Prompt Pay for Construction: Are you owed 1% per month on your state/local public work?
Cash flow is the lifeblood of any small business—especially when working on public construction contracts. Washington State law provides important protections to ensure timely payments. Under RCW 39.76, public agencies must pay prime contractors within 30 days of receiving a proper invoice. Once paid, prime contractors have 8 days to pay their subcontractors. Understanding and leveraging these prompt pay requirements can help your small businesses stay financially stable.
Here are three tips to make sure you get paid promptly:
1. Submit Complete and Accurate Invoices
To start the clock on payment timelines, your invoice must be correct and compliant. Double-check that your billing matches the contract scope and that all supporting documentation is included. Also be sure your invoice gets the correct person at the government agency.
2. Track Payment Dates and Communicate Early
Keep written records of when you submit invoices and when payments are due. If payment doesn’t arrive on time, follow up with your prime contractor or the public agency. Professional, proactive communication can resolve delays without straining relationships—and it signals that you’re serious about enforcing your rights.
3. Know Your Rights Under the Law
RCW 39.76 entitles you to interest on late payments. If you’re not paid within the legal timeframe, you can invoice for the interest on the overdue amount (1% per month). While most contractors and agencies want to stay compliant, reminding them of the law can move your payment to the top of the list. Remember, Federal prompt pay laws and interest amounts are different and your subcontract may have “pay-when-paid” clauses impacting timelines.
Getting paid on time isn’t just good business—it’s the law. Know your rights, stay organized, and don’t hesitate to advocate for timely payments. If you get stuck or are unsure of your rights, your local APEX Accelerator advisor can assist!
