Understanding Prompt Payments Laws & Regulations in All 50 States (Part 1)

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Alabama (AL) Prompt Payment Laws

General Contractors

State: Payment is due within 30 days after receipt of a proper payment request.

Local: Payment is due within 35 days after approval of a payment request.

If there is a dispute of the payment request, the entity must notify the general contractor within 15 days of receipt.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 7 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 7 days to the Suppliers.

If there is a dispute of the payment request, the other party must be notified within 5 days of receipt.

Interest and Fees

For late and wrongfully withheld payments, interest will accrue at a rate of the “legal amount currently charged by the state.” For local projects, the interest rate is equal to the rate assessed for the underpayment of taxes set by the US Secretary of Treasury.

Additional Prompt Payment Information

Alabama’s prompt payment laws for public projects are split into two sections (state projects and local/municipal government projects)

Payment may be withheld for the following reasons:

• Unsatisfactory progress

• Lack of remedied action for defective construction

• Disputed work

• A claim filed by a third party or reasonable evidence that a claim will be filed

• Failure to make timely payments

• Property damage to owner, contractor, or subs

• Reasonable evidence that the contract cannot be completed for the unpaid balance of the contract or contract sum

Payment may only be withheld after a notice has been provided, and the amount withheld can only be 2 times the disputed amount.

Alaska (AK) Prompt Payment Laws

General Contractors

Payment is due within 30 days after receipt of payment request. If grant money is used for payment, payment is due within 21 days from delivery of invoice or public entity’s receipt of grant funds.

Subcontractors and Suppliers

After the General Contractor receives payments, payment is due within 8 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 8 days to the Suppliers.

Interest and Fees

For late and wrongfully withheld payments, the unpaid balance will begin to accrue interest at a rate of 10.5% per year.

Interest will accrue 21 days after the payment due date for general contractors. The interest rate for other parties will begin accruing the first day of late payment.

Additional Prompt Payment Information

Alaska’s prompt payment laws apply after the completion and acceptance of work and payment must have been requested.

In order for a payment to be considered as received, the check must be endorsed. Payments are considered made when they are mailed or personally delivered.

If the payment request or performance does not comply with the terms set forth in the contract, the entity or general contractor must notify the party requesting payment within 8 days of receipt of the request. The notice must be in writing stating the amount being withheld and the remedial actions required to receive payment. Once corrected, the party requesting payment must receive payment within 8 days.

Arizona (AZ) Prompt Payment Laws

General Contractors

Progress payments are due within 14 days after invoice approval. Final payment due within 60 days of accepting the completed work.

Subcontractors and Suppliers

After the General Contractor receives payments, payment is due within 7 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 7 days to the Suppliers.

Interest and Fees

Late or improperly withheld payments will accrue interest at a rate of 1% per month.

The arbitrator or court may award the interest penalty, attorney fees and costs to the prevailing party.

Additional Prompt Payment Information

Arizona’s prompt payment laws apply automatically.

For subcontractors, payment may be withheld for the following reasons:

• Unsatisfactory performance

• Failure to fix unsatisfactory performance

• Disputed work or materials

• Reasonable evidence that the subcontract cannot be completed for the unpaid balance of the contract

• Claims filed by third party or evidence that a claim will be filed

• Damage to other parties

• Failure to make timely payments for labor, equipment, and materials

Arkansas (AR) Prompt Payment Laws

General Contractors

Progress payments are due within 15 days of a proper payment request. Final payment is due within 90 days of project completion and acceptance.

Subcontractors and Suppliers

There is no specification in state statutes for subcontractors and suppliers, so payment is due according to the contract terms.

Interest and Fees

For late and wrongfully withheld payments, starting the day after payment is due, the unpaid balance will begin to accrue interest at a rate of 10% per year

Additional Prompt Payment Information

Arkansas prompt payment provisions apply to all state and local construction projects exceeding $35,000. These provisions do not apply to public works projects contracted by the State Highway Commission

Progress payments from the public entity to the prime contractor depend on the number of parties involved. Once a payment request is submitted, each party has 5 days to process the payment requests. This does not include the time required to transmit the payment request from one party to another.

If the payment request is disputed by either party, it is their responsibility to notify the contractor of the reasoning within the time specified for processing payment. Should any of the parties fail to properly process undisputed payment requests, within the time limits specified, the parties responsible will receive a penalty of 8% per year of the amount of the payment request.

California (CA) Prompt Payment Laws

General Contractors

Progress payments are due within 30 days after receiving a payment request. Final payment due within 60 days of project completion.

Subcontractors and Suppliers

After the General Contractor receives payments, progress payments are due within 7 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 7 days to the Suppliers.

