Stambaugh bill ensuring timely pay for subcontractors signed into law
A bill sponsored by Rep. Melanie Stambaugh to expedite payments to subcontractors working on public projects was signed into law by the governor Tuesday. House Bill 1538 will allow subcontractors to request that general contractors provide a bond for their portion of the retainage. Under the legislation, general contractors will be required to comply with the request within 30 days.
Currently, public entities are required to withhold up to 5 percent of the value of a public works contract until the project is mostly complete. This is known as retainage. To avoid such withholding, general contractors can bond the 5 percent retainage. However, when general contractors choose not to bond for the retainage, subcontractors do not receive that 5 percent when they complete their work.
Stambaugh, R-Puyallup, says her bill will change that to ensure subcontractors are paid in a timely manner going forward.
“The 5 percent retainage that’s withheld from smaller subcontractors often represents the profit margin, capital and payroll they need to stay in business,” said Stambaugh. “This bill will enable them to not only stay in business, but to grow their business by making it easier for them to bid on new projects and pay their employees in a timely manner. I want to thank members of both the business and labor community for bringing this policy to me, as well as the many people who helped House Bill 1538 become law this session.”
House Bill 1538 will go into effect later this year.