Can I Stop Working If I Am Not Getting Paid (And If I Do, How Do I Get Paid)?
By Alex Barthet
In this article, we will discuss in detail the answer to one of the most common questions we receive in our construction law firm, if I’m not getting paid, can I stop working, and if I do, how do I get paid? To determine whether or not to stop working if you are not getting paid, you need to consider the following.
- What does your contract say about stopping work?
- What is the status of the work and the payments on the job at the time you want to stop working?
- Does your contract have a pay-when-paid provision?
- Do you have lien or bond rights?
- Are you ready to take the plunge and suffer the possible adverse consequences?
What does your contract say about stopping work?
Your contract may just be a handshake, a purchase order or a simple one-page agreement, so it probably says nothing about stopping work. Work stoppage provisions are most often found in those longer and more significant contracts usually on larger jobs. Most sophisticated contracts address work stoppage as a specific issue as seen in the sample below.
“In the event of a dispute as to whether any item or portion of the work is within the scope of the work to be performed by Subcontractor or any dispute as to whether Subcontractor is entitled to an extra payment or additional time, Subcontractor shall continue to proceed diligently with the performance of the work, this subcontract and any disputed work, pending any resolution. The existence of a dispute shall not be grounds for any failure to perform by subcontractor.”
This means that if you sign a contract with this language, you have agreed in advance that you’re going to follow the dispute resolution process that exists in the contract and that stopping work is actually not available to you as an option. You need to look out for this when you are negotiating your contract. According to such a provision, you need to keep working even though you may not be getting paid. You cannot stop work even in a situation where you have to undertake mediation or arbitration or maybe even file a lawsuit to resolve the dispute.
If you don’t have a written agreement, or your agreement doesn’t explicitly prevent you from stopping work, you may be able to stop work. This doesn’t mean you absolutely can stop working if you don’t have this provision. It just means that your analysis can