North Korean authorities have moved to revoke authorization for state agencies and trading companies to send workers abroad, and are also re-evaluating the profitability of existing labor contracts. Going forward, Pyongyang plans to approve only contracts that guarantee sufficient foreign currency for the state. Officials will weigh the final sale price of goods North Korean workers produce, along with the profits earned by foreign employers.
The policy shift may help explain recent reports, which claimed that an employer’s recruitment of North Korean workers reportedly collapsed over wage disputes.
According to foreign media including NK News, the Russian city of Orenburg tried last year to hire North Korean workers. The jobs were for public sanitation and other municipal work, but the deal fell through over pay. The city could offer 55,000 Russian rubles a month, about $715; however, hiring North Korean workers reportedly costs two to three times that amount.
A source familiar with North Korea’s foreign economic affairs cautioned against a simple reading of the failed deal, saying it was not just wage inflation or a bargaining tactic. Since late 2025, North Korean authorities have fundamentally overhauled how they approve overseas labor contracts. Low-profit deals are now rejected outright.
Having a permit doesn’t mean endless dispatch
North Korea effectively revoked existing dispatch permits after a December 2025 plenary meeting, the source said. That was an expanded meeting of the 13th Plenary Session of the Eighth Central Committee of the Workers’ Party of Korea. The permits are known as wakku.
A wakku is a state-issued authorization. It lets a North Korean agency or trading company do business or dispatch workers in a specific country. In the past, an agency that secured a wakku typically built its own footing abroad. It then negotiated dispatch numbers and wages directly with local employers.
Under the new policy, even long-running operators need fresh approval. Companies that have run overseas worksites or dispatched workers for years must now seek central government sign-off, the source said.
“It’s not that having one wakku means you can keep sending people out like before,” the source said. “After the plenary meeting, the authorities collected all the existing wakku. They started reassessing contract terms and how much money comes into the state. Even a company that has sent people abroad for years won’t get an extension if it doesn’t meet the new standard.”
The Workers’ Party first communicated the plenary decision to foreign-economic-affairs units, the source said. It became concrete policy around the Ninth Party Congress in February 2026, and officials placed particular emphasis on selecting projects that bring real profit to the state.
State guards against low-value deals: ‘Don’t hand over workers cheap’
North Korean authorities are most wary of low-price contracts that don’t sufficiently benefit the state, and officials have reportedly been ordered not to accept low wages in fields such as sanitation, basic farming or construction support. That holds even when employers cite labor shortages or long-standing business ties.
North Korean authorities have reportedly conveyed the instruction using a blunt phrase: don’t sell people cheap.
“The new policy is: don’t hand workers over just because someone says they need people,” the source said. “If sending workers out right now wouldn’t leave the state with a solid enough gain, don’t sign the contract. In the end, they’ve decided it’s fine not to send people if the state doesn’t get the share it wants.”
Overseas labor contracts involve more than workers’ wages, and include the dispatching agency’s operating costs and the local manager’s living expenses. Workers’ room, board and transportation are factored in too, along with the cost of work clothes and equipment. State quotas and various foreign-currency assessments are added on top.
That may be why North Korea is trying to use Russia’s severe labor shortage as leverage. Rather than simply sending more workers, Pyongyang appears to be limiting the labor supply. The goal is to push up contract prices and maximize the foreign currency flowing into the state.
Pyongyang now weighs a product’s final sale price and profit
The way North Korea reviews dispatch contracts has also changed significantly, the source said. In the past, officials mainly examined the contract signed with the local employer. That partner is known in North Korean parlance as a daebang, or trading counterpart. Officials also looked at the number of workers, wages, and housing and working conditions.
Under the new policy, dispatching agencies must submit far more. They must show the full production and distribution chain their workers are part of, which includes what raw materials workers use and where those materials come from. It also covers how many times the product is processed, and which companies handle intermediate processing and distribution.
Agencies must also submit analysis of the product’s final export destination and buyer. They must disclose its final sale price in the local or a third-country market, and they must show whether workers’ wages are reasonable relative to that final price and overall profit.
“These days, you can’t just hand over a single contract with your trading partner and expect to get a wakku,” the source said. “You have to write down where the raw materials come from, what North Korean workers make, and how many times that product is processed. You have to say which company in which country it ends up with. They also make you disclose the final sale price, because they want to see whether the trading partner is making a fortune while paying workers next to nothing.”
