All too often contractors working on a jobsite find themselves repeatedly seeking payment for work already performed. These workers are left feeling helpless and obligated to continue the job set forth in the agreement at the risk of not being paid. However, Nevada’s Prompt Payment Statutes provide contractors with the steps necessary to pursue payment for completed work.
A contractor should first issue a Stop Work Notice. Under Nevada Revised Statute (NRS) § 624.610, a contractor may issue a Stop Work Notice providing written notice to the owner that the contractor will cease labor on the project in ten days if payment is not rendered. If the contractor is not paid within the ten-day period, he or she is under no obligation to continue working.
After a contractor has ceased all work and still has not been paid for work performed on a project, he or she should then provide the owner with a Notice of Termination. Pursuant to NRS § 624.610(2), a contractor may terminate a contract with the owner by providing a notice of termination fifteen days prior to terminating the contract. If the contractor is paid prior to the date of termination, the contractor shall not terminate the agreement and shall resume working on the project.
However, if the contractor is not paid and the contract is terminated, the contractor may sue the owner to recover the amount owed, including the cost of all work, labor, materials, equipment, and services furnished by the contractor; any overhead the contractor and the lower-tiered subcontractors and suppliers incurred; and the profit the contractor and the lower-tiered subcontractors and suppliers earned through the date of termination. The contractor may also recover the balance of the profit that the contractor and the lower-tiered subcontractors and suppliers would have received if the agreement had been performed in full, including interest and reasonable costs incurred in collecting the amount due.
For more information about how contractors can protect themselves with Nevada’s Prompt Payment Statutes, please contact Kylee Gloeckner in LGC’s Las Vegas office.