Understanding Prompt Payments Laws & Regulations in All 50 States (Part 2)

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Texas (TX) Prompt Payment Laws

General Contractors

Payment is due within 31 days after receipt of services or invoice, whichever is later.

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, the interest rate is set at the prime rate plus 1% per year. Interest will begin to accrue the day after payments become due. The unpaid party may be awarded the interest due and attorney fees.

Additional Prompt Payment Information

For Texas prompt payment law to apply, the party requesting payment must submit a payment request and be entitled to payment pursuant to the terms of the contract.

The contractor must be notified within 21 days of receipt of the payment request, if disputed by the public entity.

Withholding retainage is allowed, yet Texas’ prompt payment laws do not specify the maximum amount.

Payments may be withheld for the following reasons:

• Bona fide dispute over the amount due

• The paying party is prohibited from making a timely payment of federal funds according to a federal grant or regulation

• The invoice is not properly mailed to whom it is addressed in accordance with instructions on the purchase order.

If payment of the undisputed amount is improperly withheld, the contractor may suspend performance until they are paid, including any demobilization and remobilization costs.

Utah (UT) Prompt Payment Laws

General Contractors

Progress payments are due within 60 days of payment request. Final payment is due within 45 of payment request or certificate of completion, whichever is later.

Subcontractors and Suppliers

After the General Contractor receives payments, payments are due within 30 days to the Subcontractor from receipt of invoice or payment, whichever is later. After the Subcontractor receives payment, payments are due within 30 days to the Suppliers. Final payment is due within 10 days from receipt of payment.

Interest and Fees

Late or improperly withheld payments to the general contractor will accrue interest at a rate equivalent to the IRS refund rate plus 2% per year. For late or wrongfully withheld payments to the subcontractors and suppliers, the interest rate is 15.5% per year.

In order for attorney fees to be awarded, the claimant must be the prevailing party.

Additional Prompt Payment Information

Utah’s Prompt Payment Act does not apply to public construction projects that involve federal funds, or a mix of state and federal funds.

In order for Utah prompt pay statutes to apply, the party requesting payment must submit an invoice and be entitled to payment according to the contract terms.

Utah allows payments to be withheld for the following reasons:

• Breach of contract

• Work that is not properly completed

Before withholding payment for work that is not properly completed according to the contract terms, a written notice including the reasoning must be delivered to the party requesting payment.

Vermont (VT) Prompt Payment Laws

General Contractors

Payment is due within 20 days from delivery of payment request or by the end of the billing period, whichever is later.

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 or wrongfully withheld payments, will begin to accrue interest at a rate of 12% per year.

Attorney fees will be awarded to the prevailing party and an additional 1% interest per month may be imposed.

Additional Prompt Payment Information

Vermont prompt pay statutes apply once the party requesting payment has submitted an invoice and is entitled to payment according to the contract terms.

Virginia (VA) Prompt Payment Laws

General Contractors

State projects: Payment must be made within 30 days after receipt of a proper invoice or goods/services, whichever is later.

Local projects: Payment is due within 45 days after receipt of a proper invoice or goods/services, whichever is later.

If the invoice is incorrect, notice must be given to the general contractor within 15 days for state projects, and 20 days for local projects.

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

State: Late or wrongfully withheld payments to the general contractor, will begin to accrue on the 8th day past due at the rate specified in the contract or current rate published in the Wall Street Journal.

Local: Late or wrongfully withheld payments to the general contractor, will begin to accrue on once payment has become late at the rate specified in the contract, but cannot exceed 1% per month.

Payments to contractors, subcontractors, and suppliers are all subject to an interest rate of 1% per month, starting on the 8th day after the paying party receives project funds.

Additional Prompt Payment Information

Portions of the labor and/or materials must be “completely furnished” in order to be entitled to payment.

If payments are mailed, the date of postmark is considered the date of payment.

