Paying subcontractors promptly (new law)

Subcontractors and suppliers working on residential jobs now have the same assurance as those working for commercial contractors that they’ll be paid in a timely manner.

On May 12, Gov. Tim Pawlenty signed a law, sponsored by Rep. Larry Howes (R-Walker) and Sen. Linda Scheid (DFL-Brooklyn Park), which strikes language excluding residential subcontractors and suppliers from an existing law requiring prompt payment. Prime contractors or subcontractors who hire other subcontractors or suppliers must pay those they hire within 10 days from the date payment is requested. The law also stipulates interest to be paid on late payments. It takes effect Aug. 1, 2009.

Residential properties are single-family homes or multi-family buildings with up to four dwelling units, or developments with up to 13 attached units.

HF1056*/SF638/CH66