Cal. Codes » Business and Professions Code / DIVISION 3. PROFESSIONS AND VOCATIONS GENERALLY / CHAPTER 9. Contractors / ARTICLE 7. Disciplinary Proceedings
California Codes

Cal. Business and Professions Code § 7108.5 (2026)

Disciplinary Proceedings

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(a)A prime contractor or subcontractor shall pay to any subcontractor, not later than seven days after receipt of each progress payment, unless otherwise agreed to in writing, the respective amounts allowed the contractor on account of the work performed by the subcontractors, to the extent of each subcontractor’s interest therein. In the event that there is a good faith dispute over all or any portion of the amount due on a progress payment from the prime contractor or subcontractor to a subcontractor, the prime contractor or subcontractor may withhold no more than 150 percent of the disputed amount.

(b)Any violation of this section shall constitute a cause for disciplinary action and shall subject the licensee to a penalty, payable to the subcontractor, of 2 percent of the amount due per month for every month that payment is not made.

(c)In any action for the collection of funds wrongfully withheld, the prevailing party shall be entitled to his or her attorney’s fees and costs.

(d)The sanctions authorized under this section shall be separate from, and in addition to, all other remedies, either civil, administrative, or criminal.

(e)This section applies to all private works of improvement and to all public works of improvement, except where Section 10262 of the Public Contract Code applies.

Notes of Decisions
Cited in 12 cases (4 in the last 5 years), 2001–2023 · leading case: Tesco Controls, Inc. v. Monterey Mech. Co., 124 Cal. App. 4th 780 (Cal. Ct. App. 2004).
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Tesco Controls, Inc. v. Monterey Mech. Co., 124 Cal. App. 4th 780 (Cal. Ct. App. 2004). · cites it 2× “However, Business and Professions Code section 7108.”
FEI Enter. Inc. v. Yoon, 194 Cal. App. 4th 790 (Cal. Ct. App. 2011). “) In 2009, the Legislature “[r]ecast[]” Business and Professions Code section 7108.”
Martin Bros. Constr., Inc. v. Thompson Pac. Constr., Inc., 179 Cal. App. 4th 1401 (Cal. Ct. App. 2009). · cites it 2× “Business and Professions Code Section 7108.”
Denver D. Darling, Inc. v. Controlled Environments Constr., Inc., 89 Cal. App. 4th 1221 (Cal. Ct. App. 2001). “” 12 Within the same chapter, Business and Professions Code section 7108.”
Nat'l Technical Sys. v. Superior Court, 97 Cal. App. 4th 415 (Cal. Ct. App. 2002). “5 requires a prime contractor to pay to “any subcontractor, not later than 10 days of receipt of each progress payment, unless otherwise agreed to in writing, the respective amounts allowed the contractor on account of the work performed by the subcontractors, to the extent of…”
Blois Constr., Inc. v. FCI/Fluor/Parsons, 245 Cal. App. 4th 1091 (Cal. Ct. App. 2016). “) *1097 This argument overlooks the requirements of another prompt payment statute, Business and Professions Code section 7108.”
Blois Constr. v. FCI/Fluor/Parsons, No. B262310M (Cal. Ct. App. Apr. 12, 2016). · cites it 2× “) This argument overlooks the requirements of another prompt payment statute, Business and Professions Code section 7108.”
Volpe Co. v. Sausal Corp., No. A157577 (Cal. Ct. App. Sept. 29, 2021). “Two such laws are at issue in this case: Public Contract Code section 4107,1 which, among other things, regulates the authority of a prime contractor to substitute a new subcontractor in place of the subcontractor listed in the original bid; and Business and Professions Code…”
L.A. Unified Sch. Dist. v. FH Paschen/S.N. Nielsen, No. B300332 (Cal. Ct. App. Feb. 8, 2023). “usiness hours, for the purpose of interviewing employees and inspecting and copying such books, records, accounts and other material which may be relevant to any dispute between OWNER and CONTRACTOR and/or any matter under investigation for purposes of determining compliance…”
Morrow-Meadows Corp. v. Honeywell Int'l Inc., No. 2:22-cv-05716 (C.D. Cal. Oct. 24, 2022). “The first statute is California 15 Business and Professions Code section 7108.”
Morrow-Meadows Corp. v. Honeywell Int'l Inc., No. 2:22-cv-05716 (C.D. Cal. Mar. 13, 2023). “The first statute is 15 California Business and Professions Code section 7108.”
James L Harris Painting v. West Bay, No. C072169M (Cal. Ct. App. Sept. 3, 2015). “(West Bay) and Safeco Insurance Company of America (Safeco) challenge the trial court’s denial of their motion for attorney fees under Business and Professions Code section 7108.”
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