Interest and Fees

Payment may be withheld if there is a dispute over the amount due.

The interest rate for late or improperly withheld payments to general contractors is 10% per year. For subcontractors and suppliers, the interest rate is 2% per month.

The arbitrator or court may award the interest penalty, attorney fees and costs to the prevailing party.

Additional Prompt Payment Information

California’s prompt payment law applies pursuant to the timing requirements stated in the statute.

From owner to general contractor, For state university projects, payments to the general contractor are due within 39 days after invoice.

For payments from a public utility, subcontractors can expect to receive payments within 21 days. For suppliers, payment is due within 7 days after the subcontractor has received payment, unless otherwise agreed upon.

Colorado (CO) Prompt Payment Laws

General Contractors

Progress payments are due by the end of the month or as soon as possible thereafter. Final payment is due within 60 days of project completion and acceptance.

Subcontractors and Suppliers

After the General Contractor receives payments, progress payments are due within 7 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 7 days to the Suppliers.

Interest and Fees

For overdue payment from the contractor or subcontractor, the interest rate is 15% per year or the rate stated in the contract, whichever is higher until payment is made.

Additional Prompt Payment Information

Colorado’s prompt payment laws apply to all public construction projects over $150,000.

For late payments from the public entity to the general contractor, the interest rate will follow the terms of the contract.

When the subcontractor submits a request for payment, the subcontractor must include a list of their subcontractors, suppliers, etc. The prompt payment requirements do not apply to the contractor until the list is submitted.

Connecticut (CT) Prompt Payment Laws

General Contractors

Payment is due within 45 days from receipt of payment request or goods and services, whichever is later.

For DOT projects, a contractor must be paid within 60 days of project completion and acceptance.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 30 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 30 days to the Suppliers.

Payments to subcontractors and suppliers become due upon proper performance according to the contract terms, and submission of a payment request or application.

Interest and Fees

State & Local:

Late or wrongfully withheld payments to the general contractor will accrue interest at a rate equal to the monthly effective yield for the Short Term Investment Fund.

All other late payments will accrue interest at a rate of 1% per month, provided that a notice of nonpayment has been sent to the non-paying party 30 days after the non-paying party received payment.

DOT:

Late or wrongfully withheld payments will accrue interest at a rate of 6% per year.

Additional Prompt Payment Information

Connecticut’s prompt payment provisions apply to all public works projects over $100,000 except highway/road construction or maintenance, or any contract paid exclusively by federal funds.

If there is an error in the payment request, the unpaid party must be notified within 10 days to correct the error. If the error is corrected within 5 business days, the original time period for payment still applies.

Payments may be withheld for defective performance and materials. Before withholding payment, a notice must be sent by certified mail or personal delivery before the date of timely payment.

Subcontractors and suppliers must submit a notice of late payment to the non paying party 30 days after receipt of payment that includes the amounts due in order for late payment to accrue interest.

Delaware (DE) Prompt Payment Laws

General Contractors

If a project is set to be completed in less than 90 days, progress payments are due according to the terms in the contract.

For longer projects, progress payments are due within 21 days from the progress work being certified and approved or after approval of the payment request. Approval must be made within 7 days of receipt of request. If federal agency approval is required on the project, progress payments will be due within 10 days of the federal agency approval. Final payment is due within 60 days of completion and acceptance of the work.

Subcontractors and Suppliers

After the General Contractor receives payments, payment is due within 21 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 21 days to the Suppliers.

Interest and Fees

For late or improperly withheld payments, The interest rate can not exceed the federal prime interest rate plus 2%. The unpaid party may be awarded damages for amounts that are wrongfully withheld.

Additional Prompt Payment Information

Delaware’s prompt payment law applies pursuant to the timing requirements stated in the statute when request for payment has been made.

Payment may be withheld for the following reasons:

• Unsatisfactory performance

• Defective work and failure to fix unsatisfactory performance

• Disputed work or materials

• Retainage of funds

• Non-compliance with material provisions of the contract

• Damage to the agency contractor or subcontractor

• Claims filed by third party or evidence that a claim will be filed

• Reasonable evidence that the project cannot be completed for the unpaid balance of the contract

• Failure to make timely payments for labor, equipment, and materials

Florida (FL) Prompt Payment Laws

General Contractors

Local:

Payment is due within 25 days after the approval of the payment request. If approval is not needed, payment is due within 20 days. Final payment is due within 75 days of final acceptance.

State:

Payment is due within 30 days from receipt of payment request by CFO. Within that time frame, there are 20 days for approval of invoices and 10 days after approval.

Subcontractors and Suppliers

After the General Contractor receives payment, progress payments are due within 10 days to the Subcontractor and Suppliers. All other payments down the line are due within 7 days.

