How Long Does a Contractor Have to Pay a Subcontractor?

How long should a contractor wait to get paid? And what to do if a contractor doesn’t pay a subcontractor? We’ve got all the answers for you.

Updated: October 2025

Quick Summary: How Long Does a Contractor Have to Pay a Subcontractor?

Payment timelines vary significantly by state and contract, with 30 days being a common standard in many places.
In Washington, public project contractors must pay subcontractors within 8 working days.
In Oregon, contractors must pay subcontractors within 10 days of receiving payment on public projects.
In California, contractors must pay subcontractors within seven days of receiving payment, though a written agreement can establish a different timeline.

Payment Deadlines for Subcontractors

Payment timing depends on the contract, project funding source (federal, state, or private), and applicable state prompt payment statutes. Subcontractors must carefully read and understand the payment terms of their contracts.

Construction Contracts Basics

Every construction contract should include the following elements to clarify when payment is due and what recourse exists if payment is withheld:

Project scope: Detailed description of work, materials, and services.
Duration: Start date, completion date, and milestone timelines.
Cost: Total contract value and payment amounts.
Payment terms: When payment is due and the frequency.
Dispute resolution: Process for handling payment disputes.
Governing law: The state law that applies to the contract.

Two widely used contract formats are AIA (American Institute of Architects) and ConsensusDocs:

AIA contracts: Require progress and final payments within seven working days of contractor receipt.
ConsensusDocs contracts: Require payment seven days after contractor receipt.

Prompt Payment Laws

Prompt payment laws set maximum payment windows and interest penalties for late payments; they vary by project funding type and location.

Federal Projects

Owners pay contractors within 14 days of invoice for progress payments.
Owners pay contractors within 30 days of invoice for final payments.
Contractors pay subcontractors within seven days of receiving payment.

State-Funded Projects

While a 7–14 day payment window is standard in many places, it is not a universal rule.
Specific deadlines vary by state; check local prompt payment statutes.

How long does a contractor have to pay a subcontractor in Washington?

Washington’s Prompt Pay Act (RCW 39.76) governs public projects and sets clear payment timelines and penalties.

Payment Deadlines:

Public agencies pay contractors within 30 days of invoice receipt.
Contractors pay subcontractors within 8 working days after receiving payment.

Withholding and Remediation:

Payment may be withheld if work is substandard or the payment request fails to meet contract terms.
The withholding party must notify the contractor within eight days of receiving the payment request.
Once remedial work is completed, payment must be made within 30 days.
The contractor must notify the subcontractor of the withholding reason before the anticipated payment date.

Penalties and Enforcement:

Late payments accrue interest at 1% per month or $1, whichever is greater.
Prevailing parties in enforcement litigation can recover attorney fees.

How long does a contractor have to pay a subcontractor in Oregon?

Oregon prompt payment rules:

Private Projects

Owners pay contractors within 14 days of invoice for progress payments and 7 days for final payments.
If a contract includes a “Notice of Extended Provision,” subcontractors are paid within seven days of contractor receipt.
Interest for late payments is 1.5% per month or the contract rate, whichever is higher.

Withholding Allowed For:

Unsatisfactory progress
Faulty work or materials
Disagreeable work
Injury to the owner

Public Projects

Owners pay contractors within 30 days for progress and final payments.
Contractors pay subcontractors within 10 days of receiving payment.
Rules apply to all public improvement contracts except for minor modifications, emergency work, and routine maintenance.

How long does a contractor have to pay a subcontractor in California?

In California, contractors must pay their subcontractors within 7 days of receiving payment from the project owner, unless the contract specifies a different timeline. If a contractor violates this without a valid reason, they are subject to a penalty of 2% per month on the unpaid amount.

Pay When Paid Vs. Pay if Paid Clauses

The only legal scenario in which a contractor may withhold payments to subcontractors is when there is a “pay-if-paid” clause. This clause states that you aren’t bound to pay your subcontractors if you haven’t been paid yourself. A “pay-when-paid” clause provides that contractors will pay subcontractors only after receiving payment from the owner, usually with a 7-day grace period.

What to Do if a Contractor Hasn’t Paid a Subcontractor on Time

Options for unpaid subcontractors:

Send a demand letter: Notify the contractor that payment is overdue and specify the next steps if payment is not received.
File a preliminary notice or mechanic’s lien: Notify the owner and contractor of unpaid amounts and your intent to file or enforce a lien.
File a lawsuit: Litigation is costly and time-consuming, but may be necessary to enforce payment rights.

State lien laws differ significantly; consult local experts or lien service providers before filing to ensure compliance with deadlines and notice requirements.

FAQ

What are the payment terms for subcontractors?

Payment terms are typically negotiated in the contract.

Common terms include Progress Payments (after milestones)
Net 30/60/90 (payment due in a set number of days)
Pay-When-Paid (after the owner pays the contractor).

Can you charge a contractor for taking too long?

Yes. Most states have Prompt Payment Acts that require late payments to include interest penalties, which can range from 1% to 2% per month.

Who does the Prompt Payment Act apply to?

Prompt Payment Acts apply to the entire payment chain, including property owners, general contractors, subcontractors, and material suppliers on federal, state, and often private projects.

Prompt Payment Act by State