Construction companies responsible for public contracting construction projects of 30 million won or more must also pay wages separately from construction costs. The target has been expanded from the previous 50 million won, as there have been issues in the construction industry where wages are delayed due to the use of labor costs to cover shortages in material costs.
The Ministry of Employment and Labor announced on the 8th that a revision bill for the 'Enforcement Decree of the Act on Improvement of Employment for Construction Workers' was reviewed and approved at the State Council meeting.
This revision of the enforcement decree is a measure in response to the deepening wage delays in the construction industry due to the recent contraction in the construction market.
Previously, the government had implemented the 'segregation of wage costs and confirmation system' in 2019 to prevent wage delays occurring in the construction industry. The system aims to ensure that the contractor pays the subcontractor's wages separately from other construction expenses and verifies the usage statement of the wages. It is intended to prevent the practice of mixing labor costs and material costs in payment, which leads to the diversion of labor costs.
Despite this, wage delays in the construction industry continue to occur. Last year, the total amount of wage delays in construction increased by 9.6% from the previous year to 478 billion won. Therefore, the government is expanding the application range of the segregation of wage costs and confirmation system from public contracting construction projects of 50 million won or more to those of 30 million won or more.
A Ministry of Employment and Labor official said, "We expect this revision of the enforcement decree to strengthen the employment stability of construction workers and contribute to improving unreasonable practices on construction sites."