Mississippi Prompt Payment Overview

Mississippi’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 Mississippi prompt payment laws.

Mississippi Prompt Payment for Private Projects FAQs

Prompt Payment Frequently Asked Questions

Do I Have To Send A Letter or File Anything To Qualify For Prompt Payment Penalties or Remedies in Mississippi?

The Mississippi prompt payment statutes apply with no specific additional requirements other than the performance of the work and the payment becoming due. Note, however, that if the project is bonded, the date on which payment becomes due will not occur until the contractor’s surety has delivered written consent to the “proper contracting authority.”

Can I Include Prompt Payment Fees In My Mississippi Mechanics Liens Claim or Bond Claim?

No. Mississippi 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?

Interest at a rate of 1% per month accrues to the benefit of the GC beginning on the 31st day after payment becomes due. For subcontractors, a penalty of 0.5% per day (not to exceed 15% of the total amount due) begins to accrue on the 15th day after payment becomes due.

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

Mississippi statutes do not specify the reasons for which payments may be withheld from the GC, but payments may be withheld from subs (by GCs) for any “reasonable cause.”

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.

Mississippi Prompt Payment for Public Projects FAQs

Prompt Payment Frequently Asked Questions

Do I Have To Send A Letter or File Anything To Qualify For Prompt Payment Penalties or Remedies in Mississippi?

The Mississippi prompt payment statutes apply with no specific additional requirements other than the performance of the work and the payment becoming due. Note, however, that if the project is bonded, the date on which payment becomes due will not occur until the contractor’s surety has delivered written consent to the “proper contracting authority.”

Can I Include Prompt Payment Fees In My Mississippi Mechanics Liens Claim or Bond Claim?

No. Mississippi 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?

Interest at a rate of 1% per month accrues to the benefit of the GC when payment is late pursuant to the statute (more than 45 days after the payment became due and payable). For subcontractors, similarly to Louisiana’s rules, a penalty of 0.5% per day not to exceed 15% of the total amount due begins to accrue on the 15th day after payment becomes due.

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

Mississippi statutes do not specify the reasons for which payments may be withheld from the GC, but payments may be withheld from subs (by GCs) for any “reasonable cause.”

Mississippi Prompt Payment Statutes

Getting informed about prompt payment laws is important. An examination of Mississippi’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. Mississippi’s specific laws can be found in: : Miss. Code. §§ 87-7-3, 87-7-5, and 31-5-25, 31-5-27, and are reproduced below.

Prompt Payment Statute on Private Projects

87-7-3: Payment of Contractors; Penalty for Late Payment

All sums due contractors under all construction contracts, except public construction contracts, shall be paid as follows:

(a) Partial, progress or interim payments: all partial, progress or interim payments or monies owed contractors shall be paid when due and payable under the terms of the contract. If they are not paid within thirty (30) calendar days from the day they were due and payable, then they shall bear interest from the due date at the rate of one percent (1%) per month until fully paid.

(b) Final payments: The final payment of all monies owed contractors shall be due and payable:

(i) At the completion of the project or after the work has been substantially completed in accordance with the terms and provisions of the contract;

(ii) When the owner beneficially uses or occupies the project except in the case where the project involves renovation or alteration to an existing facility in which the owner maintains beneficial use or occupancy during the course of the project; or

(iii) When the project is certified as having been completed by the architect or engineer authorized to make such certification, whichever event shall first occur.

If the contractor is not paid in full within thirty (30) calendar days from the first occurrence of one (1) of the above-mentioned events, then the final payment shall bear interest from the date of such first occurrence at the rate of one percent (1%) per month until fully paid.

In no event shall the final payment due the contractor be made until the consent of the contractor’s surety has been obtained in writing and delivered to the proper contracting authority.

87-7-5: Proportional Payment of Subcontractors; Penalty for Late Payment

When a contractor receives any payment from the owner under a construction contract, other than a public construction contract, the contractor shall, upon receipt of that payment, pay each subcontractor and material supplier in proportion to the percentage of work completed by each such subcontractor and material supplier. If for any reason the contractor receives less than the full payment due from the owner, the contractor shall be obligated to disburse on a pro rata basis those funds received, with the contractor, subcontractors and material suppliers each receiving a prorated portion based on the amount due on the payment. If the contractor without reasonable cause fails to make any payment to his subcontractors and material suppliers within fifteen (15) days after the receipt of payment from the owner under the construction contract, the contractor shall pay to his subcontractors and material suppliers, in addition to the payment due them, a penalty in the amount of one-half of one percent ( 1/2 of 1%) per day of the delinquency, calculated from the expiration of the fifteen-day period until fully paid. The total penalty shall not exceed fifteen percent (15%) of the outstanding balance due. The provisions of this section shall not be applicable to contracts for the construction of single-family dwellings.

Prompt Payment Statute on Public Projects

31-5-25: Time for Full and Final Payment to Contractors; Exemptions; Monthly Submission by Contractors of Proof of Payments to Subcontractors

(1) All sums due contractors under all public construction contracts shall be paid as follows:

(a) Partial, progress or interim payments: All partial, progress or interim payments or monies owed contractors shall be paid when due and payable under the terms of the contract. If they are not paid within forty-five (45) calendar days from the day they were due and payable, then they shall bear interest from the due date until paid at the rate of one percent (1%) per month until fully paid.

(b) Final payments: The final payment of all monies owed contractors shall be due and payable:

(i) At the completion of the project or after the work has been substantially completed in accordance with the terms and provisions of the contract;

(ii) When the owner beneficially uses or occupies the project except in the case where the project involves renovation or alteration to an existing facility in which the owner maintains beneficial use or occupancy during the course of the project;

(iii) When the project is certified as having been completed by the architect or engineer authorized to make such certification; or

(iv) When the project is certified as having been completed by the contracting authority representing the State of Mississippi or any of its political subdivisions, whichever event shall first occur.

If the contractor is not paid in full within forty-five (45) calendar days from the first occurrence of one (1) of the above-mentioned events, then said final payment shall bear interest from the date of said first occurrence at the rate of one percent (1%) per month until fully paid.

In no event shall said final payment due the contractor be made until the consent of the contractor’s surety has been obtained in writing and delivered to the proper contracting authority.

(c) [Repealed]

(2) Contractors shall submit monthly certification to the project engineer or architect indicating payments to subcontractors on prior payment request.

31-5-27: Payment of Interest on Delinquent Accounts

When a contractor receives any payment under a public construction contract, the contractor shall, upon receipt of that payment, pay each subcontractor and material supplier in proportion to the percentage of work completed by each subcontractor and material supplier. If for any reason the contractor receives less than the full payment due under the public construction contract, the contractor shall be obligated to disburse on a pro rata basis those funds received, with the contractor, subcontractors and material suppliers each receiving a prorated portion based on the amount due on the payment. If the contractor without reasonable cause fails to make any payment to his subcontractors and material suppliers within fifteen (15) days after the receipt of payment under the public construction contract, the contractor shall pay to his subcontractors and material suppliers, in addition to the payment due them, a penalty in the amount of one-half of one percent ( 1/2 of 1%) per day of the delinquency, calculated from the expiration of the 15-day period until fully paid. The total penalty shall not exceed fifteen percent (15%) of the outstanding balance due.