Interest and Fees

Late or wrongfully withheld payments will accrue interest at 1% per month.

Additional Prompt Payment Information

Payments may only be withheld for the following reasons:

• Payment request or invoice error

• Good faith dispute over the work or amount owed

• Failure to perform according to contract terms

Payment may only be withheld over the amount in dispute.

Payment Request Details

Local: If there is an error in the payment request, the public entity must reject the request within 20 days of receipt and include a written explanation for the rejection. Once corrected and submitted, payment will become due within 10 business days from receipt. If the request requires approval by law, then payment is due after the first business day from the next regularly scheduled meeting of the local entity.

State: The payment request must be approved by the public entity within 5 working days unless the contract specifies otherwise. If the payment request is disputed by a contractor or subcontractor, then they must provide a written notice including the amount in dispute and the required actions to resolve the dispute.

Georgia (GA) Prompt Payment Laws

General Contractors

Payment is due within 15 days from payment request.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 10 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 10 days to the Suppliers.

Interest and Fees

Unless otherwise agreed upon, late and wrongfully withheld payments will accrue interest at the default rate of 1% per month. Attorney fees are awarded to the prevailing party.

Additional Prompt Payment Information

Georgia’s prompt payment act does not apply to counties with less than 10,000 people or towns with less than 2,500 people.

Once a contractor has satisfied the conditions of their contract, they are entitled to payment.

Payments may be withheld for the following reasons:

• Unsatisfactory progress

• Defective of disputed work

• Claims filed by third party or evidence that a claim will be filed

• Failure of the contractor or subcontractor to make timely payments for labor, equipment and materials

• Damage caused by the contractor or subcontractor

• Reasonable evidence that the project cannot be completed for the unpaid balance of the contract

Hawaii (HI) Prompt Payment Laws

General Contractors

Payment is due within 30 days of a payment request or project completion, whichever is later.

Subcontractors and Suppliers

After the General Contractor receives payments, progress payments are due within 10 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 10 days to the Suppliers.

Interest and Fees

After 30 days of a late payment to the general contractor, an interest rate of 2% per month plus the prime rate will apply. For late or wrongfully withheld payments to the subcontractor, the interest rate will be 1.5% per month.

Additional Prompt Payment Information

An invoice must be delivered in order for Hawaii’s prompt payment law to apply pursuant to the timing requirements stated in the statute.

Payment may be withheld if there is a dispute over performance or any circumstances beyond the control of the public entity.

Idaho (ID) Prompt Payment Laws

General Contractors

Unless otherwise agreed upon, payment is due within 60 days after request for payment.

Subcontractors and Suppliers

There is no specification in state statutes for subcontractors and suppliers, so payment is due according to the contract terms.

Interest and Fees

Interest begins to accrue 30 days after the work is completed by the contractor.

Unless otherwise agreed upon, the rate will be equal to the federal midterm rate plus 2% and compounded each month.

If the contractor prevails in court or arbitration, attorney fees will be awarded.

Additional Prompt Payment Information

In order for Idaho’s prompt payment statute to apply, the public entity must receive an invoice. If there is an error on the invoice, the public entity is required to notify the party within 10 days of receipt to correct the invoice.

Illinois (IL) Prompt Payment Laws

General Contractors

State: Payment is due within 60 days after the approval of the payment request.

Local: Payment is due within 30 days after the approval of the payment request.

The payment request must be approved within 30 days.

Subcontractors and Suppliers

After the General Contractor receives payment for a local project, payment is due within 10 days to the Subcontractor and Suppliers.

After the General Contractor receives payment for a state project, payment is due within 10 business days or 15 calendar days to the Subcontractor and Suppliers.

Interest and Fees

Late or wrongfully withheld payments to the general contractor will accrue interest at 1% per month. All other payments will accrue interest at 2% per month.

Indiana (IN) Prompt Payment Laws

General Contractors

State: Progress payments are due within 35 days after receipt of payment request. Final payments are due within 61 days from completion.

Local: Payments are due 45 days after receipt of payment request.

If the invoice is incorrect, the party requesting payment must be notified within 30 days. If a portion of the request is rejected, the approved portion of the payment request must be paid.

Subcontractors and Suppliers

After the General Contractor receives payments, payment is due within 10 days to the Subcontractor.After the Subcontractor receives payment, payment is due within 10 days to the Suppliers.

Interest and Fees

For late and wrongfully withheld payments,interest will begin accruing at a rate of 1% per month and compounded monthly until payment is made.

Additional Prompt Payment Information

Payments may be withheld for the following reasons:

• Unsatisfactory performance or quality of materials

• Failure to provide proper documentation in accordance with the contract terms.