Washington DC Prompt Payment Laws

General Contractors

Payment is due within 30 days from receipt of services or invoice, whichever is later.

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

For late or wrongfully withheld payments to the general contractor, interest will accrue at rate of 1.5% per month. Late or wrongfully withheld payments to the subcontractors, accrue interest at the statutory rate.

Additional Prompt Payment Information

The claim for interest penalties must be filed within 90 days after the principal is paid. This timeframe may be extended to 180 days if the claimant notifies the contracting officer in writing of the contractor’s intent to file a claim within the original 90 days.

Washington (WA) Prompt Payment Laws

General Contractors

Payment is due within 30 days from a received invoice or from the completion of the project, whichever occurs later.

Subcontractors and Suppliers

There is no specification for subcontractors and suppliers.

Interest and Fees

Late or improperly withheld payments will accrue interest at 1% or at least $1 per month if late payments are from the public entity, whichever is greater. For other parties, the interest rate is set by the State Treasurer.

The court will award the interest penalty in addition to reasonable attorney fees and court costs.

Additional Prompt Payment Information

The party requesting payment must submit a proper invoice and must be entitled to payment according to the contract terms for Washinghton’s prompt payment laws to apply.

The public entity and contractor may withhold payment due to unsatisfactory performance or incorrect payment request. If a payment request is incorrect, the public entity has 8 days to notify the party. If not a public entity, the party must be notified as soon as possible. Once unsatisfactory performance has been fixed, the public entity has to make payment within 30 days. Contractors are required to make payment within 8 days.

If the project is funded by grant or federal money, then the public entity must make payment within 30 days after receiving a proper payment request or from when the public entity receives the grant or federal money, whichever is later. Once payment has been received from the general contractor, payments must be made to any subcontractors or suppliers within 10 days.

Washington allows payment to be withheld if there is a good faith dispute over the amount owed, unsatisfactory performance, and incorrect payment request.

West Virginia (WV) Prompt Payment Laws

General Contractors

Once a request for payment has been received, payment is due within 60 days.

Subcontractors and Suppliers

There is no specification for subcontractors and suppliers.

Interest and Fees

Late or improperly withheld payments will accrue interest at the statutory rate and compounded monthly.

Additional Prompt Payment Information

For West Virginia’s prompt payment laws to apply, the general contractor must submit a uncontested invoice

Unless otherwise stated in the contract, unforeseen budget constraints is the only reason that payment may be withheld and not accrue interest.

Wisconsin (WI) Prompt Payment Laws

General Contractors

Unless otherwise agreed upon, payment is due within 30 days of the public entity receiving an invoice or accepting the completed work.

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 or improperly withheld payments will accrue interest at the statutory rate and compounded monthly.

Accrual of interest will not occur for the following reasons: payments from federal money, late payment fee is applicable under another law, contract provides terms for late payments, and late payment falls under a good faith dispute.

Additional Prompt Payment Information

The contractor must be notified within 10 days after receiving an incorrect invoice.

Wisconsin allows payment to be withheld from the general contractor if there is a good faith dispute over the material or labor not meeting the standard stated in the contract.

The party requesting payment must submit a request for payment and must be entitled to payment according to the contact terms for Wisconsin prompt payment laws to apply.

If the hiring party violated Wisconsin’s prompt payment requirements, the arbitrator or court will award the interest penalty in addition to reasonable attorney fees and court costs.

Wyoming (WY) Prompt Payment Laws

General Contractors

After request for payment, payment is due within 45 days.

Subcontractors and Suppliers

There is no specification in state statutes for subcontractors and suppliers.

Interest and Fees

The interest rate for late or wrongfully withheld payments is 1.5% per month and will accrue interest until payment is made.

Additional Prompt Payment Information

The party requesting payment must submit a request for payment with the correct amount due and must be entitled to payment according to the contact terms for Wisconsin prompt payment laws to apply.

Wyoming allows payment to be withheld from the general contractor if there is a good faith dispute over the payment.

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