The shift suggests North Korea has begun setting compensation based on the value workers’ labor adds to a product. It also appears aimed at stopping local officials from underreporting contract amounts or pocketing the difference.
A logic that echoes Kaesong wage talks
The approach partly echoes how North Korea negotiated wages at the Kaesong Industrial Complex, an inter-Korean joint economic zone that operated in North Korea until its 2016 closure. North Korea made labor conditions, including wages, a central bargaining issue there. That was especially true at a 2015 meeting of the South-North joint committee overseeing the complex.
The common thread is the same idea in both cases. Wages, in this view, should reflect the profit a foreign employer earns from North Korean labor. They should also reflect the share that flows back to North Korea, not simply the hours worked.
There are differences, though. Kaesong wages were negotiated within a framework of inter-Korean agreements and complex labor regulations. Today’s overseas labor dispatch is controlled directly by North Korean authorities: they review the profitability of each contract by country and industry, and withhold wakku from deals that fall short. Pyongyang now effectively sets the price of the labor it supplies abroad from the center and blocks contracts that don’t meet the state’s target return before they can even begin.
Higher contract prices don’t necessarily mean higher worker pay
Even if North Korea manages to raise the per-worker contract price, workers are unlikely to see a proportional rise in take-home pay. State levies, the dispatching agency’s operating costs, room and board, and local management fees are all deducted from the contract amount. What North Korean authorities emphasize is not workers’ wages or rights. It’s the final net gain the state can secure through overseas dispatch, according to the source.
A Daily NK AND Center investigation looked into forced labor conditions at Chinese seafood-processing plants. It found a similar gap between contract wages and actual pay. North Korean workers were supposed to earn roughly 3,000 Chinese yuan, about $443, a month under their contracts. But some received only 10% to 20% of that amount.
“The factory pays more than 3,000 yuan, I think, but what I actually get is around 300 to 500 yuan,” about $44 to $74, one North Korean worker dispatched abroad said, according to the Daily NK AND Center report. “Sometimes I get 800 yuan,” about $118. “Seventy to 80% goes to the state. Even after working in the cold and sweating in the heat, we only get back 10% to 20%.”
Orenburg Mayor Albert Yumadilov earlier suggested, somewhat indirectly, why the hiring push failed. He said North Korean workers earn the equivalent of $1,400 to $2,100 a month domestically. That implied it would take roughly that much to employ them in Russia.
Peter Ward, a research fellow at South Korea’s Sejong Institute, said a monthly wage of $2,000 is out of reach even for an ordinary worker inside North Korea. If North Korea did ask Russia for that amount, he said, two things are likely at play. One is a judgment that existing dispatch programs, including those in China, have not generated the expected returns. The other is a miscalculation about how overseas labor markets actually work.
Ward also cautioned against treating a worker’s contract price as equivalent to that worker’s personal wage. Brokerage fees and local management costs vary depending on the type of work involved, on top of state levies, he said.
Short-term jobs handled by small work teams have a different profit structure altogether, Ward said. North Koreans call these billed projects. Ultimately, he said, it is necessary to break down the amount North Korea demands: some goes to the dispatching agency, brokers and local managers, while the rest reaches individual workers.
Taken together, the wakku revocation and re-review show a shift in direction. North Korea is moving away from sending large numbers of workers abroad cheaply and is moving toward tightly controlling a smaller, more expensive labor supply.
Pyongyang’s slogan of self-reliance and self-determination should not be read simply as a call to reduce dealings with the outside world; it also reflects an economic calculation. The goal is to centralize control over revenue generated abroad, and restructure foreign economic activity, including labor dispatch, to maximize the benefit to the state.
“To actually trace the flow of money, you have to keep in touch with local employers, brokers and other industry contacts,” Ward said. “You have to find out why contract prices are changing and how that money gets divided.”
Ward added that the issue of North Korean overseas workers should not be limited to labor exploitation and human rights violations alone. “Access to information and the flow of outside information also need to be addressed,” he said, “so workers can judge their own circumstances and the outside world for themselves.”
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July 28, 2026 at 07:23PM
by DailyNK(North Korean Media)