Freelancer Escrow Service Launch in January Next Year
Field Opinions Collected and Reflected Through Two Meetings
Business Agreement with Shinhan Bank on 24th... Mutual Cooperation
To guarantee payment for freelancers exposed to unfair practices such as delayed payments due to not being covered by labor relations laws, Seoul City is introducing the 'Third-Party Escrow System,' the first of its kind among public institutions.
On the 24th, the city announced that starting January next year, it will launch the 'Freelancer Escrow Service,' where banks or other institutions will hold payments for freelance jobs secured by individual freelancers. After holding meetings with freelancers in fields such as instructors, webtoons, and IT development in May and July, the city developed this service based on field feedback, including affordable fees, prompt payment deposits, and dispute mediation between freelancers and clients.
The Freelancer Escrow Service operates by linking payment transactions between freelancers and clients through an escrow system. After the task is completed, the client requests the bank to release the payment to the freelancer. The city plans to establish a system by December on the 'Seoul Labor Portal' for entering contract information and escrow payment transaction details.
The escrow service will be provided free of charge. However, users will bear fees associated with payment methods such as card payments, and job matching will not be supported.
On the same day, Seoul City and Shinhan Bank will sign a business agreement at Seoul City Hall to support the Freelancer Escrow Service. Kim Sang-han, the First Deputy Mayor for Administration, and Lim Su-han, Vice President of Shinhan Bank, will attend. Through this agreement, the city and Shinhan Bank plan to support escrow services, contract information management, payment processing, and dispute counseling.
Meanwhile, the city plans to develop a 'Freelancer Career Management System' next year to allow escrow transaction records to be linked to freelancers' career histories.
Song Ho-jae, Director of the Seoul City Livelihood and Labor Bureau, stated, "To prevent cases where the rapidly increasing number of freelancers suffer violations of labor rights such as unpaid or delayed payments, Seoul City has decided to introduce the escrow service as the first public institution." He added, "We will take the lead in fostering a fair contract and labor culture for vulnerable workers such as freelancers."
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