- with readers working within the Accounting & Consultancy and Chemicals industries
Act 822 of the 2026 Regular Session (House Bill 638, by Representative Jacob Landry) is a dramatic change in Louisiana private construction law. It amends and reenacts Louisiana’s private prompt-payment statute (La. R.S. § 9:2784) into a comprehensive prompt-payment regime that runs from the top of the payment chain to the bottom. The new rule becomes effective August 1, 2026.
Three features make Act 822 highly consequential for companies involved in industrial construction. First, the Act imposes a direct, enforceable duty on owners to pay their contractors on a fixed statutory deadline. Second, it dramatically increases and restructures the penalties for late payments by contractors and subcontractors. Third, it declares that “[a] waiver of a provision of this Section shall be absolutely null.” That converts the payment timeline from a set of default rules the parties could contract around into a mandatory floor that private contracts cannot lower.
Under Act 822, if an owner of immoveable property receives a written payment request from a contractor for an amount payable under a construction contract, the owner must pay the amount owed no later than thirty-five days after receiving the request, in the absence of a good-faith dispute.
Act 822 provides that contractors and subcontractors must pay their subcontractors within seven days of receiving payment, absent a good-faith dispute. If a good-faith dispute exists, the new law requires any undisputed amounts to be paid within the seven days of receiving payment. The law provides that a good-faith dispute includes a dispute over whether the work was “performed in a proper manner under the contract.”
If the owner, contractor, or subcontractor fails to pay pursuant to the statutory deadlines, it is subject to a penalty of 1.5% of the unpaid amount per month.
Act 822 also provides that if an action for payment is brought, the prevailing party is entitled to recover attorney fees and court costs.
Importantly, Act 822 carves out contracts related to the oil and gas industry.
Given the language in Act 822 preventing companies from contracting around its deadlines, it will be important for companies working in construction in Louisiana to ensure their accounting procedures will timely fulfill the strict payment obligations created by Act 822.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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