Subcontractor Not Getting Paid? Here's What to Do

The Reality of Non-Payment in Construction

Getting stiffed on a construction job isn't rare — it's practically an industry tradition. Studies show that payment problems affect over 70% of subcontractors at some point. The average subcontractor waits 83 days past their invoice date to get paid.

Here's the good news: you have more leverage than you think, especially if you act early and follow the right steps.

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Step 1: Document Everything

Before you make a phone call or send a threatening email, get your documentation in order.

Gather these:

• Signed contract or subcontract agreement
• All change orders (signed and unsigned)
• Every invoice you've submitted, with dates
• Proof of delivery or completion (daily logs, photos, sign-offs)
• Any communication about the payment (emails, texts, voicemails)
• Preliminary notice or notice to owner (if you sent one)

Documentation is your ammunition. Every step that follows depends on having a clear paper trail.

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Step 2: Send a Written Payment Demand

Don't just call the GC and complain. Put it in writing.

A proper demand letter should include:

• The project name and contract reference
• The specific invoices that are overdue
• The total amount owed
• A deadline to pay (typically 7-10 business days)
• A statement that you will pursue all available remedies if not paid

Send it by email AND certified mail. Keep copies of everything.

Why this matters: A written demand creates a legal record. It also shows courts later that you tried to resolve this before escalating. Many GCs who ignore phone calls suddenly pay attention when they receive a formal written demand.

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Step 3: Know Your Lien Rights

A mechanic's lien is the most powerful tool a subcontractor has. It puts a legal claim on the property you improved, which means the owner can't sell or refinance until your lien is resolved.

Critical deadlines vary by state:

• Most states require a preliminary notice within 20-30 days of starting work
• Lien filing deadlines range from 30 to 120 days after your last day of work
• Some states count from last day of work; others count from project completion

If you miss your lien deadline, you lose this right permanently. There are no extensions and no exceptions. Check your state's lien laws the moment a payment is late — or better yet, before you start the job.

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Step 4: Check for Payment Bond Claims

On public projects (government-funded), you can't file a lien against government property. Instead, you have rights under the Miller Act (federal) or state-level Little Miller Acts that require payment bonds.

If a payment bond exists on a private project, you can make a claim against the GC's surety bond as well.

To make a bond claim:

• Identify the surety company from the bond
• Send a written notice of your claim within the statutory deadline (usually 90 days from last work)
• The surety is then legally obligated to investigate and pay valid claims

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Step 5: Consider Stopping Work

In most states, you have the right to stop work if you're not being paid — but check your contract first.

Before stopping work:

• Review your contract for "right to suspend" language
• Send written notice that you will suspend work in X days if payment is not received
• Document the exact date and condition of work when you stop
• Do not remove materials or equipment from the site (this can create separate legal issues)

Warning: Some contracts include "no work stoppage" clauses or require disputes to go through a specific process. Stopping work in violation of your contract could give the GC grounds to terminate you for cause — which is much worse than termination for convenience.

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Step 6: File a Formal Complaint

Depending on your state, you may be able to file a complaint with:

• Your state's Contractor Licensing Board (if the GC is licensed)
• The state Attorney General's office for unfair business practices
• The Better Business Bureau
• Your local construction trade association

These won't get you paid directly, but they create pressure and a public record that motivates resolution.

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Step 7: Small Claims Court or Litigation

If the amount is under your state's small claims limit (typically $5,000-$15,000), you can file in small claims court without a lawyer. The process is straightforward and relatively fast.

For larger amounts, you may need to hire a construction attorney. Many work on contingency for clear-cut non-payment cases — meaning they only get paid if you do.

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How to Prevent This on Your Next Job

The best time to protect yourself from non-payment is before you sign the contract.

Before signing, check for:

• Clear payment terms with specific timelines (not "upon owner's payment")
• Pay-when-paid vs. pay-if-paid language (critical difference)
• Retainage terms and release conditions
• Interest provisions for late payments
• Right to stop work for non-payment

Early in the project:

• Send your preliminary notice on day one (required in most states to preserve lien rights)
• Invoice promptly and keep copies of every submission
• Document every change order in writing — even small ones

Upload your next contract to ContractDoctors before you sign. Our AI will flag missing payment protections, identify pay-if-paid traps, and give you specific language to negotiate before you commit to the job.