CSLB CONTRACTOR'S LAW &
BUSINESS EXAM
An employer remits State disability taxes withheld from an employees wages to what
agency? - ANSEmployment Development Department
Which act establishes the rights of workers to organize into unions and negotiate contracts?
- ANSNational 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.
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. - ANSIt is not legal to ask
prospective employees about arrest not leading to convictions.
Why would a contractor have a case in Superior Court? - ANSIf 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 forklift and suffers a sever back injury. - ANSCar 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? - ANSYes. 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: - ANSThe 31st of January.
After a job is completed, the owner decides to have additional work done. How should the
contractor proceed? - ANSWrite a new contract and ask the owner to sign it.
The purpose of a 20-day preliminary notice for private work is to? - ANSNotify the owner that
the person or firm who sent the notice has improved the property.
Is it legal for a contractor to pay employees in cash? - ANSYes, 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? - ANSDecline to bid the work.
On a time-and-materials job, you should: - ANSAdd 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. - ANSClaim 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. Critical path method - ANSThe critical path method.
Is it legal for a contractor to require employees to take a lie detector test? - ANSIt 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? - ANSThe employee
must apply for a SSN.
How many times may you take the contractors license exam before your original application
is voided? - ANSAs many times as necessary within 18 months.
, When should a contractor renew the contractor's license bond? - ANS30 days before it
expires.
The qualifying RME for a construction firm must work at least: - ANSA qualifying RME for a
construction firm must work at least 32 hours per week or 80% of the work week.
The federal Employer Identification Number (EIN) is issued by the: - ANSThe Internal
Revenue Service
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
D. 11-5 - ANSEvery employer of 11 or more full or part time employees must keep written
health and safety records for 5 years.
After you have read the plans and specifications, what is the next important step in writing a
bid?
A. Talk to and select subs.
B. Walk the job.
C. Call about materials, price, and availability.
D. Talk to the crew leader about labor. - ANSWalk the job.
Once a budget is finalized, the:
A. Contractor should stick to the budget no matter what happens.
B. Contractor should do the best possible job of staying within the budget.
C. Budget should be revised each month.
D. Budget should be referred to only if the business has cashflow problems. - ANSThe
contractor should do the best possible job of staying within budget. `
Who must sign a joint control addendum to a home improvement contract? - ANSOwner,
contractor, and joint control officer.
When purchasing insurance, what is the best way to chose among different companies? -
ANSCost and Coverage
Sometimes contracts can prove to be too vague to interpret without disagreement between
owner and contractor. Which of the following steps would best prevent such problems?
A. Walk the job site with the owner.
B. Review the plans and specifications with the owner.
C. Show the owner the critical path schedule.
D. Include a payment schedule in the contract and review other details of the contract with
the owner. - ANSReview the plans and specifications with the owner.
BUSINESS EXAM
An employer remits State disability taxes withheld from an employees wages to what
agency? - ANSEmployment Development Department
Which act establishes the rights of workers to organize into unions and negotiate contracts?
- ANSNational 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.
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. - ANSIt is not legal to ask
prospective employees about arrest not leading to convictions.
Why would a contractor have a case in Superior Court? - ANSIf 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 forklift and suffers a sever back injury. - ANSCar 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? - ANSYes. 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: - ANSThe 31st of January.
After a job is completed, the owner decides to have additional work done. How should the
contractor proceed? - ANSWrite a new contract and ask the owner to sign it.
The purpose of a 20-day preliminary notice for private work is to? - ANSNotify the owner that
the person or firm who sent the notice has improved the property.
Is it legal for a contractor to pay employees in cash? - ANSYes, 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? - ANSDecline to bid the work.
On a time-and-materials job, you should: - ANSAdd 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. - ANSClaim 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. Critical path method - ANSThe critical path method.
Is it legal for a contractor to require employees to take a lie detector test? - ANSIt 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? - ANSThe employee
must apply for a SSN.
How many times may you take the contractors license exam before your original application
is voided? - ANSAs many times as necessary within 18 months.
, When should a contractor renew the contractor's license bond? - ANS30 days before it
expires.
The qualifying RME for a construction firm must work at least: - ANSA qualifying RME for a
construction firm must work at least 32 hours per week or 80% of the work week.
The federal Employer Identification Number (EIN) is issued by the: - ANSThe Internal
Revenue Service
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
D. 11-5 - ANSEvery employer of 11 or more full or part time employees must keep written
health and safety records for 5 years.
After you have read the plans and specifications, what is the next important step in writing a
bid?
A. Talk to and select subs.
B. Walk the job.
C. Call about materials, price, and availability.
D. Talk to the crew leader about labor. - ANSWalk the job.
Once a budget is finalized, the:
A. Contractor should stick to the budget no matter what happens.
B. Contractor should do the best possible job of staying within the budget.
C. Budget should be revised each month.
D. Budget should be referred to only if the business has cashflow problems. - ANSThe
contractor should do the best possible job of staying within budget. `
Who must sign a joint control addendum to a home improvement contract? - ANSOwner,
contractor, and joint control officer.
When purchasing insurance, what is the best way to chose among different companies? -
ANSCost and Coverage
Sometimes contracts can prove to be too vague to interpret without disagreement between
owner and contractor. Which of the following steps would best prevent such problems?
A. Walk the job site with the owner.
B. Review the plans and specifications with the owner.
C. Show the owner the critical path schedule.
D. Include a payment schedule in the contract and review other details of the contract with
the owner. - ANSReview the plans and specifications with the owner.
