New Jersey Bill Targets Payment Delays
Assembly Bill A5335 would give contractors an opportunity to correct qualifying clerical or technical errors without losing an otherwise-due progress payment.
By Boris Peyzner, Construction Law Group at Mandelbaum Barrett PC
Cash flow is the lifeblood of every construction project. Contractors must pay employees, subcontractors, suppliers, equipment costs, insurance premiums and other project expenses long before the project is complete. When a progress payment is delayed, the consequences can quickly spread throughout the entire contracting chain.
Sometimes, however, payment is delayed not because the work is defective, incomplete, or disputed, but because the contractor’s payment application contains a minor paperwork error. A missing attachment, an incorrect reference number, an immaterial mathematical discrepancy, or another technical defect which can result in the rejection of an entire payment application. Even when the contractor quickly corrects the problem, the payment may be pushed into the public entity’s next review, approval or payment cycle.
A recently introduced New Jersey bill seeks to prevent that result.
The Proposed Legislation
New Jersey Assembly Bill A5335 was introduced on June 28, 2026, and referred to the Assembly State and Local Government Committee. As of July 21, 2026, the bill remains pending and has not become law.
If enacted, A5335 would prohibit public and governmental entities from withholding an otherwise-due partial payment solely because a contractor’s payment application or supporting documentation contains a de minimis clerical, administrative or technical error.
The bill would apply broadly to public construction contracts involving entities that include boards of education, State colleges, the New Jersey Department of Transportation, county governments, the New Jersey Turnpike Authority, local contracting units and State agencies.
What Would Qualify as a Minor Error?
The bill defines a clerical, administrative, or technical error as an unintentional error, omission, defect, or minor mathematical discrepancy in a payment application or its supporting documentation.
The protection would apply only when the error does not materially affect:
- The amount due
- The contractor’s performance of the contract
- The public entity’s legal ability to issue the payment.
The bill does not identify every mistake that would qualify as de minimis. That determination would likely depend on the particular payment application, contract requirements, project circumstances and reason given by the public entity for withholding payment.
Examples