The payment date came and went, and the money didn't. Before anything else, know this: most late payments are resolved with a phone call and a paper trail, not a lawsuit. The skill is escalating in the right order — starting friendly and factual, and only reaching for heavier tools when lighter ones fail — while never letting a legal deadline quietly expire in the background.
This guide uses the common example of a subcontractor billing a GC, but the same ladder applies to any contractor billing a payer. Here's the sequence, then each rung in detail.
- Confirm the application was received and approved — and find out why it hasn't been paid.
- Re-read the contract: payment timing, pay-when-paid language, notice requirements.
- Send a polite written follow-up with the documentation attached.
- Escalate to a formal written demand.
- Know that prompt-payment laws may apply, with interest for late payment.
- Protect your preliminary notice and mechanics lien deadlines.
- Treat suspension of work as a contract question, not a reflex.
- Involve a construction attorney — earlier is cheaper than later.
Step 1: Confirm receipt and find out why
Unpaid is not the same as rejected, and the fix is completely different for each. Call the GC's project manager or accounting contact and ask three questions: did you receive application #6, has it been approved (and for how much), and when is payment scheduled? You'll usually land in one of three situations. The application was never received or is sitting unprocessed — resubmit and confirm. It was approved but payment is slow — that's a collections conversation. Or it was reduced or rejected — in which case you need the reason in writing, because a certification cut has to be reconciled on your next application, and a rejection has a specific defect you can cure. Chasing payment on an application that was quietly rejected wastes weeks.
Step 2: Check the contract
Before escalating, know what you actually agreed to. Three clauses matter most. First, payment timing: many subcontracts start the payment clock when the GC is paid by the owner, not when you submit — so "late" may be defined differently than you think. Second, contingent-payment language: pay-when-paid clauses generally address timing of payment, while pay-if-paid clauses attempt to shift the risk of owner nonpayment to you entirely. Which is enforceable, and to what extent, varies by state — but knowing which one you signed shapes every conversation that follows. Third, notice and dispute provisions: many contracts require written notice of payment disputes within a set window, and skipping a required notice can weaken an otherwise solid claim.
If the GC says "the owner hasn't paid us," ask the natural follow-up: has the owner been billed for my work, and has that application been certified? Your work appearing on the GC's certified application to the owner is a fact worth knowing before you accept a pay-when-paid explanation.
Step 3: The polite written follow-up
After the phone call, put it in writing — email is fine at this stage. Keep it short, factual, and warm enough to preserve the relationship: application number, period, the certified amount, the contractual due date, days outstanding, and a specific ask ("please confirm payment date by Friday"). Attach the application itself, the signed schedule of values behind it, and any approvals you have. The subtext of a well-documented follow-up is powerful: this contractor keeps records, and this invoice will not get lost.
This is where documentation discipline pays for itself. A GC disputing a sloppy application has endless places to hide — mismatched totals, unsigned change orders, vague line items. One that receives a consistent application every month, with certified amounts that reconcile period over period and every change order signed before it appears on the schedule of values, has almost nothing to push back on. Documentation isn't just defense for a dispute later; it removes the excuses that create disputes in the first place.
Step 4: The formal demand
If follow-ups stall, escalate the format. A demand letter states the amount due, the contractual basis, the history of requests, and a firm deadline, and it notes that you'll pursue available remedies — lien rights, prompt-payment interest, contract claims — if payment isn't made. Send it by a method that proves delivery, address it above your day-to-day contact, and keep the tone professional: firm and specific collects faster than angry. Many companies have attorneys or collections services send this letter, which raises the temperature at modest cost.
Step 5: Prompt-payment laws
Contractors often don't realize the law may already be on their side. Prompt-payment statutes exist at the federal and state level for public projects, and many states have them for private projects too. They generally set deadlines for payers to pay after receiving a proper application, require interest on late payments, and in some cases limit how long payment can be withheld and for what reasons. The details — deadlines, rates, which projects are covered — vary widely by jurisdiction, so treat this as a flag to investigate for your state and project type, not a promise. Even just mentioning prompt-payment interest in a demand letter signals you've done your homework.
