5 CSLB CONTRACTOR'S LAW & BUSINESS
EXAM QUESTIONS AND ANSWERS 100% PASS
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 con
ducting 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 leg
al 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 concuss
ion.
,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 tha
t one bid is substantially lower than the rest. Is it ethical and a good business practice for this contract
or to inform the subcontractor that the bid is substantially lower than the bids of the other subcontracto
rs? - correct answer-
Yes. If the contractor has reason to believe that the subcontractor has made an error in preparing his bi
d, the contractor should notify the subcontractor of the apparent error, but the contractor may not discl
ose 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 p
roceed? - 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.
Is it legal forc ac contractorc toc payc employeesc inc cash?c -c correctc answer-
Yes,c ifc thec contractorc providesc eachc employeec withc ac wagec deductionc statementc semimonthlyc orc atc thec
t
imec ofc eachc wagec payment.
Youc arec biddingc onc ac jobc withc plansc drawnc byc thec owner.c Youc noticec ac codec violationc andc bringc itc toc
th
ec attentionc ofc thec owner.c Thec ownerc declinesc toc remedyc thec codec violationc andc tellsc youc notc toc worry.
Whatc shouldc youc do?c -c correctc answer-Declinec toc bidc thec work.
Onc ac time-and-materialsc job,c youc should:c -c correctc answer-
Addc profitc andc overheadc toc laborc andc materials
Yourc employeec setsc ac cabinetc wrong.c Thec cabinetc fallsc fromc thec wallc andc damagesc thec client'sc counterc
t
op.c Whatc shouldc youc do?
A.c Claimc thec damagec onc yourc generalc liabilityc insurancec policy.
,c
B.c Requirec thec employeec toc payc forc thec damagec toc thec countertop.
C.c Tellc thec clientc toc claimc thec damagedc counterc topc onc hisc orc herc homeowner'sc insurancec policy
.
D.c Noc actionc isc required:c Thec clientc mustc assumec thec riskc ofc damage.c -c correctc answer-
Claimc thec damagec onc yourc generalc liabilityc insurancec policy.
Ofc thec following,c whichc isc bestc forc determiningc thec numberc ofc hoursc requiredc forc differentc phasesc ofc
a
projectc andc forc makingc surec thec jobc isc onc schedule?
A.c Barc graphc andc chart
B.c Cashc analysisc chart
C.c Reviewc plans
D.c Criticalc pathc methodc -c correctc answer-Thec criticalc pathc method.
Isc itc legalc forc ac contractorc toc requirec employeesc toc takec ac liec detectorc test?c -c correctc answer-
Itc isc notc legalc forc thec contractorc toc requirec liec detectorc tests,c butc itc wouldc bec legalc forc ac federal,c state,c
or
localc publicc agencyc toc requirec liec detectorc testsc ofc theirc employees.
Ifc ac newlyc hiredc employeec doesc notc havec ac SSN,c whatc shouldc bec done?c -
c correctc answer-
Thec employeec mustc applyc forc ac SSN.
Howc manyc timesc mayc youc takec thec contractorsc licensec examc beforec yourc originalc applicationc isc voided
?- correctc answer-Asc manyc timesc asc necessaryc withinc 18c months.
Whenc shouldc ac contractorc renewc thec contractor'sc licensec bond?c -c correctc answer-
30c daysc beforec itc expires.
Thec qualifyingc RMEc forc ac constructionc firmc mustc workc atc least:c -c correctc answer-
Ac qualifyingc RMEc forc ac constructionc firmc mustc workc atc leastc 32c hoursc perc weekc orc 80%c ofc thec workc
w
eek.
Thec federalc Employerc Identificationc Numberc (EIN)c isc issuedc byc the:c -c correctc answer-
Thec Internalc Revenuec Service
,c
Everyc employerc ofc ______c orc morec fullc orc partc timec employeesc mustc keepc writtenc healthc andc safetyc re
c
ordsc forc _______c years.
A.c 1-3
B.c 7-4
C.c 10-3
D.c 11-5c -c correctc answer-
Everyc employerc ofc 11c orc morec fullc orc partc timec employeesc mustc keepc writtenc healthc andc safetyc record
s
forc 5c years.
Afterc youc havec readc thec plansc andc specifications,c whatc isc thec nextc importantc stepc inc writingc ac bid
?
A.c Talkc toc andc selectc subs.
B.c Walkc thec job.
C.c Callc aboutc materials,c price,c andc availability.
D.c Talkc toc thec crewc leaderc aboutc labor.c -c correctc answer-Walkc thec job.
Oncec ac budgetc isc finalized,c the:
A.c Contractorc shouldc stickc toc thec budgetc noc matterc whatc happens.
B.c Contractorc shouldc doc thec bestc possiblec jobc ofc stayingc withinc thec budget.
C.c Budgetc shouldc bec revisedc eachc month.
D.c Budgetc shouldc bec referredc toc onlyc ifc thec businessc hasc cashflowc problems.c -
c correctc answer-
Thec contractorc shouldc doc thec bestc possiblec jobc ofc stayingc withinc budget.c `
Whoc mustc signc ac jointc controlc addendumc toc ac homec improvementc contract?c -c correctc answer-
Owner,c contractor,c andc jointc controlc officer.
