Prompt payment statutes are laws that require the payment of contractors and subcontractors within a certain period of time, and prescribe interest and penalties for late payments. In some states these laws only apply to public works construction projects that are funded by the government—and sometimes only to public works projects over a certain dollar amount. There is also a federal Prompt Payment Act for federal construction projects.

In Connecticut, prompt payment statutes are designed to ensure that contractors and subcontractors are paid in a timely manner for their work on construction projects. These laws apply to both public and private construction projects. Under Connecticut General Statutes Section 49-41a, for public projects, the state or its agent must pay the prime contractor within 30 days of receiving a request for payment. The prime contractor, in turn, must pay its subcontractors within 30 days of receiving payment from the state. For private projects, according to Section 42-158i, the owner must pay the contractor within 30 days of receiving a bill, and the contractor must pay the subcontractor within 30 days of receiving payment from the owner. If payments are not made within these time frames, interest penalties may apply. The interest rate for late payments is specified in the statutes and is subject to change. These statutes ensure that cash flow issues do not unduly burden contractors and subcontractors who have fulfilled their contractual obligations.