CHERRY HILL – A measure sponsored by Senator Steve Sweeney that entitles contractors to prompt payment for completed construction projects was signed into law today by Governor Jon Corzine. The measure was signed during the Southern NJ AFL-CIO Central Labor Council’s annual Peter J. McGuire Labor Day Scholarship Breakfast.
“This bill establishes specific guidelines for the payment of construction projects. All too often, contractors and construction companies are kept waiting for months on end to receive payment for their labor,” said Senator Sweeney, D-Gloucester, Cumberland and Salem, who Chairs the Senate Labor Committee. “The 30 day period from the presentation of the bill to its payment is designed to help cut out much of the red tape that is so often associated with construction projects, while allowing property owners to question any items on their bill that they don’t understand or don’t agree with.”
Senator Sweeney’s bill, S-1726, would allow persons having construction done on their property a twenty day period after the work is completed to review the bill presented to them by the contractor. During that twenty day period, property owners would be able to question any part of the bill, and submit in writing any reasons for withholding payment. Once the property owner and the contractor agree on a bill, the property owner would have an additional ten days to pay. The total period between the presentation of the bill to the property owner and the payment cannot exceed 30 days.
Under current law, the lateness penalty would be the amount of bill’s prime rate plus 1 %. This penalty will also apply to the new law.