Pennsylvania
The Contractor and Subcontractor Payment Act sets payment deadlines, interest and penalties on private construction, with a 2018 amendment adding retainage-release rules.
Retainage
Private works. Pennsylvania's Contractor and Subcontractor Payment Act does not cap the retainage percentage on private work, which is set by contract. Amendments effective in 2018 added rules on release: an owner must release retainage within 30 days after final acceptance of the work, and a contractor or subcontractor may obtain release of retainage before final completion by posting a maintenance bond of a stated percentage of the retainage with the party withholding it. Retainage may not be withheld on undisputed amounts beyond the periods the Act allows.
Public works. Pennsylvania's Procurement Code sets retainage limits for Commonwealth and local public construction, including a reduction once the project is half complete, and requires release within set periods after completion. Confirm the current figures for your awarding body.
Prompt payment
Private works. The Contractor and Subcontractor Payment Act applies to private construction with some exclusions, including smaller residential projects. Unless the contract provides otherwise, an owner must pay a contractor within 20 days after the end of the billing period or delivery of the invoice, whichever is later. A contractor must pay its subcontractors within 14 days of receiving payment for their work, and the same requirement flows down. Late payments accrue interest at 1 percent per month, and a party that wrongfully withholds payment may owe an additional penalty of 1 percent per month, with attorney fees to the substantially prevailing party. The Act also allows a contractor or subcontractor to suspend work after written notice when payment is not made as required, and limits the reasons for withholding.
Public works. The Procurement Code sets payment deadlines and interest for public construction and requires pass-through payments to subcontractors within set periods.
Official sources
- Pennsylvania General Assembly (see the Contractor and Subcontractor Payment Act, Act 7 of 1994 as amended, 73 P.S. sections 501 to 516; and the Procurement Code, 62 Pa.C.S., Chapter 39)
Last reviewed 2026-10-18. If you know of a change since then, reply to any issue of The Float and we will check it.