New York late fee law

9%per year

A court adds this to a damages award after a verdict. It does not accrue on the invoice outside litigation, so it is not a rate you can bill today.

PREJUDGMENT ONLY. New York has NO statute setting a running contract-silent interest rate on trade debt before suit. The 9% figure is CPLR 5004(a) - "Interest shall be at the rate of nine per centum per annum, except where otherwise provided by statute" (verified at nysenate.gov) - which is a LITIGATION rate: prejudgment interest via CPLR 5001 and postjudgment interest via CPLR 5003. It is not authority to add 9% to an invoice pre-suit. The 2% carve-out added by the 2021 amendment applies only where BOTH the debt is consumer debt as defined in CPLR 5004(b) AND the defendant is a natural person, so B2B matters stay at 9%. Do not confuse this with GOL § 5-501 / Banking Law § 14-a (16%), which are usury CEILINGS on "loans or forbearances", not default rates; whether an unpaid trade invoice is a "forbearance" at all is unresolved case law and this product takes no position on it. Verify with counsel.

Parties may agree to any rate up to the 16% per annum civil usury cap for loans/forbearances (GOL § 5-501 / Banking Law § 14-a). Key B2B carve-outs, verified on nysenate.gov and DFS/practitioner sources: corporations may not interpose the civil usury defense (GOL § 5-521), though corporate borrowers may still raise criminal usury (over 25%, Penal Law § 190.40) in a civil action; loans/forbearances of $250,000 or more are exempt from civil usury limits (unless secured primarily by a 1–2 family residence); loans/forbearances of $2,500,000 or more are exempt from all usury laws including criminal usury (GOL § 5-501(6)(a),(b)). Usury governs loans/forbearances - ordinary trade-credit terms generally fall outside it, but aggressive charges can be recharacterised.

public+private-construction

Public: State Finance Law art. 11-A (§ 179-f) - state agencies must pay proper invoices within 30 days (15 for qualified small businesses) or owe prompt-payment interest, administered per OSC guidance (rate keyed to the Tax Law overpayment rate per OSC/secondary sources; exact rate mechanics not verified this session). Private construction: General Business Law art. 35-E (§ 756-b) - late interim/final payments accrue interest from the day after the due date at 1% per month or fraction of a month (about 12%/yr), or a higher contract rate.

Agreed flat late fees on commercial invoices are generally enforceable if reasonable under the liquidated-damages/penalty doctrine; in private construction GBL § 756-b supplies a statutory 1%/month baseline. Very high late charges risk being treated as interest on a forbearance and tested against the 16% civil / 25% criminal usury ceilings (subject to the $250k/$2.5m exemptions).