Iowa (IA) Prompt Payment Laws

General Contractors

Progress payments are due within 14 days of receipt of payment request. Final payment is due within 40 days from completion and acceptance of work.

Subcontractors and Suppliers

After the General Contractor receives payments, payment is due within 7 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 7 days to the Suppliers. This only applies to first tier project participants, all other payments will follow the terms in the contract.

Interest and Fees

For late and wrongfully withheld payments, the interest rate is set by the Iowa State Treasury. Interest will accrue the day the payment becomes late. When the contractor receives interest payments, subcontractors are entitled to a portion of the interest payments that is equal to the payment of the subcontractor’s work. Attorney fees may be awarded to the unpaid party.

Additional Prompt Payment Information

For General contractors, progress payments due dates can be modified by the contract up to 30 days after invoice, and up to 50 days after acceptance for final payment.

For payments to the general contractor, approval by the project architect or engineer is required. For subcontractors, satisfactory performance of their work is required according to Iowa’s prompt pay statutes.

Kansas (KS) Prompt Payment Laws

General Contractors

Payment is due within 30 days from receipt of payment request, but can be extended to 45 days under extenuating circumstances.

Subcontractors and Suppliers

After the General Contractor receives payments, payment is due within 7 business days to the Subcontractor. After the Subcontractor receives payment, payment is due within 7 business days to the Suppliers.

Interest and Fees

For late and wrongfully withheld payments, the interest rate is set at 1.5% per month.

Additional Prompt Payment Information

In order for Kansas’ prompt payment statutes to apply, the paying party must receive the goods or services and an invoice. Under the Kansas Fairness in Public Construction Contract Act, a timely, proper, complete, and undisputed payment request must be provided.

Both Kansas Prompt Payment Act and Kansas Fairness in Public Construction Contract Act include an interest rate of 18% per year. Under the prompt pay act, the party must request to obtain interest within 4 months from the payment deadline in order to be awarded the same.

Kentucky (KY) Prompt Payment Laws

General Contractors

Progress payments are due within 30 business days after submitting a payment request.

For education projects, progress payments are due within 45 business days after receipt of a payment request. Final payment is due within 30 days of project completion.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 15 business days to the Subcontractor. After the Subcontractor receives payment, payment is due within 15 business days to the Suppliers.

Interest and Fees

For late and wrongfully withheld payments, interest will begin to accrue at a rate of 12% per year. If the non paying party is determined to have acted in bad faith, attorney fees may be awarded.

If the contractor has not received payment after 25 days from submission of the payment request, they should notify the entity by certified mail indicating that payment has not been received and the date the interest will begin accruing.

Additional Prompt Payment Information

Kentucky prompt payment laws do not apply to utility projects.

Louisiana (LA) Prompt Payment Laws

General Contractors

Progress payments are due according to the terms in the contract. Final payment is due within 45 days from receipt of clear lien certificate.

For highway projects, progress payments are due 30 days after invoice. Final payment is due 45 days after substantial completion of the project.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 14 business days to the Subcontractor. After the Subcontractor receives payment, payment is due within 14 business days to the Suppliers.

Interest and Fees

Late and wrongfully withheld payments will accrue interest at 0.5% per day, but cannot exceed 15% of the payment due. Attorney fees may be awarded to the prevailing party.

Additional Prompt Payment Information

Louisiana prompt payment statutes do not apply to federal construction projects in Louisiana. The US Federal Prompt Payment Act would apply instead.

Maine (ME) Prompt Payment Laws

General Contractors

Unless otherwise agreed upon, payment is due 20 days after delivery of invoice

Subcontractors and Suppliers

Unless otherwise agreed upon, payment is due 7 days from receipt of invoice or receipt of payment from GC.

Interest and Fees

The interest rate is either the rate stated in the contract or the statutory judgment rate, whichever is greater.

The court can award an additional 1% per month on all payments wrongfully withheld. If the hiring party violated Maine’s prompt payment requirements, the arbitrator or court will award the interest penalty in addition to other damages.

Additional Prompt Payment Information

Maine’s prompt payment statutes require retainage to be paid within 30 days of final acceptance of the work.

Although Maine’s prompt payment statutes protect contractors and suppliers on public projects automatically, recovering interest penalties for late payment requires a claimant to enter arbitration or litigation.

Maryland (MD) Prompt Payment Laws

General Contractors

Payment is due within 30 days from payment due date stated in the contract or from receipt of payment request, whichever is later.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 10 business days to the Subcontractor. After the Subcontractor receives payment, payment is due within 10 business days to the Suppliers.

