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Construction law

prompt payment statutes

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 Illinois, the Prompt Payment Act regulates the timely payment for contractors and subcontractors involved in construction projects. This act requires a party to pay its contractors within a specified time frame after receiving a request for payment. For public construction projects, the state mandates that a contractor must be paid within 15 days of the submission of an approved request. Subcontractors must then be paid within 15 days after the contractor receives payment. If payment is not made within this period, interest penalties may be imposed. The interest penalty is set at 10% per annum for any payment delayed beyond 15 days. It's important to note that these regulations apply to public works projects funded by the state government. For federal construction projects, the Federal Prompt Payment Act applies, which also sets forth timelines and penalties for late payments to contractors and subcontractors.

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Construction law

prompt payment statutes

Individual & Family Legal Plan

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Illinois State Code

Illinois State Code

Construction law

prompt payment statutes

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