New York Consolidated Laws, General Business Law - GBS § 756-c. Retention

By mutual agreement of the relevant parties an owner may retain no more than five per centum of the contract sum as retainage.  A contractor or subcontractor may also retain no more than five per centum for retainage and in no case shall retainage exceed the actual percentage retained by the owner.  Retainage shall be released by the owner to the contractor no later than thirty days after the final approval of the work under a construction contract.  In the event that an owner fails to release retainage as required by this article, or the contractor or subcontractor fails to release a proportionate amount of retainage to the relevant parties after receipt of retainage from the owner, the owner, contractor, or subcontractor, as the case may be, shall be subject to the payment of interest at the rate of one percent per month on the date retention was due and owing.