Interest and Fees

If payment is late or wrongfully withheld for more than 45 days from receipt of payment request, interest will begin accruing on the first day that payment is due at a rate of 9% per year.

Additional Prompt Payment Information

Subcontractors may be entitled to a $100 per day penalty if proper notice is given to the procurement unit. The written notice should contain the contractor's name, project id, amount in dispute, itemized description of amount in dispute, and explanation for any dispute concerning payment by the contractor. The public unit will reach out to the contractor within two days of receipt. If the amount is undisputed, the procurement unit will instruct the contractor to pay. If payment still isn’t made, it can result in a $100 per day penalty.

Massachusetts (MA) Prompt Payment Laws

General Contractors

Progress payments are due within 15 days after receipt of a proper payment request. If contracted by a commonwealth entity, then payment is due within 30 days. Final payment is due within 65 days of substantial completion.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due immediately to the Subcontractor and Suppliers. Final payment is due within 65 days of substantial completion of subcontractor’s work.

Interest and Fees

If payment is late or wrongfully withheld, the interest rate is equal to the discount rate charged by the Federal Reserve plus 3% per year. For Commonwealth progress payments, interest begins to accrue on the 24th day from receipt of the payment application. All other progress payments, interest begins to accrue interest on the 15th day from receipt of the payment application.

Additional Prompt Payment Information

Massachusetts’ prompt payment law applies to Commonwealth projects where the original contract is valued at $5,000 or more. All other public works projects must have an original contract price of at least $2,000.

Michigan (MI) Prompt Payment Laws

General Contractors

Payment is due within 30 days after the architect/engineer has certified that the work in place is the portion covered by the payment request. If the public entity receives funds from a different federal or state agency, then payment is due within the default 30 days or 15 days of receipt of funds, whichever is later.

Subcontractors and Suppliers

There is no specification in state statutes for subcontractors and suppliers, so payment is due according to the contract terms.

Interest and Fees

For late or wrongfully withheld, the general contractor may charge interest at a reasonable rate on amounts past due in the next request for payment. Michigan’s interest rate law states that the rate cannot exceed 7% per year.

Additional Prompt Payment Information

Michigan's prompt payment does not apply to projects owned by Michigan DOT, schools, state housing development authority projects, and projects with a contract price less than $30,0000.

Minnesota (MN) Prompt Payment Laws

General Contractors

Payment is due within 30 days from receipt of a correct payment request.

If contracted by local governments, payments are regulated by the contract terms. If not specified in the contract, then payments depend on how often the board meets. Payment deadlines range from 35 -45 days after receipt of a payment request, depending on if the board meets monthly or not.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 10 business days to the Subcontractor. After the Subcontractor receives payment, payment is due within 10 business days to the Suppliers.

Interest and Fees

For late or wrongfully withheld payments, the unpaid balance will accrue interest at a rate of 1.5% per month. If the party is found to have acted in bad faith, the court will award reasonable attorney fees.

Additional Prompt Payment Information

Payments on public works projects are governed by different statutes depending on the public entity that contracted the project.

In order for Minnesota's prompt payment statutes to apply, an invoice for the completed furnishing of labor and/or material must be sent to the paying party. If an invoice is incorrect, the paying party must give notice within 10 days.

Payments may be withheld due to a dispute over the invoice, quality and performance of work, or compliance with the contract.

Mississippi (MS) Prompt Payment Laws

General Contractors

Progress payments are due according to the specified dates in the contract. However, progress payments must be made within 45 days to avoid interest penalties. Final payment is due within 45 days of substantial completion or use by the owner, whichever occurs first.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 15 business days to the Subcontractor. After the Subcontractor receives payment, payment is due within 15 business days to the Suppliers.

Interest and Fees

Late and wrongfully withheld payments to general contractors will accrue interest at 1% per month. Late and wrongfully withheld payments to subcontractors, will accrue interest at 0.5% per day, but cannot exceed 15% of the outstanding balance.

Additional Prompt Payment Information

If the project is bonded, the payment due date will not occur until the contractor’s surety has delivered written consent to the “proper contracting authority.”**

Missouri (MO) Prompt Payment Laws

General Contractors

Progress payments are due within 30 days of receipt of goods and services or payment request, whichever is later. Final payment is due within 30 days of completion.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 15 business days to the Subcontractor. After the Subcontractor receives payment, payment is due within 15 business days to the Suppliers.

Interest and Fees

Late and wrongfully withheld payments will accrue interest at 1.5% per month. Attorney fees may be awarded to the prevailing party.

Montana (MT) Prompt Payment Laws

General Contractors

Payments are due monthly.

Subcontractors and Suppliers

After the General Contractor receives payments, progress payments are due within 7 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 7 days to the Suppliers.

