How does Ohio’s Prompt Payment Act work?

On Behalf of | Dec 23, 2021 | Uncategorized |

When you work as a subcontractor in Ohio, you have a right to receive prompt payment. In fact, Ohio has a Prompt Payment Act in place that sets guidelines with regard to when a contractor must pay you for your part of the work performed.

According to the Ohio Laws and Administrative Rules, the Prompt Payment Act applies to both public and private projects. It gives you grounds to hold contractors accountable if they fail to pay you within a specific timeframe.

What the Prompt Payment Act does

Under the terms of the Prompt Payment Act, your contractor, after receiving his or her own payment from a property owner, must then remit your payment within 10 days of receiving the property owner’s payment. However, you also have to make sure that you submit your invoice for your services performed or materials rendered in time for your general contractor to include your invoice when he or she requests payment from the property owner.

What happens when contractors do not comply

When a general contractor fails to follow the terms of the Prompt Payment Act, he or she must pay interest on the balance due at a rate of 18%. If 30 days pass and you still do not receive payment, you may be able to file suit against that individual for contractual or statutory damages. Depending on how that goes, your contractor may also have to cover your legal expenses.

It is important to note that Ohio’s Prompt Payment Act applies to projects completed in the state even if contract language dictates otherwise.

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