CSLB CONTRACTOR'S LAW &
BUSINESS EXAM 2024/2025
UPDATE
An employer remits State disability taxes withheld from an employees wages to
what agency?
Employment Development Department
Which act establishes the rights of workers to organize into unions and
nego@ate contracts?
Na@onal Labor Rela@ons Act of 1935
A contractor has had a problem with employees stealing tools and equipment
from job sites. When conduc@ng job interviews, may the contractor ask
prospec@ve employees about their arrest records?
A. It is legal to ask prospec@ve employees about arrests not leading to
convic@ons.
B. It is not legal to ask prospec@ve employees about arrests not leading to
convic@ons.
C. It is legal for a private employer to ask about arrests not leading to
convic@ons, 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 convic@ons,
but it would not be legal for a federal, state, or local public agency to do so.
,It is not legal to ask prospec@ve employees about arrest not leading to
convic@ons.
Why would a contractor have a case in Superior Court?
If it is a dispute of more than $25,000 it can be transferred to Superior Court.
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 forkliW and suffers a sever back injury.
Car accident in which an employee steps onto a public road, gets hit by a car,
and suffers a concussion.
A general contractor has obtained bids from several subcontractors for a
private project. He no@ces that one bid is substan@ally lower than the rest. Is it
ethical and a good business prac@ce for this contractor to inform the
subcontractor that the bid is substan@ally lower than the bids of the other
subcontractors?
Yes. If the contractor has reason to believe that the subcontractor has made an
error in preparing his bid, the contractor should no@fy the subcontractor of the
apparent error, but the contractor may not disclose the amounts of the other
bids.
An employer must furnish an employee with a completed IRS Form W-2 (Wage
and Tax Statement) by:
The 31st of January.
,AWer a job is completed, the owner decides to have addi@onal work done. How
should the contractor proceed?
Write a new contract and ask the owner to sign it.
The purpose of a 20-day preliminary no@ce for private work is to?
No@fy the owner that the person or firm who sent the no@ce has improved the
property.
Is it legal for a contractor to pay employees in cash?
Yes, if the contractor provides each employee with a wage deduc@on
statement semimonthly or at the @me of each wage payment.
You are bidding on a job with plans drawn by the owner. You no@ce a code
viola@on and bring it to the a`en@on of the owner. The owner declines to
remedy the code viola@on and tells you not to worry. What should you do?
Decline to bid the work.
On a @me-and-materials job, you should:
Add profit and overhead to labor and materials
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 ac@on is required: The client must assume the risk of damage.
Claim the damage on your general liability insurance policy.
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. Cri@cal path method
The cri@cal path method.
Is it legal for a contractor to require employees to take a lie detector test?
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.
If a newly hired employee does not have a SSN, what should be done?
The employee must apply for a SSN.
How many @mes may you take the contractors license exam before your
original applica@on is voided?
As many @mes as necessary within 18 months.
When should a contractor renew the contractor's license bond?
30 days before it expires.
The qualifying RME for a construc@on firm must work at least:
A qualifying RME for a construc@on firm must work at least 32 hours per week
or 80% of the work week.
The federal Employer Iden@fica@on Number (EIN) is issued by the:
The Internal Revenue Service
Every employer of ______ or more full or part @me employees must keep
wri`en health and safety records for _______ years.
A. 1-3
B. 7-4
BUSINESS EXAM 2024/2025
UPDATE
An employer remits State disability taxes withheld from an employees wages to
what agency?
Employment Development Department
Which act establishes the rights of workers to organize into unions and
nego@ate contracts?
Na@onal Labor Rela@ons Act of 1935
A contractor has had a problem with employees stealing tools and equipment
from job sites. When conduc@ng job interviews, may the contractor ask
prospec@ve employees about their arrest records?
A. It is legal to ask prospec@ve employees about arrests not leading to
convic@ons.
B. It is not legal to ask prospec@ve employees about arrests not leading to
convic@ons.
C. It is legal for a private employer to ask about arrests not leading to
convic@ons, 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 convic@ons,
but it would not be legal for a federal, state, or local public agency to do so.
,It is not legal to ask prospec@ve employees about arrest not leading to
convic@ons.
Why would a contractor have a case in Superior Court?
If it is a dispute of more than $25,000 it can be transferred to Superior Court.
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 forkliW and suffers a sever back injury.
Car accident in which an employee steps onto a public road, gets hit by a car,
and suffers a concussion.
A general contractor has obtained bids from several subcontractors for a
private project. He no@ces that one bid is substan@ally lower than the rest. Is it
ethical and a good business prac@ce for this contractor to inform the
subcontractor that the bid is substan@ally lower than the bids of the other
subcontractors?
Yes. If the contractor has reason to believe that the subcontractor has made an
error in preparing his bid, the contractor should no@fy the subcontractor of the
apparent error, but the contractor may not disclose the amounts of the other
bids.
An employer must furnish an employee with a completed IRS Form W-2 (Wage
and Tax Statement) by:
The 31st of January.
,AWer a job is completed, the owner decides to have addi@onal work done. How
should the contractor proceed?
Write a new contract and ask the owner to sign it.
The purpose of a 20-day preliminary no@ce for private work is to?
No@fy the owner that the person or firm who sent the no@ce has improved the
property.
Is it legal for a contractor to pay employees in cash?
Yes, if the contractor provides each employee with a wage deduc@on
statement semimonthly or at the @me of each wage payment.
You are bidding on a job with plans drawn by the owner. You no@ce a code
viola@on and bring it to the a`en@on of the owner. The owner declines to
remedy the code viola@on and tells you not to worry. What should you do?
Decline to bid the work.
On a @me-and-materials job, you should:
Add profit and overhead to labor and materials
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 ac@on is required: The client must assume the risk of damage.
Claim the damage on your general liability insurance policy.
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. Cri@cal path method
The cri@cal path method.
Is it legal for a contractor to require employees to take a lie detector test?
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.
If a newly hired employee does not have a SSN, what should be done?
The employee must apply for a SSN.
How many @mes may you take the contractors license exam before your
original applica@on is voided?
As many @mes as necessary within 18 months.
When should a contractor renew the contractor's license bond?
30 days before it expires.
The qualifying RME for a construc@on firm must work at least:
A qualifying RME for a construc@on firm must work at least 32 hours per week
or 80% of the work week.
The federal Employer Iden@fica@on Number (EIN) is issued by the:
The Internal Revenue Service
Every employer of ______ or more full or part @me employees must keep
wri`en health and safety records for _______ years.
A. 1-3
B. 7-4