Interest and Fees

If payments are late or wrongfully withheld, the unpaid balance will accrue interest at a rate of 1.5% per month until payment is made.

Once final payment is accepted, no claim may be made for interest on the payment.

The arbitrator or court may award the interest penalty and attorney fees.

Additional Prompt Payment Information

Unless otherwise agreed upon, payment must be made by the public entity within 7 days of the approval of a payment request. Approval or denial must be made within 21 days of receipt.

In order for final payment to be due, the general contractor must provide the public entity a billing statement that follows the contract's terms.

Payment may be withheld for the following reasons:

• Unsatisfactory performance

• Failure of the contractor or subcontractor to fix unsatisfactory performance

• Disputed work or materials

• Non-compliance with material provisions of the contract

• Contractor’s failure to make timely payment for claims

• Damage to the owner

• Reasonable evidence that the project cannot be completed for the unpaid balance of the contract

Nebraska (NE) Prompt Payment Laws

General Contractors

Payment is due within 45 days after receipt of a payment request or receipt of services, whichever is later. Goods or services are considered “received” when they are actually accepted by the agency.

Subcontractors and Suppliers

Payments to subcontractors and suppliers are not regulated under Nebraska statue.

Interest and Fees

The interest rate for late payments is “the average short-term borrowing rate during July of the previous year rounded to the nearest whole percentage” plus 3%. The general contractor must request interest within 90 days from the payment due date to collect interest penalties. The Nebraska public agency is required to pay the interest charge upon request.

Additional Prompt Payment Information

Payments may be withheld due to a good faith dispute. The hiring party must provide notice of the dispute before the payment due date. The Prompt Payment Act goes back in effect on the date that the dispute is resolved.

Nevada (NV) Prompt Payment Laws

General Contractors

Progress payments are due within 30 days of receipt of invoice. Final payment is due within 30 days of either occupancy, use, or notice of completion, whichever is earlier.

Subcontractors and Suppliers

After the hiring party receives payment, payment is due within 10 days to the Subcontractors and Suppliers.

Interest and Fees

For late and wrongfully withheld payments to general contractors, the interest rate is equal to the rate quoted by at least 3 insured banks in Nevada, as the highest rate paid on CDs whose duration is approximately 90 days on the 1st day of the quarter.

Late and wrongfully withheld payments to subcontractors and suppliers will accrue interest at 2% plies the rate equal to the lowest daily prime rate at the 3 largest banks on the date the contract was executed.

Reasonable court costs and attorney’s fees may be awarded to the prevailing party in a civil action or arbitration

Additional Prompt Payment Information

Nevada’s prompt payment act does not apply to normal operation or maintenance contracts, contracts awarded in response to an emergency, or contracts awarded by the Nevada Department of Transportation.

Payments may be withheld by the public entity in a reasonable amount to cover any expenses it expects to incur, including unpaid wage claims, due to the failure to comply with the contract or any applicable building code, law, or regulation.

If payment is going to be withheld, the withholding party must send a notice within 20 days after receipt of invoice, stating the amount withheld and a detailed explanation.

New Hampshire (NH) Prompt Payment Laws

New Hampshire does not address prompt payment for public or private projects.

New Jersey (NJ) Prompt Payment Laws

General Contractors

Payment is due within 30 days of the specified due date in the contract.

On public works projects, payments become due to the general contractor according to the pay schedule in the contract between the contractor and public entity.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 10 business days to the Subcontractor. After the Subcontractor receives payment, payment is due within 10 business days to the Suppliers.

Interest and Fees

For late and wrongfully withheld payments, the interest rate is equal to the prime rate plus 1% per year and will begin to accrue once payment is past due. Attorney fees and reasonable costs may be awarded to the prevailing party.

Additional Prompt Payment Information

A payment request is considered to be approved and certified by the property owner within 20 days. Payment may only be withheld within that timeframe if a written statement is issued to the general contractor stating the amount and reasoning. Payment may be withheld if performance isn't in accordance with the terms of the contract.

General contractors, subcontractors, and sub-subcontractors may suspend performance due to untimely payment, lack of effort from the paying party to resolve the reason for withholding, and a missing written statement of withholding. Parties must provide a written notice at least 7 days prior to suspending work without liability for breach of contract.

New Mexico (NM) Prompt Payment Laws

General Contractors

Progress payments are due within 21 days after receipt of a proper payment request. Final payment is due within 10 days of certified completion.

Subcontractors and Suppliers

After the General Contractor receives payments, payment is due within 7 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 7 days to the Suppliers.

Interest and Fees

For late and wrongfully withheld payments, the interest rate is 1.5% per month. Interest will begin to accrue on the day the payment is late. The court may award costs and attorney fees to the prevailing party.

