Reward Cap for Reporting Illegal Construction Subcontracting Abolished, Up from 2 Million Won

The reward for reporting illegal subcontracting at construction sites will be significantly increased, and administrative penalties for companies caught in such practices will be strengthened.
The Ministry of Land, Infrastructure and Transport announced that a partial amendment to the Enforcement Decree of the Framework Act on the Construction Industry, which includes these measures, was approved at a Cabinet meeting today (June 16).
The amendment will take effect from the date of its promulgation.
Previously, the maximum reward for reporting unfair practices at construction sites, such as illegal subcontracting, was 2 million won. However, the cap has now been abolished, and the reward will be determined by considering the severity of the case, including the amount of the penalty imposed, significantly increasing the potential payout for whistleblowers.
For example, the Ministry explained that in a case where a penalty of 189 million won was imposed, the reward would have been 2 million won under the old rules, but under the new criteria, it could rise to 56.7 million won.
Furthermore, while reporters were previously required to secure and submit concrete evidence of illegal activities, they will now be eligible for rewards if they provide specific statements and circumstantial information, provided that the illegal activity is confirmed during the subsequent investigation and crackdown.
The Ministry plans to apply the revised reward criteria even to reports filed before the amendment takes effect, provided that administrative penalties such as fines are finalized after a review process.
The level of administrative penalties for illegal subcontracting will also be raised to the legal maximum.
The standard for business suspension will be increased from the current 4 to 8 months to 8 months to 1 year, and the minimum rate for imposing fines will be significantly raised, strengthening the existing range of 4 to 30 percent of the subcontracting price to 24 to 30 percent.
The period during which construction businesses involved in illegal subcontracting are restricted from participating in public works subcontracts will also be extended from the current 1 to 8 months to 8 months to 2 years.
The Ministry of Land, Infrastructure and Transport revised the relevant standards after acknowledging criticism that the existing standards for business suspension, fines, and restrictions on subcontracting participation were far below the legal maximum, failing to effectively deter illegal activities.
(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.