What are the prompt payment laws for Illinois and Missouri?
1 reply
Dec 18, 2019
Illinois Prompt Payment Laws
The Illinois prompt payment provisions have similar but separate protections for private and public projects.
Private projects
Once an owner receives an invoice from the GC, the request must be approved within 25 days and then released within 15 days after the invoice is approved. As for other payments down the chain, when the higher-tiered party receives payment, the funds should be passed down within 15 days as well. Late payments will accrue interest ar 10% per year.
Public projects
On public projects, the deadlines differ a bit. The contracting public entity must approve within 30 days, and once approved, payment must be made within 30 days. So a total of 60 days from when the invoice was received. All other payments follow the same 15-day turnaround as private projects. The interest penalty will accrue at 1 or 2% per month, depending on whether late payment is made to the GC or any other party.
Missouri Prompt Payment Laws
Missouri's prompt payment laws also cover both private and public projects; however the private project protections aren't nearly as comprehensive.
Private projects
Payment deadlines on private projects are determined by the contract terms between the parties. But the statute does provide late payment penalties in the form of interest at a rate of 1.5% per month.
Public projects
As for public projects, prime contractors must be paid within 30 days of receipt of the invoice, or the date the work or materials are provided; whichever is later. Final payments are due within 30 days of completion of the project. All other payments on the project must be passed down within 15 days of receipt from the higher-tiered party. The interest penalty, 1.5% per month, is the same for both private and public projects.