Prompt Payment Act
Frequently Asked Questions

Account and Payment Questions
Document Questions
Documentation Questions
Exceptions to the Act

Exceptions to the Act

Are any payments exempt from automatic interest calculation and payment?
Yes. Exempt payments include payroll and reimbursements to employees. Also, payments to vendors who are on hold due to not being in good standing are not subject to interest calculation.

Does a 30-day Payment Due Date apply even if there is a dispute with a vendor about a shipment?
No interest will accrue while the dispute is being resolved. However, the vendor must be notified within 21 days of receipt of the invoice that there is a problem with the shipment or invoice. If the dispute is resolved in favor of the vendor, interest will be applied from the original due date.

All actions and communications relevant to discrepancies or disputes between the terms of the contract and the goods and/or services provided should be documented, including the following information:

• The nature of the dispute,
• dates surrounding the dispute,
• communications with the vendor over the dispute, and
• when and in whose favor the dispute was resolved