A subcontractor completed electrical work on January 10th but was not paid by the general contractor. The owner made final payment to the general contractor on February 20th. Under California prompt payment law, what is the latest date the general contractor must pay the subcontractor?
Correct Answer
C) February 27th
The general contractor must pay subcontractors within 7 days of receiving payment from the owner, so by February 27th.
Why This Is the Correct Answer
California's prompt payment statute (Civil Code Section 8814 for private works) requires a general contractor to pay subcontractors within 7 days of receiving payment from the owner. The owner paid the GC on February 20th, so 7 days later is February 27th — the latest date the GC must pay the subcontractor.
Why the Other Options Are Wrong
Option A: March 1st
March 1st would be 9 days after February 20th — beyond the 7-day statutory window. No provision allows this extended timeline once the GC has been paid.
Option B: January 17th
January 17th is 7 days after the subcontractor completed work (January 10th), but the prompt payment clock for GC-to-sub payment starts when the GC RECEIVES payment from the owner — not when the sub completes work. The GC cannot pay the sub before being paid by the owner under the standard pay-when-paid framework.
Option D: March 22nd
March 22nd is 30 days after February 20th. While 30-day payment windows appear in other payment contexts (e.g., owner to GC), the GC-to-sub requirement is 7 days, not 30.
Memory Technique
The '7-day pass-through rule': money flows down the payment chain within 7 days. Owner pays GC → GC has 7 days to pay subs → subs have 7 days to pay their sub-subs. Think of it as a relay race where each leg must be completed within 7 days of receiving the baton.
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