We are an electrical subcontractor operating mainly in Pennsylvania. More often than not, whenever we submit monthly billings our GCs take 60+ days to pay out. When asked about payment, they usually reply, "contract is pay when paid" and we haven't been paid. My question is twofold, first does the PA Payment Protection Act, stipulate that payment must be received by a subcontractor 14 days after we submit a monthly AIA invoice? Or can GCs just continue to pay us when they feel like it? And secondly, does the above law in PA make the contingent "pay when paid" moot? Even if a contract states "pay when paid?"
I wanted to agree and piggyback with the response from Mr. Windish. Pennsylvania's Contractor and Subcontractor Payment Act ("CASPA") requires owners and GC's to pay promptly following "Performance by a contractor or subcontractor in strict accordance with the provisions of a contract." 73 P.S. 504. Accordingly, if the contract's terms state that it's pay-when-paid, that's when the prompt payment is triggered. If the contract is silent on pay-when-paid, CASPA says that the contractor bill to the owner is due at the end of the billing period. Unless the contract says otherwise, payment from the owner is due 20 days after the later of end of the billing period or delivery of invoice.
As Mr. Windish noted, CASPA also requires that GC's disclose to their subcontractors when the GC's invoices to the owner are due for payment. If the GC fails to provide this information, CASPA sets the presumed default payment at 20 days from the date of the GC's invoice to the owner. CASPA further mandates that subcontratcors must be paid within 14 days of the GC's receipt of a payment which was based on those subcontractors' contributions.