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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Ministry of Land, Infrastructure and Transport (MOLIT) announced on June 16 that amendments to the Enforcement Decree of the Construction Industry Basic Act have been approved at a Cabinet meeting, aiming to eradicate illegal subcontracting practices in construction sites.
Under the revised rules, rewards for whistleblowers reporting illegal subcontracting will be significantly increased. Previously capped at 2 million won, the reward ceiling has been abolished, allowing payouts of up to 30% of the total administrative fines imposed.
For example, under the previous system, a report leading to a fine of 189 million won would yield a maximum reward of 2 million won. Under the new rules, the whistleblower could receive up to 56.7 million won.
The burden of proof for whistleblowers will also be eased. Previously, reporters were required to submit concrete evidence to prove illegal activities. Going forward, detailed statements or circumstantial information will suffice, with authorities conducting investigations to verify violations before granting rewards.
MOLIT said that reports filed prior to the implementation of the amendment may also be eligible for rewards under the new criteria, subject to review once administrative penalties are finalized.
At the same time, administrative penalties for illegal subcontracting will be strengthened to the maximum level permitted by law.
Business suspension periods will be extended from the current 4–8 months to 8 months up to one year. Fines will also increase to 24–30% of the subcontract value, compared to the previous range of 4–30%.
Additionally, the restriction period for construction firms involved in illegal subcontracting from participating in public works projects will be expanded from the current 1–8 months to a minimum of 8 months and up to two years.
The government said the measures are intended to curb long-standing unfair practices in the construction industry and enhance accountability across the sector.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
