State rules

• California

  Public-works retention is capped by statute, and both public and private work carry statutory deadlines for passing payments and retention down the chain.

• Florida

  Retainage on state and local public construction is capped at 5 percent, and separate prompt-payment acts cover state, local and private construction.

• Georgia

  A Prompt Pay Act sets payment deadlines and interest on construction contracts, but allows the parties to change them by contract.

• Illinois

  Private construction retainage is capped at 10 percent, reduced to 5 percent at the halfway point, and a Contractor Prompt Payment Act sets approval and payment deadlines.

• Massachusetts

  Public and larger private construction projects carry a 5 percent retainage cap and statutory deadlines for approving and paying pay applications.

• New Jersey

  A Prompt Payment Act sets a 30-day payment deadline for approved billings and a 10-day pass-through to subcontractors, with interest above the prime rate.

• New York

  Private construction contracts above a threshold carry statutory approval and payment deadlines and, since a 2023 amendment, a 5 percent retainage cap.

• North Carolina

  Public construction retainage is capped at 5 percent and stops at the halfway point for satisfactory work; a separate statute governs payments to subcontractors on all projects.

• Pennsylvania

  The Contractor and Subcontractor Payment Act sets payment deadlines, interest and penalties on private construction, with a 2018 amendment adding retainage-release rules.

• Virginia

  Public retainage is capped at 5 percent, and a 2023 private prompt-payment law sets 60-day deadlines and makes pay-if-paid clauses unenforceable.

States not listed are not covered yet. Rules on private work are often different from rules on public work, and several states have no statutory limit on retainage for private projects at all, leaving it to the contract. Our retainage guide explains what to negotiate when that is the case.