If you put in a day’s work, you expect to get a day’s pay — and you expect to get paid promptly, right?
Those expectations are at the core of our free enterprise system. For decades however, plumbing contractors have been putting in a day’s work, but not getting paid in full until many weeks — or more typically, many months — later. Thanks to a recent Massachusetts law, that’s no longer the case.
Associated general contractors had been using a long-held practice known as “retainage” to routinely withhold payment to subcontractors such as plumbers. Incorporated into most contracts, GCs would customarily hold back 10 percent of a subcontractor’s pay until they determined that the work was completed to their satisfaction. Although construction projects would, in fact, be successfully completed, GCs wouldn’t release the funds until much later.
The Mass. retainage law, however, changes the dynamics by specifying a payment schedule as well as the amount that can be withheld. Read more in The Pipeline, the industry newsletter jointly produced by the GBPCA and Plumbers Boston Local 12.