The amendments to the subordinate regulations of the Occupational Safety and Health Act (as amended, the “OSHA”), which were promulgated in December 2019, became effective on January 16, 2020. According to the Ministry of Employment and Labor (the “MOEL”), the purpose of the amendments is to expand the scope of statutory protection for the “persons providing labor in various forms” and create a safe and healthy work environment for them, reflecting the recent changes in how labor is used in workplace.
These amendments to the OSHA include, among others, expanding the categories of both the parties responsible for OSHA compliance as well as the workers protected by the OSHA; strengthening the responsibility of service recipient companies; improving safety in the construction industry as well as reducing safety risks when handling dangerous equipment and machinery; and enhancing regulation over chemical substances, including the Material Safety Data Sheet (“MSDS”) requirements.
1. Expansion of the categories of the parties responsible for OSHA compliance as well as the workers protected by the OSHA
| Category |
Key Details |
Penalty |
| 1. Representative Directors |
- Scope of Application: Companies with at least 500 employees and construction companies ranked in the top 1,000 at the construction ability evaluation for the previous year
- Scope of Duty: The representative directors of those companies are obliged to establish a safety and health plan on a yearly basis, report it to their respective Board of Directors to obtain approval, and fully implement the plan.
※ Will become effective on January 1, 2021
|
Administrative fine up to KRW 10 million |
| 2. Construction Project Owners |
- Scope of Application: Owners of construction projects worth at least KRW 5 billion in total
- Scope of Duty: For each of the planning, design and construction phases, such construction project owners are obliged to prepare a safety and health record file and monitor the implementation of requirements specified in the file.
|
Administrative fine up to KRW 10 million |
| 3. Franchisors |
- Scope of Application: Restaurant or convenient store franchisors with at least 200 franchisees
- Scope of Duty: Those franchisors are obliged to prepare and provide safety and health programs for franchisees at least once a year. Further, they must provide franchisees with safety and health information on the machinery and equipment supplied to them.
|
Administrative fine up to KRW 30 million |
| 4. Protection of Workers Engaged in Special Types of Work |
- Scope of Application: Workers engaged in the nine types of businesses: (i) insurance agents/Korea Post insurance agents, (ii) construction equipment operators (27 types), (iii) study workbook tutors, (iv) golf caddies, (v) parcel delivery workers, (vi) express delivery workers, (vii) loan agents, (viii) credit card agents, and (ix) chauffeurs
- Scope of Duty: Employers of those workers are obliged to implement safety and health measures for each of the nine types of occupations, and provide safety and health trainings for such workers (except for (i), (iii), (vii), and (viii)).
|
(For not taking safety and health measures) Administrative fine up to KRW 10 million
(For not providing safety and health trainings) Administrative fine up to KRW 5 million |
| 5. Workers Engaged in Delivery Services |
- Scope of Application: Workers driving two-wheeled motor vehicles to collect and deliver goods
- Scope of Duty: Delivery service agents (including delivery apps) are obliged to implement safety and health measures for delivery workers.
|
Administrative fine up to KRW 10 million |
2. Increase of the responsibility of service recipient companies
| Category |
Key Details |
Penalty |
| 1. Approval on Outsourcing of Works |
- Scope of Application: Works to modify, dismantle, disassemble or demolish equipment handling at least 1% content of sulfuric acid, hydrogen fluoride, nitric acid or hydrogen chloride, and works to be performed inside of such equipment
- Scope of Duty: Any outsourcing within the company shall be subject to prior approval (every three years).
※ No service providing company of outsourced works may subcontract such outsourced works to any other party.
|
Administrative penalty up to KRW 1 billion |
| 2. Expansion of the Scope of Service Recipient companies’ Responsibility |
- Scope of Duty: (Before Amendment) 22 types of dangerous workplaces within service recipient company’s premises → (After Amendment) (i) Every workplace within service recipient company’s premises, along with (ii) 21 types of dangerous workplaces which are designated/provided by, and under the control/management of, the service recipient company
|
Imprisonment up to three years, or criminal fine up to KRW 30 million
(In the case of fatal industrial accident, imprisonment up to seven years or criminal fine up to KRW 100 million.) |
| 3. Selection of Qualified Service Providing Companies |
- Scope of Duty: To outsource projects, companies are obliged to select service providing companies that are capable of taking preventive measures against industrial accidents, based on assessment of safety- and health-related capabilities of potential service providing companies.
|
None |
3. Improvement of safety in the construction industry and reducing safety risks when handling dangerous equipment or machinery
| Category |
Key Details |
Penalty |
| 1. Safety Managers |
- Scope of Application: (Before Amendment) Companies outsourcing construction works worth at least KRW 12 billion → (After Amendment) KRW 5 billion
- Scope of Duty: Those companies are obliged to appoint a safety manager.
