Seoul City Launches Special Inspection Team to Address Construction Site Payment Delays... Special Inspection Unit Formed

Focused Inspection on Construction Payment Delays and Withholding for Operations, Labor, Materials, and Equipment
Designated 11-Day Intensive Reporting Period for Subcontract Payment Delays Starting from the 25th

[Asia Economy Reporter Lim Cheol-young] To prevent arrears in construction payments, wages, materials, and equipment fees during the Chuseok holiday, Seoul announced on the 16th that it has organized a ‘Special Inspection Team for Arrears Prevention’ and will conduct special inspections at 10 sites selected as vulnerable to arrears among construction projects commissioned by the Seoul Metropolitan Government.

The inspection team consists of two groups, including honorary subcontracting ombudsmen (lawyers, labor attorneys, technical experts, etc.) and Seoul city employees (a total of five people, including one subcontracting ombudsman with lawyer qualifications from the Audit Committee). They will visit construction sites to conduct inspections. The team will focus on checking the execution and fulfillment status of construction-related payments, the appropriateness of labor contracts, and construction machinery lease agreements to enhance the effectiveness of arrears prevention activities. In addition, subcontracting ombudsmen will guide amicable resolutions through legal consultations or mediation for any disputes.

Furthermore, Seoul has designated the period from August 25 to September 8 as an intensive reporting period for subcontracting payment arrears. During this period, additional on-site mobile inspections will be conducted at sites with multiple or repeated complaints. The on-site mobile inspections will be carried out by the Seoul Subcontracting Rights Protection Officer and Seoul city employees to quickly resolve unpaid payments by identifying the status of unpaid amounts and encouraging agreements between parties.

The inspection will also cover ▲ issuance of guarantees for construction machinery rental fees at each site ▲ operation status of the electronic workforce management system for construction workers. Additionally, Seoul operates a year-round Subcontracting Irregularities Reporting Center to protect subcontractors’ rights and resolve arrears. Over the past three years, it has received 465 complaints and resolved arrears amounting to 5.9 billion KRW.

Moreover, Seoul has established a Subcontracting Legal Counseling Center staffed with subcontracting ombudsmen to provide legal consultations related to subcontracting. Since 2019, it has provided legal support 118 times. Particularly, sites with numerous complaints have been visited by special inspection teams including subcontracting ombudsmen with lawyer qualifications to investigate complaints, conduct audits, or directly participate in the complaint resolution process with the ordering agency to support complaint resolution.

Lee Hae-woo, Chairman of the Seoul Audit Committee, stated, “We will continue to pay close attention to ensure that various subcontracting payments such as wages and construction machinery rental fees are not delayed in construction projects commissioned by Seoul and its affiliated organizations, and we will strive to improve systems to prevent arrears.”