Step 6: Protect your lien deadlines
Mechanics lien rights are the strongest leverage most unpaid contractors have — a claim against the project property itself that owners and lenders cannot ignore. But they run on strict, unforgiving deadlines that vary by state, and two clocks matter. First, preliminary notice: many states require a notice near the start of your work to preserve lien rights at all, so ideally this was sent months before any payment problem. Second, the lien filing deadline itself, typically measured from your last work or from project completion. These windows expire whether or not you're negotiating in good faith — a payer who strings you along past your lien deadline has, intentionally or not, disarmed you.
You don't have to file a lien to benefit from lien rights. A notice of intent to lien — a warning shot, required in some states and effective in most — resolves a remarkable share of payment standoffs by itself, because a recorded lien creates problems for the owner and GC that are worth far more than your invoice. Use the leverage while you have it: know your deadline the day the payment goes late, and never let a promise of payment carry you past it.
Step 7: Suspension of work — carefully
Walking off the job feels like the obvious response to nonpayment, but whether you may suspend work depends on your contract and applicable law — and getting it wrong can convert the GC's breach into yours. Some contracts grant a right to suspend after a defined period of nonpayment and written notice; others are silent, and stopping work could expose you to delay claims or default termination. Before suspending: confirm the contract supports it, give every notice the clause requires, and get advice if the amounts are significant. Done correctly and lawfully, suspension is powerful precisely because it's disruptive. Done casually, it hands the other side a defense.
Step 8: When to involve an attorney
The instinct is to treat a construction attorney as the last resort, after everything else has failed. That's usually backwards. An hour of advice early — when the first payment goes late — costs little and buys a review of your contingent-payment clause, a check on your notice obligations, and your actual lien deadline, so every later step is taken from solid ground. Litigation is what gets expensive, and early advice is how you avoid it. Involve counsel sooner when the amount is large, the payer sounds financially shaky, your lien deadline is approaching, or the dispute involves alleged defects rather than simple slow payment.
None of this is legal advice, and the details matter enormously: lien and notice deadlines, prompt-payment rules, and the enforceability of contract clauses all vary by state and project type. Treat this guide as a map of what exists — and a construction attorney in your state as the source for what applies to you.
Frequently asked questions
- How long should I wait before following up on an unpaid application?
- Don't wait past the contractual due date — follow up the day after payment is late, politely. Many contractors also confirm receipt and approval within a few days of submitting, which catches lost or rejected applications weeks before they'd otherwise surface as a missing payment.
- What's the difference between pay-when-paid and pay-if-paid?
- As commonly understood, pay-when-paid addresses timing — the GC pays you after being paid, but still owes you eventually — while pay-if-paid attempts to make owner payment a strict condition of your right to be paid at all. Courts treat the two very differently, enforceability varies by state, and the exact wording controls. If your contract has contingent-payment language, it's worth an attorney's read.
- Will filing a mechanics lien destroy the relationship with the GC?
- It's a serious step, but in construction it's an understood one — GCs know liens are how unpaid subs protect themselves, and a notice of intent to lien usually precedes an actual filing and often resolves the matter alone. What genuinely destroys relationships is unmanaged silence and surprise. A contractor who communicated at every rung of the ladder rarely shocks anyone by protecting their rights at the end of it.
- Can I charge interest on late payments?
- Possibly from two sources: your contract, if it includes a late-payment interest provision, and prompt-payment statutes, which in many jurisdictions impose interest on late payments for covered projects. Rates and applicability vary by state and project type — check both before adding interest to a demand.
- What if my application was actually rejected, not just unpaid?
- Get the reason in writing and treat it as a fix, not a fight: most rejections come down to math errors, unsigned change orders billed on the schedule of values, missing waivers or certified payroll, or billing ahead of approved percentages. Cure the defect, resubmit promptly, and reconcile any reduced certification on your next application so your cumulative figures stay consistent.
- Do these steps change on a public project?
- The ladder is the same, but the remedies differ: you generally can't lien government property, so public projects substitute payment bond claims (with their own strict notice deadlines) for mechanics liens, and public prompt-payment statutes tend to be stronger. Same discipline, different endgame — and the deadlines are just as unforgiving.
