Louisiana Prompt Payment Guide and FAQs

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Louisiana Prompt Payment Overview

Louisiana Prompt Payment Requirements


  • Private Jobs
  • Public Jobs
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NO
DAYS
Prime Contractors

Not specified in state statutes


14
DAYS
Subcontractors

For Subcontractors, payment due qithin 14 days after receving payment from above.


14
DAYS
Suppliers

For Suppliers, payment due qithin 14 days after receving payment from above.


0.5%
/ DAY
Interest & Fees

Penalty imposed at 0.5% per day (but not more than 15% of payment due). Attorneys' fees for collection of amount due. Note, however, Louisiana specifically provides that all fees for defense can be awarded to the nonpaying party if the claim was made "without merit."

45
DAYS
Prime Contractors

For Prime (General) Contractors, progress payments due according to the contract. Final/Retainage payment due 45 days from receipt of "clear lien certificate." For highway prijects, progress payments due 30 days after invoice, and final/retainage payment due 45 dyas from substantial completion of the project.


14
DAYS
Subcontractors

For Subcontractors, payment due within 14 days after payment received from above.


14
DAYS
Suppliers

For Suppliers, payment due within 14 days after payment received from above.


0.5%
/ DAY
Interest & Fees

Penalty imposed at 0.5% per day (but not more than 15% of payment due). Attorneys' fees fto prevailing party.

Louisiana’s prompt payment statutes set forth specific timeframes when general contractors, subcontractors, suppliers, and others involved with a construction project must be paid.  This page provides an overview of these regulations, and addresses some frequently asked questions related to the Louisiana prompt payment laws.

Louisiana Prompt Payment Frequently Asked Questions

Louisiana Prompt Payment Private Projects FAQs

Do I have to send a letter or file anything to qualify for Prompt Payment Penalties or Remedies in Louisiana?

Louisiana prompt pay statutes do not apply to residential projects, nor that applies to GCs on any private project. If the prompt payment provisions apply, there is no specific requirement to qualify other than completion of the work that is to be paid. Attorneys fees may be recovered for the collection of past due payment.

Can I include Prompt Payment Fees in my Louisiana Mechanics Liens Claim or Bond Claim?

No. Louisiana doesn’t allow miscellaneous amounts to be included on the face of a mechanics lien.

If I am paid late according to Prompt Payment Statutes, can I obtain interest or other Penalty Payments?

Louisiana law sets forth a penalty for late payments amounting to 0.5% of the amount due per day payment is late. However, these penalties may not exceed 15% of the total amount due. It is worth noting that Louisiana not only provides for attorneys’ fees to the party requesting payment, but in the even the claim for payment is meritless, the claimant may be on the hook for the attorneys’ fees and costs for the paying party’s defense of the meritless claim.

Are there reasons for which payment may be withheld past the general deadline?

Louisiana does not specifically identify reasons for which payment may be withheld, so it is likely that the contract between the parties will govern the particular reasons on a case-by-case basis.

What is the best practice for making a demand to a non-paying party to get Prompt Payment Fees?

Sending a notice of intent to lien and prompt payment demand is generally the best method for encouraging parties to make payment.

Louisiana Prompt Payment Public Projects FAQs

Do I have to send a letter or file anything to qualify for Prompt Payment Penalties or Remedies in Louisiana?

For Louisiana prompt payment provisions to apply to the benefit of GCs, a “clear lien certificate” must be provided to the public entity. There is no specific requirement for subs/suppliers to qualify for protection other than completion of the work that is to be paid. Attorneys fees may be recovered for the collection of past due payment.

Can I include Prompt Payment Fees in my Louisiana Mechanics Liens Claim or Bond Claim?

No. Louisiana law does not allow for the recovery of miscellaneous amounts in a bond claim.

If I am paid late according to Prompt Payment Statutes, can I obtain interest or other Penalty Payments?

For protection of GCs, interest will begin to accrue 45 days after the public entity’s receipt of a clear lien certificate, with no further action required by the contractor.

For protection of subs/suppliers, Louisiana law sets forth a penalty for late payments amounting to 0.5% of the amount due for each day payment is late. However, these penalties may not exceed 15% of the total amount due.

Parties seeking late payment may be awarded attorney’s fees in the event of a lawsuit. However, if the claim is found to be without merit, the claimant may be responsible for the defense’s attorney’s fees and other costs.

Are there reasons for which payment may be withheld past the general deadline?

Louisiana does not specifically identify reasons for which payment may be withheld, so it is likely that the contract between the parties will govern the particular reasons on a case-by-case basis.

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Louisiana Prompt Payment
Recent Questions & Answers

retainage vs prompt payment

What if State Law allows 5% Retainage. Do Prompt Payment Requirements negate the Developer or GC from holding Retainage? Retainage Act provisions says "A. Except...

What can I do at this late date?

I did not file a mechanic lien, when I should have. It's been more then a year, then I came across the invoices that were...

Suppliers

Cite a case or statute that lets suppliers get prompt pay please

Louisiana Prompt Payment Statute FAQs

Getting informed about prompt payment laws is important. An examination of Louisiana’s prompt payment laws, the rules and regulations related to payment timing, is important to know your rights and responsibilities as a party on a construction project. Louisiana’s specific laws can be found in: La. Rev. Stat. §§ 9:2784, 38:2191, and 48:251.5 , and are reproduced below.

