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 Massachusetts, prompt payment statutes are designed to ensure that contractors and subcontractors working on construction projects are paid in a timely manner. The Massachusetts Prompt Payment Act, codified in General Laws Chapter 149, Sections 29E, applies to private construction projects and mandates strict time frames for approving and disputing invoices, as well as for making payments. For public construction projects, Massachusetts General Laws Chapter 30, Section 39K, and Chapter 149, Section 29, provide similar protections. These laws require public entities to pay contractors within a specified period, and contractors must then pay their subcontractors within a certain timeframe after receiving payment. Failure to adhere to these timelines can result in interest and penalties. The dollar thresholds and specific timeframes can vary depending on the type of project and the contractual agreement. Additionally, the federal Prompt Payment Act applies to federal construction projects, ensuring that contractors and subcontractors are paid on time for work completed on projects funded by the federal government.