The government will conduct intensive inspections at 275 public construction sites suspected of illegal subcontracting or reported for such practices until the end of the year. Companies that voluntarily report violations during the inspection period and rectify them may receive a reduction of up to 50% in administrative penalties. Additionally, rewards for reporting can be up to 30% of the imposed fines.
On October 7, the Ministry of Land, Infrastructure and Transport announced that from October 12 until the end of this year, it will carry out focused inspections in collaboration with the top 10 public agencies, including the Korea Land and Housing Corporation (LH), the Korea National Railway Authority, and the Korea Expressway Corporation. More than 130 personnel from the ministry and public agencies will be involved in the inspections.
The inspections will target the 275 public sites identified through reports or suspected of illegal subcontracting, utilizing artificial intelligence (AI) for detection. Upon receiving reports from site personnel or third parties, the ministry plans to verify the facts and link them to on-site inspections and administrative actions.
The reward system for reporting has also been strengthened. In June, the ministry relaxed the requirements for submitting evidence and eliminated the cap on rewards. Depending on the scale of the fines, rewards can be given up to 30%. For instance, if a fine of 1 billion won is imposed due to illegal subcontracting, the reward could reach up to 300 million won.
This crackdown will also implement a self-reporting system. Companies that voluntarily report illegal subcontracting and correct violations within the specified period during the intensive inspection phase can receive a reduction of up to 50% in administrative penalties.
However, the enforcement of the construction industry basic law, which includes the basis for penalty reductions, will not take effect until January next year. The ministry plans to apply the reduction provisions to companies that complete self-reporting and corrections during this year's intensive inspection period once the enforcement decree is in effect.
In May, the ministry inspected 75 construction sites in the metropolitan area and uncovered 29 cases of illegal subcontracting involving 26 companies at 18 sites. The most common violations included subcontracting to unregistered construction firms (20 cases), violations of subcontracting regulations (5 cases), and illegal subcontracting to unqualified firms (4 cases).
Kim I-tak, the first vice minister of the Ministry of Land, Infrastructure and Transport, stated, "Illegal subcontracting can lead to major industrial accidents and poor construction, as well as wage arrears. We will establish a system to eradicate illegal subcontracting through reporting, inspections, and voluntary corrections."
* This article has been translated by AI.
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