3 FAQs about payment remedies for public works subcontractors

| Feb 22, 2021 | Construction Law

In Louisiana, a special set of statutes known as the Public Works Act protects the payment rights of subcontractors who provide materials or labor for state government construction projects.

Under this act, subcontractors facing a payment dispute may be able to receive funds directly through the governing authority rather than pursuing a claim against the general contractor.

1. How does the law protect subcontractor payment?

Under the Public Works Act, government entities must require that contractors post a bond within 30 days of beginning work when accepting a public project worth more than $25,000. This bond must have sufficient and solvent surety to cover at least 50% of the contract price for payment of subcontractors and other claimants.

2. Who can bring a claim?

The Public Works Act provides protection to claimants hired by a general contractor for construction or repair of public projects. This may include subcontractors, laborers and material suppliers, including those owed payment for the lease or rental of moveable property. However, the Act does not provide remedies for suppliers of suppliers.

3. When can a subcontractor pursue a claim?

To receive payment under the Public Works Act, a claimant must file and record a sworn statement in the local parish’s mortgage records detailing the amount due and the name of the contractor. Filing this statement prevents the governing entity from making a final contractor payment without also providing payment to the claimant.

However, the government entity may limit the period in which a claimant can record a statement. Generally, a subcontractor must file a statement within 45 days of the governing authority either recording an acceptance of the work or posting a notice of contractor default in the mortgage records.