any disadvantageous treatment of the demanding worker. It is therefore advisable to establish internal procedures covering the receipt, assessment, and lifting of work suspension demands, and to review such procedures regularly.

Fourth, the Minister of Employment and Labor may order the suspension of the relevant work or all identical work if it is determined that there is a risk of an industrial accident recurring, not only in cases where a serious accident has occurred, but also in cases where (i) a worker is unconscious or whose survival is unknown due to an accident, or (ii) there is serious damage to the body or its physiological functions as prescribed by the Presidential Decree. Accordingly, it is advisable to establish procedures to respond to potential work suspension orders and to promptly implement recurrence prevention measures for accidents involving not only fatalities but also serious injuries.

With these amendments, failures in safety and health management may now translate directly into financial consequences for companies, beyond criminal and administrative risks. Accordingly, it is advisable to comprehensively review worksite-level safety and health management systems and procedures for responding to the exercise of work suspension during the six months before the law takes effect.

[Korean Version]

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