CSLB CONTRACTOR'S LAW &
BUSINESS EXAM Questions and
100% CORRECT ANSWERS
A
2024/2025
VI
TU
An employer remits State disability taxes withheld from an employees wages to what
IS
agency? - ANSWER Employment Development Department
Which act establishes the rights of workers to organize into unions and negotiate
M
contracts? - ANSWER National Labor Relations Act of 1935
A contractor has had a problem with employees stealing tools and equipment from job
O
sites. When conducting job interviews, may the contractor ask prospective employees
about their arrest records?
A
A. It is legal to ask prospective employees about arrests not leading to convictions.
N
B. It is not legal to ask prospective employees about arrests not leading to convictions.
JP
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. - 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? - 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.
D. Employee falls off forklift and suffers a sever back injury. - ANSWER Car accident
in which an employee steps onto a public road, gets hit by a car, and suffers a
A
concussion.
VI
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
TU
substantially lower than the bids of the other subcontractors? - 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.
IS
An employer must furnish an employee with a completed IRS Form W-2 (Wage and Tax
Statement) by: - ANSWER The 31st of January.
M
After a job is completed, the owner decides to have additional work done. How should
the contractor proceed? - ANSWER Write a new contract and ask the owner to sign
O
it.
The purpose of a 20-day preliminary notice for private work is to? - ANSWER Notify
A
the owner that the person or firm who sent the notice has improved the property.
N
Is it legal for a contractor to pay employees in cash? - ANSWER Yes, if the
contractor provides each employee with a wage deduction statement semimonthly or at
JP
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? - ANSWER Decline to bid the work.
On a time-and-materials job, you should: - 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. - ANSWER
Claim the damage on your general liability insurance policy.
A
Of the following, which is best for determining the number of hours required for different
VI
phases of a project and for making sure the job is on schedule?
A. Bar graph and chart
TU
B. Cash analysis chart
C. Review plans
D. Critical path method - ANSWER The critical path method.
Is it legal for a contractor to require employees to take a lie detector test? - ANSWER
IS
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.
M
If a newly hired employee does not have a SSN, what should be done? - ANSWER
The employee must apply for a SSN.
O
How many times may you take the contractors license exam before your original
application is voided? - ANSWER As many times as necessary within 18 months.
A
When should a contractor renew the contractor's license bond? - ANSWER 30 days
N
before it expires.
JP
The qualifying RME for a construction firm must work at least: - ANSWER A
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: - ANSWER The
Internal Revenue Service
Every employer of ______ or more full or part time employees must keep written health
and safety records for _______ years.
BUSINESS EXAM Questions and
100% CORRECT ANSWERS
A
2024/2025
VI
TU
An employer remits State disability taxes withheld from an employees wages to what
IS
agency? - ANSWER Employment Development Department
Which act establishes the rights of workers to organize into unions and negotiate
M
contracts? - ANSWER National Labor Relations Act of 1935
A contractor has had a problem with employees stealing tools and equipment from job
O
sites. When conducting job interviews, may the contractor ask prospective employees
about their arrest records?
A
A. It is legal to ask prospective employees about arrests not leading to convictions.
N
B. It is not legal to ask prospective employees about arrests not leading to convictions.
JP
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. - 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? - 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.
D. Employee falls off forklift and suffers a sever back injury. - ANSWER Car accident
in which an employee steps onto a public road, gets hit by a car, and suffers a
A
concussion.
VI
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
TU
substantially lower than the bids of the other subcontractors? - 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.
IS
An employer must furnish an employee with a completed IRS Form W-2 (Wage and Tax
Statement) by: - ANSWER The 31st of January.
M
After a job is completed, the owner decides to have additional work done. How should
the contractor proceed? - ANSWER Write a new contract and ask the owner to sign
O
it.
The purpose of a 20-day preliminary notice for private work is to? - ANSWER Notify
A
the owner that the person or firm who sent the notice has improved the property.
N
Is it legal for a contractor to pay employees in cash? - ANSWER Yes, if the
contractor provides each employee with a wage deduction statement semimonthly or at
JP
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? - ANSWER Decline to bid the work.
On a time-and-materials job, you should: - 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. - ANSWER
Claim the damage on your general liability insurance policy.
A
Of the following, which is best for determining the number of hours required for different
VI
phases of a project and for making sure the job is on schedule?
A. Bar graph and chart
TU
B. Cash analysis chart
C. Review plans
D. Critical path method - ANSWER The critical path method.
Is it legal for a contractor to require employees to take a lie detector test? - ANSWER
IS
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.
M
If a newly hired employee does not have a SSN, what should be done? - ANSWER
The employee must apply for a SSN.
O
How many times may you take the contractors license exam before your original
application is voided? - ANSWER As many times as necessary within 18 months.
A
When should a contractor renew the contractor's license bond? - ANSWER 30 days
N
before it expires.
JP
The qualifying RME for a construction firm must work at least: - ANSWER A
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: - ANSWER The
Internal Revenue Service
Every employer of ______ or more full or part time employees must keep written health
and safety records for _______ years.
