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 Delaware, prompt payment statutes are designed to ensure that contractors and subcontractors working on construction projects are paid in a timely manner. Delaware's prompt payment laws apply to both private and public construction projects. Under Delaware Code Title 6, Chapter 35, specifically sections 3501 to 3509, contractors and subcontractors must be paid within 30 days after providing an invoice for private projects, and within 20 days for public projects. If payment is not made within these time frames, interest may accrue on the unpaid amount at a rate specified by the statute. For public works projects, the law applies regardless of the project's dollar amount. Additionally, the federal Prompt Payment Act applies to federal construction projects, requiring federal agencies to pay contractors within a certain period of time and to pay interest on late payments.