Understanding Wyoming’s Prompt Payment Law for Contractors

For contractors working on public projects in Wyoming, the state’s Prompt Payment Law is an essential piece of legislation to understand. Found in Wyo. Stat. §§16-6-601 and 16-6-602, this law ensures timely payment for services rendered on public projects. However, it’s critical to note that these provisions apply only to public projects, excluding private construction contracts.

This blog will walk you through key details of Wyoming’s Prompt Payment Law, including when it applies, how it safeguards contractor payments, the terms for late payment interest, and the applicable interest rate. By the end, you’ll have a clear understanding of your rights and responsibilities under this law.

What Is the Wyoming Prompt Payment Law?

Wyoming’s Prompt Payment Law was enacted to promote fairness and financial accountability in public construction projects. It mandates public entities to pay contractors and subcontractors within a specified timeframe for completed work or delivered materials. This legislation aims to prevent payment delays, which can create undue financial strain on contractors and their businesses.

While similar laws exist across the United States, Wyoming’s Prompt Payment Law has a critical distinction contractors must note—it applies exclusively to public projects. Payments for work on private construction projects are not governed by this statute, leaving terms to be defined by individual contracts or agreements.

Key Features of the Law 

• Public Projects Only: The statute strictly pertains to contracts involving public entities, which include state agencies, counties, municipalities, and other public institutions.
• Timely Payments: Public entities are required to remit payments for work or materials promptly, depending on the specific terms of the contract, provided no disputes exist about the work completed.
• Interest on Late Payments: If payment is delayed, interest begins to accrue after a set period.

Understanding the specific timing and interest provisions outlined in the law is paramount to protecting your business’s cash flow, which we’ll address next.

When Does Interest Begin to Accrue?

One of the most contractor-friendly provisions in Wyoming’s Prompt Payment Law is the automatic accrual of interest on late payments. If a public entity fails to timely compensate a contractor for properly completed work, interest charges are incurred to deter delayed payments.

Under Wyo. Stat. §16-6-601(b), interest begins accruing 45 days after the payment becomes due. The due date may depend on the contract terms, but if no specific payment schedule is stipulated, the law defaults to this 45-day rule. This means that if a public agency does not issue payment within 45 days of acceptance of completed work, the contractor is entitled to collect interest on the delayed amount.

Example Scenario

Suppose a contractor completes work for a Wyoming municipality on July 1 and submits an invoice the same day. If the invoice terms require payment within 30 days, the municipality has until July 31 to pay. If no payment is made by September 14 (45 days after the due date), interest begins to accrue automatically.

What Is the Interest Rate?

The interest rate for payments delayed beyond 45 days is outlined in Wyo. Stat. §16-6-602(c). Late payments accrue interest at 1.5% per month, which equates to 18% annually for as long as the payment remains outstanding. This rate underscores the state’s emphasis on encouraging public entities to meet their financial obligations.

For contractors, this interest can provide some relief while waiting on delayed payments, compensating for the inconvenience and financial impact of late remittance. However, it’s advisable to contact the public agency promptly to ensure the issue causing the delay is resolved as quickly as possible.

Importance of Proper Documentation

To claim interest on late payments, ensure your administrative processes are in order. This includes:

• Clear, detailed invoices stating the due date.
• Documentation of delivered work or materials, supported by receipts or signed confirmations.
• A written agreement or contract that aligns with the statute’s requirements.

By keeping thorough records, you’ll be in a strong position to enforce your rights under the Prompt Payment Law.

Why Private Projects Are Excluded

One of the most frequent questions contractors have about Wyoming’s Prompt Payment Law is why it excludes private projects. The reasoning lies in the principle of contract freedom. Unlike public entities, private parties are not bound by statutes dictating payment timelines. Instead, their obligations are governed by the terms of the contract negotiated between the two parties.

For this reason, it’s vital to draft and carefully review contracts for private construction projects. By clearly defining payment schedules, conditions for acceptance of work, and terms for late payments, you can avoid disputes and protect your financial interests.

Consider working with an attorney experienced in construction law to ensure your contracts are airtight and fair. Our construction contract review services can help you identify potential payment issues before they become problems.

What Contractors Should Know

Navigating the nuances of Wyoming’s Prompt Payment Law can be challenging, but understanding its key provisions is crucial for protecting your business. Here are the main takeaways contractors should keep in mind:

• Scope of the Law: Only public projects fall under this statute. Private construction projects rely on contractual agreements.
• Payment Timelines: Contractors should expect payment within the timelines set by contract. If no timeline is provided, public entities have 45 days before interest begins to accrue.
• Late Payment Interest Rate: At 1.5% per month (18% annually), the interest rate is significant and designed to discourage delays.
• Documentation Is Essential: Detailed records of completed work and payment terms can help ensure fair compensation.

If you’re facing payment delays on any construction project, our construction debt collection services can help you recover what you’re owed while you focus on your business.

Need Legal Help? Contact The Cromeens Law Firm

Wyoming’s Prompt Payment Law serves as an important protection for contractors working on public projects, holding public entities accountable for timely payments. By familiarizing yourself with the law’s provisions—like its application to public contracts, the 45-day accrual rule, and the 1.5% monthly interest rate—you can safeguard your business’s financial health and avoid cash flow interruptions.

If you’re frequently managing public contracts, consider consulting with a legal professional to ensure compliance and maximize your rights under this law. Clear, proactive communication with public entities and diligent record-keeping can go a long way in resolving payment issues before they escalate. Our construction law attorneys can help you navigate complex payment disputes and protect your business interests.

By staying informed and prepared, you can focus on what you do best—building Wyoming’s future, one successful project at a time.