Currently there is legislation pending in the New Jersey Legislature that will require builders to pay subcontractors upon demand or immediately instigate arbitration. These bills (A-3174/Caraballo and S-1726/Sweeney) are on a "fast track".

By way of background, this proposal provides that an invoice is automatically deemed approved and certified by an owner 10 days after the owner receives it, unless the owner disputes the amount in writing. It then requires the owner to make full payment to the contractor not more than 20 calendar days after the billing date specified in the contract. According to this proposal, all disputes regarding payment are submitted to binding arbitration.

This proposal was introduced by Senator Sweeney (D-3) in March, released from the Senate Labor Committee, and forwarded to the Senate Budget and Appropriations Committee for further review. The Assembly companion measure was introduced by Assemblyman Caraballo (D-29) earlier this month and forwarded to the Assembly Labor Committee for review.

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