Why Subcontractors Wait YEARS to Get Paid (And How to Stop It)

In this episode, Jonathan Cor sits down with Joe Kaiser, President of Herzog Glass, Melissa Rossi, CEO of Division 9, and Rob Scott, CEO of Scott Coatings, for the first Construction CEO roundtable.

The conversation centers on getting paid as a subcontractor and the reality that subs often fund payroll, labor, materials, and other project costs long before the money reaches them. The executives share firsthand stories of retainage being held for four or five years, including roughly $400,000 tied up on a single project.

They get into delayed change orders, T&M tickets, contract provisions, payment leverage, GC/sub relationships, and why subcontractors need to understand exactly what they're signing. They also turn the criticism back on subcontractors and discuss how accepting unfavorable terms helps perpetuate them.

The conversation ultimately moves toward solutions: better contracts and documentation, stronger relationships, collective action among subcontractors, and legislative changes such as Washington's retainage reforms. The group also explains what the best GCs do differently and why the underlying payment structure of construction may need to change.