What are the rights of subcontractors when a contractor is paid?

In Washington, subcontractors have rights when a contractor is paid. According to the Washington State Department of Labor and Industries, each subcontractor is entitled to payment or compensation under certain conditions. The contractor must have received payment from the property owner or general contractor on or before the subcontractor’s last date of performance. If the contractor has been paid for the work, then the subcontractor is legally entitled to receive payment. Subcontractors are also protected in Washington when subcontractors are required to submit lien waivers. When a subcontractor signs the lien waiver, they are essentially waiving their right to file a lien on the property. In Washington, a lien waiver must be signed no more than ten days before the contractor receives payment. This ensures that subcontractors are being paid for their work. When a contractor receives payment, subcontractors are also entitled to interest in the event that payment is not received within the appropriate timeline. If the contractor fails to remit payment to the subcontractor within seven days of receiving payment from the property owner, the contractor will be liable for interest at the rate of 1.5% per month. Finally, subcontractors who are not paid may have the right to file a lawsuit against the contractor or the general contractor. This is known as a Mechanics Lien, and it is a legal action taken to satisfy the subcontractor’s unpaid debt. In Washington, the subcontractor is required to file a document of Intent to Lien at least 20 days before filing a Mechanics Lien. This document serves as a warning to the contractor or general contractor that if payment is not received, legal action may be taken.

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What are the rights of subcontractors when a contractor is paid?

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