Prompt Payment Statute on Private Projects

9:2784: Late Payment by Contractors to Subcontractos and Suppliers; Penalties

A.  When a contractor receives any payment from the owner for improvements to an immovable after the issuance of a certificate of payment by the architect or engineer, or when a contractor receives any payment from the owner for improvements to an immovable when no architect or engineer is on the job, the contractor shall promptly pay such monies received to each subcontractor and supplier in proportion to the percentage of work completed prior to the issuance of the certificate of payment by such subcontractor and supplier, or by the owner if no architect or engineer is on the job.  Further, whenever a subcontractor receives payment from the contractor, the subcontractor shall promptly pay such monies received to each sub-subcontractor and supplier in proportion to the work completed.

B.  If for any reason the contractor receives less than the full payment from the owner, then the contractor shall be obligated to disperse only the funds received on a prorated basis with the contractor, subcontractors, and suppliers each receiving a prorated portion based on the amount due on the payment.

C.  If the contractor or subcontractor without reasonable cause fails to make any payment to his subcontractors and suppliers within fourteen consecutive days of the receipt of payment from the owner for improvements to an immovable, the contractor or subcontractor shall pay to the subcontractors and suppliers, in addition to the payment, a penalty in the amount of one-half of one percent of the amount due, per day, from the expiration of the period allowed herein for payment after the receipt of payment from the owner.  The total penalty shall not exceed fifteen percent of the outstanding balance due.  In addition, the contractor or subcontractor shall be liable for reasonable attorney fees for the collection of the payments due the subcontractors and suppliers.  However, any claim which the court finds to be without merit shall subject the claimant to all reasonable costs and attorney fees for the defense against such claim.

D.  The provisions of this Section shall not be applicable to improvements to an immovable that is used for residential purposes.

Prompt Payment Statute on Public Projects

9:2784: Late Payment by Contractors to Subcontractos and Suppliers; Penalties

A.  When a contractor receives any payment from the owner for improvements to an immovable after the issuance of a certificate of payment by the architect or engineer, or when a contractor receives any payment from the owner for improvements to an immovable when no architect or engineer is on the job, the contractor shall promptly pay such monies received to each subcontractor and supplier in proportion to the percentage of work completed prior to the issuance of the certificate of payment by such subcontractor and supplier, or by the owner if no architect or engineer is on the job.  Further, whenever a subcontractor receives payment from the contractor, the subcontractor shall promptly pay such monies received to each sub-subcontractor and supplier in proportion to the work completed.

B.  If for any reason the contractor receives less than the full payment from the owner, then the contractor shall be obligated to disperse only the funds received on a prorated basis with the contractor, subcontractors, and suppliers each receiving a prorated portion based on the amount due on the payment.

C.  If the contractor or subcontractor without reasonable cause fails to make any payment to his subcontractors and suppliers within fourteen consecutive days of the receipt of payment from the owner for improvements to an immovable, the contractor or subcontractor shall pay to the subcontractors and suppliers, in addition to the payment, a penalty in the amount of one-half of one percent of the amount due, per day, from the expiration of the period allowed herein for payment after the receipt of payment from the owner.  The total penalty shall not exceed fifteen percent of the outstanding balance due.  In addition, the contractor or subcontractor shall be liable for reasonable attorney fees for the collection of the payments due the subcontractors and suppliers.  However, any claim which the court finds to be without merit shall subject the claimant to all reasonable costs and attorney fees for the defense against such claim.

D.  The provisions of this Section shall not be applicable to improvements to an immovable that is used for residential purposes.

38:2191: Payments Under Contract

A.  All public entities shall promptly pay all obligations arising under public contracts when the obligations become due and payable under the contract.  All progressive stage payments and final payments shall be paid when they respectively become due and payable under the contract.

B. Any public entity failing to make any progressive stage payment within forty-five days following receipt of a certified request for payment by the public entity without reasonable cause shall be liable for reasonable attorney fees. Any public entity failing to make any final payments after formal final acceptance and within forty-five days following receipt of a clear lien certificate by the public entity shall be liable for reasonable attorney fees.

C.  The provisions of this Section shall not be subject to waiver by contract.

D. Any public entity failing to make any progressive stage payments arbitrarily or without reasonable cause, or any final payment when due as provided in this Section, shall be subject to mandamus to compel the payment of the sums due under the contract up to the amount of the appropriation made for the award and execution of the contract, including any authorized change orders.

48:251.5: Payments Under Contract

A.  The department shall promptly pay all obligations arising under public contracts within thirty days of the date the obligations become due and payable under the contract.  All progressive stage payments and final payments shall be paid when they, respectively, become due and payable under the contract.

B.(1)  If the department fails to make any final payments after recordation of formal final acceptance and within forty-five days following receipt of a clear lien certificate by the department, the department shall be liable for legal interest on the balance due on the contract.

(2)  If the final estimate by the department’s engineer is not completed by the expiration of the period prescribed in this Subsection, the retainage or other payments known by the department to be due and payable shall be released, but the contractor and the contractor’s surety shall remain liable for any overpayment by the department to the contractor, stipulated damages for delay in completion or work necessary to repair latent defects, or in performance of warranty work under the contract.

(3)  If the department fails to make final payment as provided or neglects to promptly ascertain the final estimated quantities under the contract in bad faith, then the contractor shall be entitled to attorney fees if a mandamus to perform such acts is necessary for the contractor to receive all monies due and owed the contractor under the contract.

C.  The provisions of this Section shall not be subject to waiver by contract.

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