Prompt Payment Law Overview - Public Projects

Tennessee’s prompt payment statutes set forth specific timeframes for when general contractors, subcontractors, suppliers, and others involved with a public construction project must be paid. This page provides an overview of these regulations and addresses frequently asked questions related to the Tennessee prompt payment laws. You can also read the Full-Text of Tennessee’s Prompt Payment Statutes.

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Tennessee Prompt Payment Laws
Owner Payment to Prime Contractor
Payment is due within 45 days after the invoice, unless otherwise agreed.
Prime Contractor to Subcontractor
Payment is due within 30 days after the prime contractor receives payment from above.
Subcontractor to Lower Tier
Payment is due within 30 days after the invoice, in accordance with the payment schedule set forth by contract, but payment is subject to valid pay-if-paid clauses.
What You Need To Know
Important Details
Late payments accrue interest at 1.5% per month.

Prompt Payment in Construction

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Tennessee Frequently Asked Questions

Prompt Payment Frequently Asked Questions

In order for the provisions of the Tennessee prompt pay statutes to apply, the party requesting payment must be entitled to payment pursuant to the terms of the contract, and must submit a pay request based on the labor and/or materials furnished.

No. Tennessee doesn’t allow miscellaneous amounts to be included on the face of a bond claim.

There is no specific requirement for interest to being to accrue on late payments in Tennessee other than the requirement that the payment must be late pursuant to the prompt pay statute. Note that any interest remaining unpaid at the end of a 60-day period is added to the principle amount of the debt and will accumulate interest.

Tennessee doesn’t specifically set forth reasons for which payment may be withheld by statute, so it is likely that the parties’ contract will govern acceptable reasons for withholding payment.