Additional Prompt Payment Information

New Mexico prompt pay act applies once an undisputed request for payment is submitted. The party submitting an improper payment request must be notified of the error within 7 days.

New York (NY) Prompt Payment Laws

General Contractors

State Contracts

Payment is due within 30 days after receipt of payment request. For small businesses, payment is due within 15 days. For highway construction projects, payment is due within 75 days.

Municipal Contracts (excluding New York City)

Payment is due within 30 days from receipt of a proper payment request. If approval by an elected official is required, then payment is due within 45 days.

New York City Contracts

Once the invoice is approved, the city must make payment within 30 days of the IRA date.

Public Authority Contracts

Payment is due within 30 days from receipt of a proper invoice. The public authority must notify the contractor within 15 days to dispute the submitted invoice.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 7 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 7 days to the Suppliers.

Interest and Fees

Late and wrongfully withheld payments will accrue interest at the statutory rate.

Additional Prompt Payment Information

Payments may be withheld for the following reasons:

State Contracts

• Audit determines reasonable cause to believe that payment is not properly due

• Audit or inspection is required prior to payment

• Missing the necessary government appropriation required for payment

• Insufficient cash balance of the fund or sub-fund to finance the payment

• Invoice examination by the federal government prior to payment

• Labor and/or material does not follow the contract terms

• Required payment date is modified due to defective goods and services or invoice

• Failure to properly submit the necessary documents required by contract, statute, or other law.

Municipal Contracts (excluding New York City)

• To satisfy claims, liens, or judgments against the party requesting payment

New York City Contracts

• Audit determines reasonable cause to believe that payment is not properly due, due to the fault of the vendor

• Missing the necessary government appropriation required for payment

• Invoice examination by the State or federal government prior to payment

• Work performance is not in accordance with the contract terms

• The ACCO determines the vendor failed to properly submit necessary documents for processing final payment.

Public Authority Contracts

• If there is a legally enforceable unpaid debt from the party requesting payment to the paying party.

North Carolina (NC) Prompt Payment Laws

General Contractors

Progress payments are due according to the contract terms. Final payment is due within 45 days of project acceptance or occupancy, whichever is earlier.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 7 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 7 days to the Suppliers.

Interest and Fees

Unless a lower rate is stated in the contract, late and wrongfully withheld payments to the will accrue interest at 1% per month. Attorney fees may be awarded to the unpaid party.

Additional Prompt Payment Information

North Carolina’s prompt payment provisions do not apply to the construction of roads, bridges, or their approaches.

North Carolina’s prompt payment laws applies under the following circumstances:

• If a state projects value is at least $125,000 or the total cost of labor is at least $50,000

• If political subdivision project value is at least $500,000 or the total cost of labor is at least $200,000

• If UNC project value is at least $200,000 or the total cost of labor is at least $100,000

Payments may be withheld by the public entity for the following reasons:

• Unsatisfactory job progress

• Defective work and failure to fix defective work

• Disputed work

• Claims filed by third party or reasonable evidence that one will be filed

Payments may be withheld by the contractor for the reasons listed above in addition to:

• Failure to make timely payments

• Damage to the contractor or other subcontractors

• Reasonable evidence that the subcontractor’s work cannot be completed for the unpaid balance of the contract sum

• Reasonable amount of retainage will exceed the initial percentage retained by the public entity

North Dakota (ND) Prompt Payment Laws

General Contractors

Payment is due within 45 from the payment request.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 45 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 45 days to the Suppliers.

Interest and Fees

Late and wrongfully withheld payments will accrue interest at a rate of 1.75% per month. Interest will be compounded every 45 days until payment is made.

Ohio (OH) Prompt Payment Laws

General Contractors

Payments are due within 30 days after receipt of a payment request, unless otherwise agreed upon.

On public works projects, payments become due to the general contractor according to the pay schedule in the contract between the contractor and public entity.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 10 business days to the Subcontractor. After the Subcontractor receives payment, payment is due within 10 business days to the Suppliers.

If payment isn’t made within 30 days after the original due date, they may file a civil action to recover the amount and any interest due.

Subcontractors and suppliers must submit a timely payment request for the general contractor to include the invoice in their pay application to the public entity.

Interest and Fees

Late and wrongfully withheld payments to the general contractor will accrue interest at the federal short-term rate. For all other payments, the interest rate is 18% per year. Attorney fees may be awarded to the unpaid party.

Additional Prompt Payment Information

Ohio’s prompt payment laws do not apply to Ohio DOT projects. These projects have their own provisions for payments to general contractors.

