CSLB CONTRACTOR'S LAW & BUSINESS EXAM
1. Employment Development Department: An employer remits State disability taxes withheld from
an employees wages to what agency?
2. National Labor Relations Act of 1935: Which act establishes the rights of workers to organize into
unions and negotiate contracts?
3. It is not legal to ask prospective employees about arrest not leading to convictions.: A contractor
has had a problem with employees stealing tools and equipment from job sites. When conducting
job interviews, may the contractor ask prospective employees about their arrest records?
A. It is legal to ask prospective employees about arrests not leading to convictions.
B. It is not legal to ask prospective employees about arrests not leading to convictions.
C. It is legal for a private employer to ask about arrests not leading to convictions, but it would not be
legal for city or county agencies to ask about such arrests.
D. It is legal for a private employer to ask about arrests leading to convictions, but it would not be
legal for a federal, state, or local public agency to do so.
4. If it is a dispute of more than $25,000 it can be transferred to Superior Court.: Why would a
contractor have a case in Superior Court?
5. Car accident in which an employee steps onto a public road, gets hit by a car, and suffers a
concussion.: Which would not have to be reported to DOSH immediately or within 24 hours?
A. Death from a three-story fall.
B. Drunken crane operator hits a high-voltage power line
C. Car accident in which an employee steps onto a public road, gets hit by a car, and suffers
a concussion. D. Employee falls off forklift and suffers a sever back injury.
6. Yes. If the contractor has reason to believe that the subcontractor has made an error in preparing
his bid, the contractor should notify the subcontractor of the apparent error, but the contractor may
not disclose the amounts of the other bids.: A general contractor has obtained bids from several
subcontractors for a private project. He notices
that one bid is substantially lower than the rest. Is it ethical and a good business practice for this
contractor to inform the subcontractor that the bid is substantially lower than the bids of the other
subcontractors? 7. The 31st of January.: An employer must furnish an employee with a completed IRS
Form W-2 (Wage and Tax Statement) by:
8. Write a new contract and ask the owner to sign it.: After a job is completed, the owner decides to
have additional work done. How should the contractor proceed?
9. Notify the owner that the person or firm who sent the notice has improved the property.: The
purpose of a 20-day preliminary notice for private work is to?
, 10. Yes, if the contractor provides each employee with a wage deduction state ment semimonthly or
at the time of each wage payment.: Is it legal for a contractor to pay employees in cash?
11. Decline to bid the work.: You are bidding on a job with plans drawn by the owner. You notice a
code violation and bring it to the attention of the owner. The owner declines to remedy the code
violation and tells you not to worry. What should you do?
12. Add profit and overhead to labor and materials: On a time-and-materials job, you should:
13. Claim the damage on your general liability insurance policy.: Your employee sets a cabinet
wrong. The cabinet falls from the wall and damages the client's counter top. What should you do?
A. Claim the damage on your general liability insurance policy.
B. Require the employee to pay for the damage to the countertop.
C. Tell the client to claim the damaged counter top on his or her homeowner's
insurance policy. D. No action is required: The client must assume the risk of
damage.
14. The critical path method.: Of the following, which is best for determining the number of hours
required for different phases of a project and for making sure the job is on schedule?
A. Bar graph and chart
B. Cash analysis chart
C. Review plans
D. Critical path method
15. It is not legal for the contractor to require lie detector tests, but it would be legal for a federal,
state, or local public agency to require lie detector tests of their employees.: Is it legal for a contractor
to require employees to take a lie detector test?
16. The employee must apply for a SSN.: If a newly hired employee does not have a SSN, what
should be done?
17. As many times as necessary within 18 months.: How many times may you take the
contractors license exam before your original application is voided?
18. 30 days before it expires.: When should a contractor renew the contractor's license bond? 19. A
qualifying RME for a construction firm must work at least 32 hours per week or 80% of the work
week.: The qualifying RME for a construction firm must work at least: 20. The Internal Revenue
Service: The federal Employer Identification Number (EIN) is issued by the: 21. Every employer of 11 or
more full or part time employees must keep written health and safety records for 5 years.: Every
employer of ______ or more full or part time employees must keep written health and safety records
for _______ years.
