CSLB CONTRACTOR'S LAW &
BUSINESS EXAM 2026 Questions and
Answers
An employer remits State disability taxes withheld from an employees wages to
what agency? - Correct answer-Employment Development Department
Which act establishes the rights of workers to organize into unions and negotiate
contracts? - Correct answer-National Labor Relations Act of 1935
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.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,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. - Correct
answer-It is not legal to ask prospective employees about arrest not leading to
convictions.
Why would a contractor have a case in Superior Court? - Correct answer-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.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,D. Employee falls off forklift and suffers a sever back injury. - Correct answer-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 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? - Correct answer-
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.
An employer must furnish an employee with a completed IRS Form W-2 (Wage
and Tax Statement) by: - Correct answer-The 31st of January.
After a job is completed, the owner decides to have additional work done. How
should the contractor proceed? - Correct answer-Write a new contract and ask the
owner to sign it.
The purpose of a 20-day preliminary notice for private work is to? - Correct
answer-Notify the owner that the person or firm who sent the notice has improved
the property.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, Is it legal for a contractor to pay employees in cash? - Correct answer-Yes, if the
contractor provides each employee with a wage deduction statement semimonthly
or at the time of each wage payment.
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? - Correct
answer-Decline to bid the work.
On a time-and-materials job, you should: - Correct answer-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 action is required: The client must assume the risk of damage. - Correct
answer-Claim the damage on your general liability insurance policy.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
BUSINESS EXAM 2026 Questions and
Answers
An employer remits State disability taxes withheld from an employees wages to
what agency? - Correct answer-Employment Development Department
Which act establishes the rights of workers to organize into unions and negotiate
contracts? - Correct answer-National Labor Relations Act of 1935
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.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,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. - Correct
answer-It is not legal to ask prospective employees about arrest not leading to
convictions.
Why would a contractor have a case in Superior Court? - Correct answer-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.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,D. Employee falls off forklift and suffers a sever back injury. - Correct answer-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 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? - Correct answer-
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.
An employer must furnish an employee with a completed IRS Form W-2 (Wage
and Tax Statement) by: - Correct answer-The 31st of January.
After a job is completed, the owner decides to have additional work done. How
should the contractor proceed? - Correct answer-Write a new contract and ask the
owner to sign it.
The purpose of a 20-day preliminary notice for private work is to? - Correct
answer-Notify the owner that the person or firm who sent the notice has improved
the property.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, Is it legal for a contractor to pay employees in cash? - Correct answer-Yes, if the
contractor provides each employee with a wage deduction statement semimonthly
or at the time of each wage payment.
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? - Correct
answer-Decline to bid the work.
On a time-and-materials job, you should: - Correct answer-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 action is required: The client must assume the risk of damage. - Correct
answer-Claim the damage on your general liability insurance policy.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
