New York

Retainage

Private works. New York's General Business Law, Article 35-E, governs private construction contracts above a dollar threshold set in the statute and excluding certain residential work. A 2023 amendment capped retainage under those contracts at 5 percent of each progress payment, and the cap flows down to subcontractors. The amendment also allows a contractor to submit its final invoice upon reaching substantial completion, so that retainage can be released before all closeout steps are finished.

Public works. New York's public contracting statutes, including the State Finance Law and the General Municipal Law, limit retainage on public construction contracts and require release within set periods after completion and acceptance. The provisions differ by the kind of public owner; confirm the section that applies.

Prompt payment

Private works. Under Article 35-E, an owner must approve or disapprove an invoice within 12 business days of receipt, with written reasons for any disapproval, and must pay approved amounts within 30 days after approval. A contractor must pay its subcontractors within 7 days of receiving payment for their work, and the same requirement flows down. Late payments accrue interest at 1 percent per month. The Act applies to contracts above its threshold and has exclusions for certain residential and public work.

Public works. State and local public owners are subject to prompt-payment provisions in the State Finance Law and General Municipal Law, with interest for late payment and separate deadlines for paying subcontractors.

Official sources

• New York State Senate, Laws of New York (see General Business Law, Article 35-E, sections 756 to 758; State Finance Law section 139-f; General Municipal Law section 106-b)