A workplace safety law is set to be expanded to apply to small businesses with 50 employees or less from Saturday, as rival parties failed to reach an agreement Thursday on deferring the plan.

The safety law holds employers liable for serious industrial accidents, and employers could face at least one year in prison or fines of up to 1 billion won ($749,000) in the event of a fatal workplace accident.

The government had earlier granted a grace period for companies with fewer than 50 employees, which account for about 80 percent of all serious accidents.

Earlier, President Yoon Suk Yeol, Labor Minister Lee Jung-Sik and Finance Minister Choi Sang-mok called for the National Assembly to pass a revised bill that would grant an additional two-year grace period for small businesses, urging rival parties to sit down and negotiate a way to minimize the impact of the law's implementation on small business owners.

Korea's business community has voiced its concerns that small businesses are unprepared for the law.

"If the act, which strongly penalizes business owners, gets implemented, concerns over business shutdowns and employee layoffs will become a reality," according to a joint statement from five business associations, including the Federation of Korean Industries and the Korea Chamber of Commerce and Industry.

Meanwhile, Labor Minister Lee Jung-Sik held a briefing and said on Thursday afternoon.

"Since small businesses are not prepared yet, I feel bad that the revised bill couldn't pass at the National Assembly today and that the workplace safety law at small businesses to be implemented from Saturday," Lee said.

"The government, therefore, will carry out the plan of 'Measures to Support Businesses Vulnerable to Fatal Accidents' announced on Dec. 27 last year as quickly and smoothly as possible," Lee added. Under the plan, the government plans to provide a total of 1.5 trillion won to strengthen safety management for small businesses.

Lee also said he would focus on managing the safety management system by letting them self-diagnose all small businesses with 50 employees or less nationwide for about three months starting next week.