Who this applies to
This page covers a single rule: the retainage limit in Wis. Stat. § 66.0901(9)(b), part of the statute on public contracts [2]. It applies on local public construction contracts. The section deals with the partial payments made to the contractor while the work is under way, and with how much of each payment may be kept back.
Private construction sits outside what this page covers. On a private job, the contract states the retainage terms, and a lawyer is the person to say whether anything beyond the contract applies. The same holds for retainage a contractor keeps from its subcontractors: the section's wording is about partial payments to the contractor, so the subcontract and a lawyer answer those questions.
What the rule says
The public rule divides the job at its halfway point.
First phase. Until 50% [2] of the work has been completed, retainage may be an amount equal to no more than 5% [2] of the estimate.
Second phase. From 50% [2] completion onward, further partial payments go to the contractor in full, and no additional amounts may be retained. The exception is a certification by the architect or engineer that the job is not proceeding satisfactorily. With that certification, retainage can resume, but the total held may not be more than 10% [2] of the value of the work completed.
The two figures are measured against different bases. The 5% [2] applies to the estimate, while the 10% [2] ceiling applies to the value of the work completed.
At the end of the job, retainage may be paid on substantial completion. The section does not attach a number of days to that payment.
How to comply
- First half of the job. Compare the retainage taken from each estimate with 5% [2].
- The midpoint. Once the work reaches 50% [2] completion, further partial payments are due in full.
- Resumed withholding. New retainage after the midpoint depends on the architect's or engineer's certification that the job is not proceeding satisfactorily, and the total stays within 10% [2] of the value of work completed. Without that certification, the statute's text allows no additional retainage after the midpoint.
- Release. Retainage may be paid on substantial completion, and the section sets no day count, so the contract's closeout terms, the statute's full text and a lawyer are the places to confirm when payment is actually due.
Related
- Retainage calculator: put a dollar value on a percentage holdback from an estimate.
- Retainage laws by state: Wisconsin's halfway-point rule alongside other states' caps and release rules.