LH to abolish cap on rewards for reporting illegal subcontracting

[Financial News] The cap on rewards for reporting illegal subcontracting at Korea Land and Housing Corporation (LH) construction sites will be abolished. Reports will be accepted based on specific statements and circumstantial information alone, even without supporting evidence. A new ‘first-stage reward’ will also provide part of the reward before a final decision is issued.
According to LH on the 7th, the overhaul of its reporting and reward system was undertaken in line with the amendment to the Ministry of Land, Infrastructure and Transport’s Enforcement Decree of the Framework Act on the Construction Industry, which took effect in June. The aim is to ease the psychological and procedural burden on people making reports, prevent illegal subcontracting and foster a transparent construction culture.
The biggest change concerns the amount of the reward. The previous cap of 30 million won has been scrapped, and rewards will be paid at up to 30% of the penalty surcharge imposed. Under the newly introduced first-stage reward system, LH will initially pay 10% of the estimated amount, up to 500,000 won, when its own investigation confirms an illegal act and it requests that the competent administrative authority take action. The change takes into account the long time it can take from the filing of a report to a final administrative decision.
The threshold for filing a report has also been lowered. Until now, people had to submit clear evidence of illegal activity, such as documents or photographs. Going forward, reports will be accepted based on statements and circumstantial tips alone, and LH will conduct its own investigation based on them.
The amendment to the Enforcement Decree underpinning the changes passed a Cabinet meeting on June 16. At the time, the Ministry of Land, Infrastructure and Transport abolished the cap on reporting rewards, which had been set at a maximum of 2 million won, and allowed rewards of up to 30% of the penalty surcharge. It also extended the business suspension period for companies engaged in illegal subcontracting from 4–8 months to 8 months–1 year.
Publicly commissioned construction sites are no exception. A joint inspection by the Ministry of Land, Infrastructure and Transport and the Ministry of Employment and Labor at 1,814 construction sites nationwide in August and September last year uncovered 262 violations at 95 sites. Of those, 27 cases were found at 16 public construction sites.
The reporting process is shifting to a mobile-first system. Scanning a QR code posted at a site with a smartphone will immediately open the report submission screen, and notifications will be sent at each stage of processing after a report is filed.
LH will put up posters and banners bearing QR codes at construction sites nationwide and hold on-site information sessions. The day before, it explained the revised system to site personnel at the Namyangju Jinjeop 2 A7BL apartment construction site and demonstrated how to scan the QR code.
LH President Lee Seong-hoon said, “We have strengthened the institutional framework to eradicate illegal subcontracting, which threatens safety and quality at construction sites, including by lowering the barriers to reporting and abolishing the cap on reporting rewards. We will do our utmost to ensure that a fair work culture takes firm root, where construction workers are treated fairly and can work with peace of mind.”
[email protected] Jeong Gyeong-su Reporter