South Korea to launch electronic payment system for construction wages by 2028

The South Korean government announced plans to build a next‑generation electronic payment system that will obligate owners to pay construction subcontractors and workers directly, eliminating the multi‑layered subcontracting structure that has enabled wage arrears. The system, to be piloted from January 2028, will apply to both public and private construction projects and will route funds even if the accounts of prime or sub‑contractors are seized, protecting workers and equipment operators.

The policy responds to more than 4 trillion won in construction wage arrears recorded over the past three years, with 1.176 trillion won incurred in just the first four months of 2024. The Ministry of Economy and Finance, Ministry of Land, Infrastructure and Transport, and the Public Procurement Service will transfer operational responsibility to the Ministry of Land. A joint task force will integrate the new system with existing monitoring tools such as KISCON and the “Chebul eZero” platform, aiming to improve transparency and prevent illegal subcontracting.