General contractors or subcontractors making payments may withhold direct and tangible amounts necessary to resolving disputed liens or claims related to work performance or materials by the subcontractor.

Oklahoma (OK) Prompt Payment Laws

General Contractors

Progress payments are due within 30 days after receipt of payment request.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 10 business days to the Subcontractor. After the Subcontractor receives payment, payment is due within 10 business days to the Suppliers. All other payments must be made within 7 days of receipt of payment from the higher-tiered party.

Interest and Fees

For late and wrongfully withheld payments to the general contractor, the interest rate is set by the Oklahoma State Treasurer. The interest rate for late and wrongfully withheld payments to the subcontractors and suppliers is set at 1.5% per month

Additional Prompt Payment Information

Oklahoma's prompt payment laws do not apply to public construction contracts regarding highways, railroads, turnpikes, or any project under $25,000.

In order for the provisions of the Oklahoma prompt pay statutes to apply, the party requesting payment must submit a correct invoice and be entitled to payment according to the contract terms.

Oklahoma allows payment to be reduced by a reasonable amount necessary to correct work. Before reducing payment, a written notice including the reasoning must be sent to the unpaid party.

Oregon (OR) Prompt Payment Laws

General Contractors

Progress payments are due within 30 days after receipt of payment request. Final payment is due within 30 days of final acceptance.

If the payment request is disputed or defective, the contractor must be notified within 15 days of receipt. If the invoice is corrected and submitted within 7 days from receiving notice, payment must be made within the original 30-day timeframe.

Subcontractors and Suppliers

After the General Contractor receives payments, payment is due within 10 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 10 days to the Suppliers.

Interest and Fees

For payment to the General Contractor: Late or wrongfully withheld progress payments will accrue interest at the statutory rate. However, the interest rate cannot exceed a yearly rate equal to 30%. For final payments, the interest rate is 1.5% per month.

For payments to the Subcontractor and Suppliers: Late or wrongfully withheld payments will accrue interest at the statutory rate. For final payments, the interest rate is 1.5% per month.

Additional Prompt Payment Information

Oregon’s prompt payment law does not apply to public contracts for emergency work, minor alterations, or ordinary repair/ maintenance of public property.

Payment may be withheld for the following reasons:

• Unsatisfactory work

• Disputed work, materials, or product exceed the withheld amount

• Failure to comply with material provisions of the construction contract

• A claim filed by a third party or reasonable evidence that a claim will be filed

• Failure to make timely payments to subcontractors and material suppliers

• Damage to an original contractor, subcontractor, or material supplier

• Reasonable evidence that the subcontract cannot be completed for the unpaid balance of the subcontract

Pennsylvania (PA) Prompt Payment Laws

General Contractors

Progress payments are due within 45 days after receipt of the payment application. Final payment is due within 45 days of final payment inspection. This inspection must occur within 30 days of the payment application.

Subcontractors and Suppliers

After the General Contractor receives payment, payment is due within 14 days to the Subcontractor. After the Subcontractor receives payment, payment is due within 14 days to the Suppliers.

Interest and Fees

For late and wrongfully withheld payments, interest will accrue at the statutory rate plus an additional penalty of 1% per month.

For late final payments, interest will accrue at 6% or 10% per year depending on retainage being withheld or not. The bad faith additional 1% interest rate and attorney fees may apply.

Additional Prompt Payment Information

Pennsylvania's prompt payment provisions apply to all state and local construction contracts with a contract value of at least $50,000. These provisions do not apply to contracts with the Department of Transportation.

Rhode Island (RI) Prompt Payment Laws

General Contractors

Payment is due within 30 days after receipt of payment request. The request is considered received when the goods or services are delivered or the request has been actually received, whichever is later.

Subcontractors and Suppliers

After the General Contractor receives payments, payment is due within 10 days to the Subcontractor. For Suppliers, payment is due within 90 days of furnishing materials.

Interest and Fees

For late and wrongfully withheld payments, the interest rate is set at the prime rate, which is compounded monthly until payment is made. Interest will begin to accrue the day after payments become due.

Additional Prompt Payment Information

Payments may be withheld for the following reasons:

• The state controller determines reasonable cause to believe that payment is not properly due

• If an inspection period or audit to determine the resources used in fulfilling the contract must occur before payment

• The necessary state government appropriation required to authorize payment has not been enacted;

• There is an insufficient balance of the fund from which payment is to be made

• A proper invoice must be examined by the federal government prior to payment

• Noncompliance with the terms or conditions of the contract

• The required payment date is modified pursuant to relevant law

Looking for Texas, Utah, Vermont, Virginia, Washington DC, Washington, West Virginia, Wisconsin, or Wyoming? Check out Part 2.

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