Gyeonggi Province and GH to Expand Direct Payment System to Include Construction Machinery and Material Fees

Gyeonggi Province and Gyeonggi Housing and Urban Development Corporation (GH) are establishing a joint response system to prevent wage arrears for construction workers, as well as delays in payments for subcontractors, construction machinery, and materials at 51 project sites carried out by GH.

On July 29, Gyeonggi Province held the kickoff meeting of the “Province-GH Construction Project Wage Arrears Prevention Task Force (TF)” at the provincial government office. At the meeting, participants discussed the implementation directions for four key prevention measures: expanding direct payment for construction machinery and material fees, establishing a wage arrears reporting and monitoring system, expanding the advance notification system for payments, and strengthening pre-consulting for subcontractors at construction sites.

The goal of these measures is to achieve “AE_ZERO” for wage arrears at GH construction sites. The acronym “A·E_ZERO” stands for making wage and contract payment arrears always (Always) and everywhere (Everywhere) zero (ZERO), and is pronounced “A-ye Zero” in Korean, meaning “completely zero.”

Gyeonggi Province and GH plan to manage risk factors for payment delays at every stage—from ordering and contracting, through construction, to payment of project fees—so construction workers, subcontractors, construction machinery lessors, and material suppliers working on site can receive timely compensation for their work.

The dedicated TF is led by the Head of Gyeonggi Province's Spatial Strategy Division, with participation from the Provincial Spatial Strategy Division, GH's Contract Management Department, and other related departments. Gyeonggi Province will oversee tasks such as adjusting policy improvement agendas, monitoring implementation progress, and receiving wage arrears reports. GH will be responsible for revising internal regulations, reflecting changes in bid announcements and contract terms, and managing compliance at construction sites. When a wage arrears report is received, both organizations will jointly inspect the site and monitor the results of their actions.

Gyeonggi Province is holding a kickoff meeting for the Zero Wage Arrears Prevention Task Force with Gyeonggi Housing and Urban Corporation (GH) at the provincial office on the 29th. Provided by Gyeonggi Province

During the meeting, participants discussed expanding the current direct payment system—which is mainly applied to subcontractor fees and wages—to cover payments for construction machinery and key materials. They also considered linking the wage arrears reporting center with the monitoring system so that signs of arrears at the sites can be detected early.

In addition, it was discussed how to expand the payment advance notification system, which informs subcontractors and construction workers in advance about the payment of advance payments, progress payments, and completion payments. There was also discussion on reinforcing pre-consulting services to provide guidance on relevant laws and compliance requirements to both main contractors and subcontractors.

Gyeonggi Province and GH plan to finalize specific procedures and clarify the roles of each institution through regular meetings and practical consultations, as well as revise relevant regulations and contract terms. In this way, they intend to proactively manage the entire process from contracting to payment, rather than only taking follow-up actions after arrears have occurred.

Lee Myung-seon, Head of the Spatial Strategy Division at Gyeonggi Province, said, “This TF was launched as an active administrative initiative in line with the ninth term of the provincial government’s aim to create a ‘workplace free of discrimination and unfair practices.’ We will achieve ‘completely zero’ wage arrears at GH construction sites to fulfill the fair labor administration goals of the ninth provincial government on site.”

This content was produced with the assistance of AI translation services.