- Prompt action on unpaid subcontract payments and support for early payment before the holiday -
The Korea Fair Trade Commission (KFTC, Chairman Han Ki-jeong) announced that it will operate an “Unfair Subcontracting Reporting Center” for 50 days, from August 14 to October 2, 2025, to ensure that small and medium-sized subcontractors receive timely payments ahead of the Chuseok holiday.
Since SMEs’ demand for funds surges during the holiday season due to bonus payments and other expenses, the KFTC will encourage prime contractors to make payments on time before Chuseok. For unpaid amounts, the KFTC will actively induce voluntary corrections by prime contractors or agreements between the parties, and if necessary, conduct on-site investigations to promptly handle cases.
The Reporting Center will be set up and operated in 10 locations across five regions: Seoul Metropolitan Area (5), Daejeon/Chungcheong (2), Busan/Gyeongnam (1), Gwangju/Jeolla (1), and Daegu/Gyeongbuk (1). In addition to KFTC headquarters and regional offices, a center will also be installed at the “Subcontract Dispute Mediation Council” so that small subcontractors can easily report cases. Reports may be filed by mail, fax, through the KFTC website (www.ftc.go.kr), or by telephone consultation.
This system allows complainants to receive assistance on unpaid payments through simple phone consultations in a relatively short time, while respondents (prime contractors) can resolve disputes before they escalate into formal cases, thereby avoiding corrective measures or penalties by the KFTC.
Furthermore, the KFTC will request major business organizations—including the Korea Chamber of Commerce and Industry, Korea Employers Federation, Federation of Korean Industries, Construction Association of Korea, Korea Automobile Manufacturers Association, Korea Electronics Association, Korea Offshore & Shipbuilding Association, Korea Federation of Textile Industries, Korea Federation of Middle Market Enterprises, and Korea Fair Competition Federation—to encourage their member companies to make subcontract payments on time before Chuseok. The KFTC will also ask major corporations to cooperate in advancing payments originally scheduled after the holiday to before Chuseok whenever possible.
During the last Lunar New Year holiday, the KFTC’s Reporting Center helped secure payment of a total of 212 cases worth approximately 30.4 billion KRW in overdue subcontract payments, and facilitated early payment of around 3.7476 trillion KRW to 19,296 subcontractors before the holiday.
The KFTC expects that operating the Reporting Center for 50 days will not only prevent violations of the Subcontracting Act but also provide an opportunity for prime contractors to make early payments voluntarily and correct practices proactively.