Whenc purchasingc insurance,c whatc isc thec bestc wayc toc chosec amongc differentc companies?c -
correctc answer-Costc andc Coverage
EXAM QUESTIONS AND ANSWERS 100% PASS
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 con
ducting 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 leg
al 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 concuss
ion.
,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 tha
t one bid is substantially lower than the rest. Is it ethical and a good business practice for this contract
or to inform the subcontractor that the bid is substantially lower than the bids of the other subcontracto
rs? - correct answer-
Yes. If the contractor has reason to believe that the subcontractor has made an error in preparing his bi
d, the contractor should notify the subcontractor of the apparent error, but the contractor may not discl
ose 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 p
roceed? - 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.
Is it legal forc ac contractorc toc payc employeesc inc cash?c -c correctc answer-
Yes,c ifc thec contractorc providesc eachc employeec withc ac wagec deductionc statementc semimonthlyc orc atc thec
t
imec ofc eachc wagec payment.
Youc arec biddingc onc ac jobc withc plansc drawnc byc thec owner.c Youc noticec ac codec violationc andc bringc itc toc
th
ec attentionc ofc thec owner.c Thec ownerc declinesc toc remedyc thec codec violationc andc tellsc youc notc toc worry.
Whatc shouldc youc do?c -c correctc answer-Declinec toc bidc thec work.
Onc ac time-and-materialsc job,c youc should:c -c correctc answer-
Addc profitc andc overheadc toc laborc andc materials
Yourc employeec setsc ac cabinetc wrong.c Thec cabinetc fallsc fromc thec wallc andc damagesc thec client'sc counterc
t
op.c Whatc shouldc youc do?
A.c Claimc thec damagec onc yourc generalc liabilityc insurancec policy.
,c
B.c Requirec thec employeec toc payc forc thec damagec toc thec countertop.
C.c Tellc thec clientc toc claimc thec damagedc counterc topc onc hisc orc herc homeowner'sc insurancec policy
.
D.c Noc actionc isc required:c Thec clientc mustc assumec thec riskc ofc damage.c -c correctc answer-
Claimc thec damagec onc yourc generalc liabilityc insurancec policy.
Ofc thec following,c whichc isc bestc forc determiningc thec numberc ofc hoursc requiredc forc differentc phasesc ofc
a
projectc andc forc makingc surec thec jobc isc onc schedule?
A.c Barc graphc andc chart
B.c Cashc analysisc chart
C.c Reviewc plans
D.c Criticalc pathc methodc -c correctc answer-Thec criticalc pathc method.
Isc itc legalc forc ac contractorc toc requirec employeesc toc takec ac liec detectorc test?c -c correctc answer-
Itc isc notc legalc forc thec contractorc toc requirec liec detectorc tests,c butc itc wouldc bec legalc forc ac federal,c state,c
or
localc publicc agencyc toc requirec liec detectorc testsc ofc theirc employees.
Ifc ac newlyc hiredc employeec doesc notc havec ac SSN,c whatc shouldc bec done?c -
c correctc answer-
Thec employeec mustc applyc forc ac SSN.
Howc manyc timesc mayc youc takec thec contractorsc licensec examc beforec yourc originalc applicationc isc voided
?- correctc answer-Asc manyc timesc asc necessaryc withinc 18c months.
Whenc shouldc ac contractorc renewc thec contractor'sc licensec bond?c -c correctc answer-
30c daysc beforec itc expires.
Thec qualifyingc RMEc forc ac constructionc firmc mustc workc atc least:c -c correctc answer-
Ac qualifyingc RMEc forc ac constructionc firmc mustc workc atc leastc 32c hoursc perc weekc orc 80%c ofc thec workc
w
eek.
Thec federalc Employerc Identificationc Numberc (EIN)c isc issuedc byc the:c -c correctc answer-
Thec Internalc Revenuec Service
,c
Everyc employerc ofc ______c orc morec fullc orc partc timec employeesc mustc keepc writtenc healthc andc safetyc re
c
ordsc forc _______c years.
A.c 1-3
B.c 7-4
C.c 10-3
D.c 11-5c -c correctc answer-
Everyc employerc ofc 11c orc morec fullc orc partc timec employeesc mustc keepc writtenc healthc andc safetyc record
s
forc 5c years.
Afterc youc havec readc thec plansc andc specifications,c whatc isc thec nextc importantc stepc inc writingc ac bid
?
A.c Talkc toc andc selectc subs.
B.c Walkc thec job.
C.c Callc aboutc materials,c price,c andc availability.
D.c Talkc toc thec crewc leaderc aboutc labor.c -c correctc answer-Walkc thec job.
Oncec ac budgetc isc finalized,c the:
A.c Contractorc shouldc stickc toc thec budgetc noc matterc whatc happens.
B.c Contractorc shouldc doc thec bestc possiblec jobc ofc stayingc withinc thec budget.
C.c Budgetc shouldc bec revisedc eachc month.
D.c Budgetc shouldc bec referredc toc onlyc ifc thec businessc hasc cashflowc problems.c -
c correctc answer-
Thec contractorc shouldc doc thec bestc possiblec jobc ofc stayingc withinc budget.c `
Whoc mustc signc ac jointc controlc addendumc toc ac homec improvementc contract?c -c correctc answer-
Owner,c contractor,c andc jointc controlc officer.
Whenc purchasingc insurance,c whatc isc thec bestc wayc toc chosec amongc differentc companies?c -
correctc answer-Costc andc Coverage
