Hired directly . second half of payment is late. what can I do?
Mar 15, 2019
Late payment is frustrating and the potential remedies can be confusing. With respect to public projects in California, the general remedies for late or non-payment are stop notices (which works to freeze contract funds not yet paid the the direct contractor) or bond claims (asserted against the payment bond generally required to be obtained by the direct contractor). When the party suffering the slow payment has contracted directly with the public entity, through, neither of these remedies apply.
When a direct contractor needs to look for a way to get payment moving there are still some options, however. First, California has prompt payment statutes specifically put in place to protect parties against slow payment. With respect to public projects, a public entity must pay a direct contractor within 30 days after receipt of an undisputed payment request. If a payment request is disputed, by the public entity, the request must be returned to the direct contractor noting the dispute within 7 days after the request was originally received. Failure to make the payments in the time required subjects the public entity to interest at a rate of 10% per year for the past-due amounts. Sending a notice or demand for payment pursuant to the prompt payment statutes can sometime work to shake payment loose.
Additionally, there is always the ability to file a lawsuit for breach of contract, unjust enrichment, or other causes of action. A letter outlining the intention to proceed with such a suit if payment is not made according to the terms of the contract can also sometimes be successful in jump-starting payment.
In any case, though, it's always a good idea to initiate a conversation with the non-paying party in order to clear up any confusion there may be, and talk out the issue.