A. 1-3
B. 7-4
C. 10-3
1. Employment Development Department: An employer remits State disability taxes withheld from
an employees wages to what agency?
2. National Labor Relations Act of 1935: Which act establishes the rights of workers to organize into
unions and negotiate contracts?
3. It is not legal to ask prospective employees about arrest not leading to convictions.: A contractor
has had a problem with employees stealing tools and equipment from job sites. When conducting
job interviews, may the contractor ask prospective employees about their arrest records?
A. It is legal to ask prospective employees about arrests not leading to convictions.
B. It is not legal to ask prospective employees about arrests not leading to convictions.
C. It is legal for a private employer to ask about arrests not leading to convictions, but it would not be
legal for city or county agencies to ask about such arrests.
D. It is legal for a private employer to ask about arrests leading to convictions, but it would not be
legal for a federal, state, or local public agency to do so.
4. If it is a dispute of more than $25,000 it can be transferred to Superior Court.: Why would a
contractor have a case in Superior Court?
5. Car accident in which an employee steps onto a public road, gets hit by a car, and suffers a
concussion.: Which would not have to be reported to DOSH immediately or within 24 hours?
A. Death from a three-story fall.
B. Drunken crane operator hits a high-voltage power line
C. Car accident in which an employee steps onto a public road, gets hit by a car, and suffers
a concussion. D. Employee falls off forklift and suffers a sever back injury.
6. Yes. If the contractor has reason to believe that the subcontractor has made an error in preparing
his bid, the contractor should notify the subcontractor of the apparent error, but the contractor may
not disclose the amounts of the other bids.: A general contractor has obtained bids from several
subcontractors for a private project. He notices
that one bid is substantially lower than the rest. Is it ethical and a good business practice for this
contractor to inform the subcontractor that the bid is substantially lower than the bids of the other
subcontractors? 7. The 31st of January.: An employer must furnish an employee with a completed IRS
Form W-2 (Wage and Tax Statement) by:
8. Write a new contract and ask the owner to sign it.: After a job is completed, the owner decides to
have additional work done. How should the contractor proceed?
9. Notify the owner that the person or firm who sent the notice has improved the property.: The
purpose of a 20-day preliminary notice for private work is to?
, 10. Yes, if the contractor provides each employee with a wage deduction state ment semimonthly or
at the time of each wage payment.: Is it legal for a contractor to pay employees in cash?
11. Decline to bid the work.: You are bidding on a job with plans drawn by the owner. You notice a
code violation and bring it to the attention of the owner. The owner declines to remedy the code
violation and tells you not to worry. What should you do?
12. Add profit and overhead to labor and materials: On a time-and-materials job, you should:
13. Claim the damage on your general liability insurance policy.: Your employee sets a cabinet
wrong. The cabinet falls from the wall and damages the client's counter top. What should you do?
A. Claim the damage on your general liability insurance policy.
B. Require the employee to pay for the damage to the countertop.
C. Tell the client to claim the damaged counter top on his or her homeowner's
insurance policy. D. No action is required: The client must assume the risk of
damage.
14. The critical path method.: Of the following, which is best for determining the number of hours
required for different phases of a project and for making sure the job is on schedule?
A. Bar graph and chart
B. Cash analysis chart
C. Review plans
D. Critical path method
15. It is not legal for the contractor to require lie detector tests, but it would be legal for a federal,
state, or local public agency to require lie detector tests of their employees.: Is it legal for a contractor
to require employees to take a lie detector test?
16. The employee must apply for a SSN.: If a newly hired employee does not have a SSN, what
should be done?
17. As many times as necessary within 18 months.: How many times may you take the
contractors license exam before your original application is voided?
18. 30 days before it expires.: When should a contractor renew the contractor's license bond? 19. A
qualifying RME for a construction firm must work at least 32 hours per week or 80% of the work
week.: The qualifying RME for a construction firm must work at least: 20. The Internal Revenue
Service: The federal Employer Identification Number (EIN) is issued by the: 21. Every employer of 11 or
more full or part time employees must keep written health and safety records for 5 years.: Every
employer of ______ or more full or part time employees must keep written health and safety records
for _______ years.
A. 1-3
B. 7-4
C. 10-3
