Nebraska Prompt Payment Requirements
- Private Jobs
- Public Jobs
On private projects, Nebraska property owners must pay the general contractor within 30 days after payment request. Retainage must be released within 45 days of the project's substantial completion.
General contractors in Nebraska must pay subcontractors within 10 days after receiving payment. This deadline applies to retainage payments as well.
Payment is due to material suppliers on private projects within 10 days after the hiring party receives payment.
Interest & Fees
Nebraska's Prompt Payment Act for private construction projects charges interest of 1% per month on late payments.
Public agencies in Nebraska must pay the Prime Contractor within 45 days after either receipt of an invoice or receipt of services, whichever is later.
On public construction projects, payments to subcontractors are not regulated by Nebraska statute.
On public construction projects, payments to suppliers are not regulated by Nebraska statute.
Interest & Fees
Nebraska's Prompt Payment Act for public projects sets the interest penalty equal to "the average short-term borrowing rate for the federal government during July of the previous year rounded to the nearest whole percentage” plus 3%.
Prompt payment laws in Nebraska set a deadline for payments on both public and private construction projects. If payment is late, interest penalties and attorney fees may apply. This page explains exactly when those laws apply on construction projects in Nebraska, and details the deadlines and penalties.
Projects Covered by Prompt Payment in Nebraska
The Nebraska prompt payment provisions are split into two sections, covering both private and public projects. These statutes govern the timing of all payments on construction projects, and impose penalties for late payment in the form of interest.
Payments on private projects are regulated by the Nebraska Construction Prompt Pay Act, found in Neb. Rev. Stat. §45-1201 et seq. These regulations apply to all private projects except residential projects of 4 units or fewer.
Payment Deadlines for Private Projects
On private construction projects in Nebraska, the property owner has 30 days to make payments to the prime contractor after receiving a payment request. In order to qualify, the prime contractor must perform in accordance with the contract, and submit a request for payment.
Once the prime contractor receives payment from the owner, they must pay their subcontractors and suppliers within 10 days. This 10-day payment deadline applies to all other payments made down the payment chain on private projects.
The property owner must pay retainage within 45 days of substantial completion of the project. Within 10 days of receiving the retainage payment from the owner, the GC must release retainage to subcontractors.
Penalties for Late Payment on Private Projects
For late payments on private projects in Nebraska, interest will accrue at a rate of 1% per month (or a pro rata fraction thereof). However, interest will only accrue if the non-paying party was notified by the contractor or sub. In addition, if the dispute goes to court, the court may award attorney fees to the prevailing party.
Note that Nebraska’s prompt payment provisions for private projects do provide certain reasons when payments can be properly withheld. However, if none of these exist, and payment is late or otherwise wrongfully withheld, the unpaid balance will be subject to interest penalties.
Payments on public construction projects in Nebraska are governed by the state’s Prompt Payment Act, found in Neb. Rev. Stat. §81-2401 et seq. These payment deadlines and penalties apply to all public works projects within the state except those related to highway or road construction, or those that are funded exclusively by the federal government.
Payment Deadlines for Public Projects
On public works projects in Nebraska, only payments from the public agency to the prime contractor are regulated. The hiring agency must make payment to the prime contractor within 45 days of receiving either a request for payment, or the goods and services themselves, whichever is later. Goods or services are deemed to be “received” when they are actually accepted by the agency.
Payments from the prime to subcontractors and suppliers are not regulated by Nebraska’s Prompt Payment Act. Instead, these payments are regulated by the terms of the contract between the parties.
Penalties for Late Payment on Public Projects
Nebraska’s Prompt Payment Act sets the interest rate for late payments equal to “the average short-term borrowing rate for the federal government during July of the previous year rounded to the nearest whole percentage” plus 3%.
As with private projects, the prompt payment statutes allow for certain circumstances in which payments can be properly withheld. However, if payments are late or otherwise improperly withheld, interest penalties will be imposed.