※ Starting from July 1, 2020, the scope of application will be gradually phased down to KRW 5 billion.
|
Administrative fine up to KRW 5 million |
| 2. Safety and Health Coordinators |
- Scope of Application: Companies outsourcing two or more construction works to be performed at the same location
- Scope of Duty: Those companies are obliged to appoint a safety and health coordinator in order to manage potential risks associated with multiple works performed simultaneously.
|
Administrative fine up to KRW 5 million |
| 3. Safety Measures for Construction Machinery/Equipment |
- Scope of Duty: Construction project owners are obliged to conduct safety inspections on tower cranes, construction lifts, pile drivers, and pile extractors.
|
Imprisonment up to three years or criminal fine up to KRW 30 million |
4. Enhancement of regulations on chemical substances (Enforcement Date: January 16, 2021)
| Category |
Key Details |
Penalty |
| 1. MSDS |
Category |
Before Amendment |
After Amendment |
(For not submitting MSDS) Administrative fine up to KRW 5 million |
| Scope of Application |
Content levels of hazardous/dangerous chemical substances |
Hazardous/dangerous chemical substances and their mixtures, which fall under certain classifications |
| Prepared by |
Transferors/
Providers |
Manufacturers/
Importers |
| Contents to be included |
The names and content levels of all constituents |
The names and content levels of hazardous/dangerous chemical substances among all constituents |
| Mandatory Submission |
None |
Submit to the MOEL |
| 2. Approval on Partial Non-disclosure of MSDS |
- (Before Amendment) Companies are allowed to not disclose certain information as trade secrets in MSDS. → (After Amendment) Companies must obtain an approval from the MOEL for partial non-disclosure, with which the companies may indicate alternative names and alternative content levels of such materials.
- Special Provisions Applicable to Materials for R&D Purposes: Simplified submission requirements with a shortened examination period
- Exceptions: Companies are obliged to disclose information about those materials designated by the MOEL as potentially hazardous materials posing serious threats to workers.
|
Administrative fine up to KRW 5 million |
| 3. Process Safety Management (“PSM”) Reports |
- Change in the permissible content levels: The permissible content levels for highly toxic and dangerous materials (categorized as 18 types) are lowered while those for less toxic and dangerous materials (categorized as 18 types) are increased.
※ If a person operates any process before obtaining a confirmation that the PSM report is appropriate, the person is subject to imprisonment up to three years or criminal fine up to KRW 30 million.
|
(For not submitting a PSM report) Administrative fine up to KRW 10 million |
| 4. Highly Hazardous Materials for which Permissible Exposure Limits Are Set |
- (Before Amendment) (14 types of chemicals are designated as highly hazardous materials (in terms of carcinogenicity, reproductive toxicity and mutagenicity) → (After Amendment) 38 types of chemicals are designated as highly hazardous materials (24 types of chemicals including ethylene oxide are newly added)
|
(For exceedance of the permissible content levels) Administrative fine up to KRW 10 million |
5. Increase of the companies’ responsibility to fulfill their duties
| Category |
Key Details |
| 1. Strengthened Sanctions |
- (Before Amendment) In the event that a fatality resulted from the company’s non-compliance with its duty to implement safety and health measures, the company/responsible person would be subject to imprisonment up to seven years or criminal fine up to KRW 100 million. → (After Amendment) If the company/responsible person commits the same offense in five years from the date when the previous sentence was confirmed, its punishment may be aggravated by up to one half of such sentence.
- (Before Amendment) In the case of industrial accident with fatality, the company would be subject to criminal fine up to KRW 100 million. → (After Amendment) The maximum amount of criminal penalty is increased to KRW 1 billion.
- Newly Established Provisions: If a person is found guilty of causing an industrial accident involving fatality (excluding suspension of sentencing), the person would be subject to an order to attend relevant training sessions for up to 200 hours.
|
| 2. Increased Administrative Fines |
- Scope of Duty: The amounts of administrative fines imposed for major violations (e.g., failure to provide safety and health trainings, failure to display/keep MSDS) are increased.
- Training: (First Violation) (i) KRW 30,000 per worker required to attend training → KRW 100,000; (ii) KRW 50,000 per supervisor required to attend training → KRW 500,000; (iii) KRW 50,000 per person required to attend special safety and health training → KRW 500,000
- MSDS: (First Violation) KRW 100,000 per material required to be included in MSDS and per workplace where MSDS shall be disclosed/kept → KRW 1 million
|
| 3. Clarification of the Requirements and Scope of Suspension of Operation |
- Scope of Duty: If a major industrial accident occurs, relevant work and any identical work shall be suspended (or partially suspended).
- Where there is a possibility that the impact of the major industrial accident (caused by a fire or explosion) will spread to the surrounding areas, the operations performed at the affected workplace shall be suspended (or entirely suspended).
- The company shall seek the opinions of its workers before lifting the suspension of operation and the labor authorities hold a review committee within four days after the company’s application for lifting the suspension of work.
|
The above-mentioned amendments to the OSHA reflect the public’s demand for enhanced regulations to prevent major industrial accidents in outsourced projects and the government’s “policy to promote respect for workers by creating safer and healthier workplaces.” In this regard, it is expected that the quantum of efforts and associated spending by businesses to prevent industrial accidents are expected to increase significantly.
Further, it is worth mentioning that there are many new regulatory requirements introduced by the amendments – such as the representative director’s obligation to establish safety and health plans, construction project owners’ obligation to fulfill their duties, obligation to obtain prior approval on outsourcing of works, as well as obligation to retain qualified service providing companies – which will make it necessary for businesses to update, as applicable, the existing internal processes and systems for OSHA compliance.
In light of the foregoing considerations, we view it will be necessary for businesses to minimize exposure to the risks of doing business and enhance compliance by instituting effective response measures to the regulatory measures introduced (or strengthened) under the said amendments to the OSHA.
[Korean version]
