Seoul,South Korea – September 21,2025 -โ Comprehensiveโ labor โsafety measuresโ announced by the government are โฃpoised to significantly disrupt South Korea’sโ construction market,perhaps paralyzing it,according toโข industry analysts. โคTheโ measures, planned for phased implementation starting in theโข second half โคof this year adn fully enacted next year,โฃ include substantialโ penalties for safety violations.
Currently, penalties are capped at 5% of โคoperating profit, with โคa floor of 3 billion won, dependent on โthe severity of accidents. However, โคthe new regulations are expected toโค disproportionately impact smaller construction firms. Whileโ larger companies with operating profits exceedingโ 60 billion won mayโฃ absorb โฃthe โ5% cap, smaller firms face penalties consuming a significant portion โขof their earnings with theโข 3 billionโ won minimum.
Adding โto the pressure, a revised special โคact on construction Safety is โขunder consideration, โpotentially imposing penalties ofโฃ up โto 3% of total sales in theโฃ event of aโ fatalโ accident. Uncertainty โremains regarding whether these penalties will be applied alongside,โ or in lieu of, the comprehensive labor โฃsafety measures.
If โขimplemented separately, the combined impactโฃ coudl โbe โฃdevastating, particularly for โคmid-sized โขbuilders. Analysis of theโข first half ofโฃ 2025 data indicates POSCO โขE&C would face the largest deficit, while Hyundai E&C and Lotte E&C would incur penalties exceedingโ their operating โprofits. Acrossโ seven major construction companies,the โขaverage penalty rate is projected โคat 70%.
“The comprehensive measuresโ currently announced are excessive considering โคthe principles โขofโ self-responsibility and the principle of proportion,” stated an official from a large law firm.
The โannouncement comes โฃas the constructionโ industry grapples โwith โคongoing concerns about workplace safety and a series of high-profile accidents.