Geonsanyeon "Construction Work Ledger Notification System, Regulatory Costs 28 Billion KRW"

System Introduced to Detect Illegal Subcontracting
Companies Complain of "Excessive Data Entry and Increased Workload"

Construction site (The photo is unrelated to the article content.)

A study has revealed that the 'Construction Work Ledger Notification System,' introduced to detect illegal subcontracting and other violations, is increasing the workload for companies, with regulatory costs reaching up to 28 billion KRW.

On the 19th, the Korea Construction Industry Research Institute published a report titled "Rational Improvement Measures for the Construction Work Ledger Notification System," stating, "To ensure the effectiveness of the Construction Work Ledger Notification System in improving productivity and enhancing transparency in the construction industry, it is crucial to build consensus with the industry through rational improvements in the system's operation."

The Construction Work Ledger Notification System is operated to improve administrative efficiency in government informatization efforts and monitoring of various illegal activities. It requires notifying the client of the construction work ledger (including subcontracted construction work ledgers) through the information and communication network designated by the Minister of Land, Infrastructure and Transport (Construction Work Information System, CWS).

The institute noted, "While the current Construction Work Ledger Notification System is necessary for strengthening industry informatization and administrative efficiency, it is causing increased workload for construction companies due to ▲excessive information input items and frequency, ▲short mandatory notification periods, and ▲administrative sanctions such as penalties for delayed notifications."

Regarding the notification items of the construction work ledger, the number has increased from the initial 14 basic construction information types to 83 items across four categories (68 items for subcontracted construction work ledgers). According to a survey of construction companies, 84.7% of respondents reported feeling burdened by the excessive amount of information input required.

The notification of the construction work ledger is not a one-time input at contract signing but must be reported within 30 days whenever modifications or changes occur. Since administrative sanctions (corrective orders and fines) apply for violations such as delayed notifications, the related workload for construction companies is considered high.

Over the past seven years (2014?2020), among the total 35,669 fines imposed for violations of the Construction Industry Basic Act, 76.9% were due to violations of the construction work ledger notification requirement. In the recent survey, 90.1% of respondents stated that administrative penalties for violations of electronic notification of the construction work ledger are excessive.

According to the analysis in this report by the Korea Construction Industry Research Institute, the social costs (regulatory costs) borne by construction companies due to the Construction Work Ledger Notification System range from approximately 17.54 billion KRW to 27.95 billion KRW.

The institute emphasized, "To achieve the goals of the Construction Work Ledger Notification System?productivity improvement through informatization and enhanced industry transparency?it is necessary to avoid excessive information input demands for administrative purposes and to rationally improve the current system operation considering its original intent."

Researcher Jeon Young-jun stated, "Rather than expanding the scope of construction projects subject to the ledger notification, which the government is currently discussing, it is necessary to reduce it to a reasonable level, relax notification deadlines, adjust the timing of information input, and minimize duplicate entries by strengthening two-way information linkage with other construction information systems (such as electronic payment systems) that are mandatorily used on-site."

He added, "For small-scale projects (contract amounts of 300 million KRW or less), batch input after completion, preparation of prior guidance procedures by local governments responsible for administrative sanctions, and system function upgrades to enhance the utilization of construction work information can reduce the workload for construction companies. Furthermore, incentive measures to encourage voluntary participation by construction companies could also be considered."