Illinois

Retainage

Private works. Illinois's Contractor Prompt Payment Act, as amended in 2019, limits retainage on private construction contracts. No more than 10 percent may be withheld from any payment, and once the contractor has completed 50 percent of the work the retainage must be reduced so that no more than 5 percent is withheld for the remainder of the project.

Public works. Public construction in Illinois is governed by separate statutes depending on the public body, including the State Prompt Payment Act for state agencies and the Local Government Prompt Payment Act for local units. Retainage practices on public work are set by those statutes and the awarding body's rules; confirm the terms for your project.

Prompt payment

Private works. Under the Contractor Prompt Payment Act, a payment request is to be approved or disapproved within 25 days of receipt; if it is not disapproved in writing within that time it is deemed approved. The owner generally must pay within 15 days after approval, and a contractor or subcontractor generally must pay its subcontractors within 15 days of receiving payment for their work. Late payments accrue interest at 10 percent per year. The Act excludes some residential projects and allows withholding for defined reasons with written notice.

Public works. The State Prompt Payment Act and the Local Government Prompt Payment Act set approval and payment deadlines for public bodies and provide interest penalties for late payment. Deadlines differ between the two acts.

Official sources

• Illinois General Assembly (see Illinois Compiled Statutes 815 ILCS 603, Contractor Prompt Payment Act; 30 ILCS 540, State Prompt Payment Act; and 50 ILCS 505, Local Government Prompt Payment Act)