In 2002, the New York Legislature passed the Prompt Pay Act, whose stated purpose is to promote timely payment to construction industry contractors and subcontractors. (N.Y. Gen. Bus. Law §756-a (McKinney 2009)). The Prompt Pay Act applies to “all contracts exceeding $150,000 to construct, reconstruct, alter, maintain, move or demolish any building, structure or improvement, or otherwise excavate, develop or improve land within New York.” (N.Y. Gen. Bus. Law §756 (McKinney 2009)).
The Prompt Pay Act, when read together with the New York Lien Law, facilitates prompt payment to contractors. The act’s legislative purpose is “to promote business in New York by attempting to avoid undue delays of payment for approved services.” (2002 N.Y. S.N. 7724 §1).