Subcontractor Payment Rights: What Can You Do When Payment Is Late?
It doesn’t matter how good they are at their trade or how well they run their business — subcontractors have a tough time getting paid. Even if you finish a...
Prompt payment requirements establish a time period in which property owners or GCs must make payments to contractors and subcontractors. This is the page for articles about prompt payment. If you need help with prompt payment in your state, then you’re in the right place!
In construction, the average payment takes nearly three months; the longest of any industry. State and federal requirements attempt to ensure that parties to a construction project receive payment within a reasonable amount of time.
Federal and state prompt payment laws
The federal Prompt Payment Act applies to federal construction contracts. It requires that these contracts include a clause requiring the prime contractor to pay subcontractors for “satisfactory” work within seven days of being paid by the government.
States have their own prompt payment laws. These laws seek to reduce the time it takes for contractors, subcontractors, and suppliers to receive payment for the work and materials they provide. Laws and regulations try to establish a timeline for construction payments that is fair and reasonable for the people providing work and materials on a project.
In general, these requirements apply universally to public projects, i.e. state and federal construction jobs. Laws in some states apply these requirements to private projects as well.
Prompt payment requirements are not always cut-and-dry. The laws create a timeline for payment that often starts when a party receives a “proper” or “undisputed” invoice. As a result, the interpretation of the requirements can be quite subjective. In spite of this, with a little time and research, you can learn how to use prompt payment to get paid on any construction project. To ask your own questions about prompt payment and get legal advice from construction attorneys entirely for free, check out the Expert Center page for prompt payment.
It doesn’t matter how good they are at their trade or how well they run their business — subcontractors have a tough time getting paid. Even if you finish a...
The construction industry can be pretty reluctant to change. Old-school management prefers to keep things as they are, as they’ve always been, and as they hope they’ll always be. But,...
When you’re balancing accounts receivable with the many other responsibilities needed to keep business running smoothly, staying on top of notice and lien deadlines and sending out payment paperwork at...
Imagine a world where subcontractors received payments for their projects within five days of the due date. “A pipe dream,” you might say. “How would this ever be possible in...
Editor’s note: Poor construction cash flow can lead to the downfall of construction business during any economy, good or bad. As the risk of bankruptcy increases in the age of...
If your NY construction contract has a Pay-When-Paid stipulation, you might feel like your only option is to wait it out. That’s not a great feeling! However, it’s important that...
Construction is one of the only industries that rely heavily on “physical payment.” Maybe it’s time to do something different. In 2019, it took construction businesses an average of 83...
Pretty much everyone working in construction faces payment problems. In many cases, problematic communication is the main factor behind any payment issues. The link between field and office teams is...
The UK Prompt Payment Code was instated in 2008. Much like the Prompt Payment Acts here in the US, it sets standards for good payment practices in the construction industry....
If you’re worried about getting paid for a construction job, or your payment is LONG overdue, you’re probably already brainstorming ways to light a fire under the GC or owner....