Preventing Wage Arrears in Construction Industry... Expanding Targets for Separate Payment of Wages and Construction Costs

Expansion from 50 Million Won or More to 30 Million Won or More

On the 8th, the government held a Cabinet meeting at the Government Seoul Office in Jongno-gu, Seoul, and reviewed and approved the amendment to the Enforcement Decree of the Act on Employment Improvement of Construction Workers that includes strengthening the prevention of wage arrears for construction workers and guaranteeing basic working conditions.

In response to the recent deepening of wage arrears in the construction industry due to the downturn in the construction market, the government will expand the scope of application of the 'Separate Payment and Verification System for Wage Costs' to strengthen prevention of arrears. The system will be expanded from public construction projects with a contract amount of 50 million won or more to those with 30 million won or more.

The Separate Payment and Verification System for Wage Costs requires contractors of construction projects ordered by the state, local governments, or public institutions to pay wage-related costs separately from other construction costs to subcontractors. This system was introduced in November 2019 to prevent wage arrears for construction workers.

The Ministry of Employment and Labor stated, "This amendment to the enforcement decree is expected to strengthen employment stability for construction workers and contribute to improving unreasonable practices at construction sites."