CSLB CONTRACTOR'S LAW & BUSINESS EXAM (2025/2026) ACTUAL
CSLB CONTRACTOR'S LAW & BUSINESS EXAM
EXAM COMPREHENSIVE
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QUESTIONS AND VERIFIED ACCURATE
SOLUTION
1. An employer remits State disability taxes withheld Employment Develop-
from an employees wages to what agency? ment Department
2. Which act establishes the rights of workers to orga- National Labor Relations
nize into unions and negotiate contracts? Act of 1935
3. A contractor has had a problem with employees It is not legal to
stealing tools and equipment from job sites. When ask prospective employ-
conducting job interviews, may the contractor ask ees about arrest not lead-
prospective employees about their arrest records? ing to convictions.
A. It is legal to ask prospective employees about ar-
rests 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.
4. 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.
5. Which would not have to be reported to DOSH imme- Car accident in which an
diately or within 24 hours? employee steps onto a
, CSLB CONTRACTOR'S LAW & BUSINESS EXAM
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A. Death from a three-story fall. public road, gets hit by a
B. Drunken crane operator hits a high-voltage power car, and suffers a concus-
line sion.
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.
6. A general contractor has obtained bids from several Yes. If the contractor has
subcontractors for a private project. He notices that reason to believe that the
one bid is substantially lower than the rest. Is it ethical subcontractor has made
and a good business practice for this contractor to an error in preparing his
inform the subcontractor that the bid is substantially bid, the contractor should
lower than the bids of the other subcontractors? notify the subcontractor of
the apparent error, but the
contractor may not dis-
close the amounts of the
other bids.
7. An employer must furnish an employee with a com- The 31st of January.
pleted IRS Form W-2 (Wage and Tax Statement) by:
8. After a job is completed, the owner decides to have Write a new contract and
additional work done. How should the contractor pro- ask the owner to sign it.
ceed?
9. The purpose of a 20-day preliminary notice for private Notify the owner that the
work is to? person or firm who sent
the notice has improved
the property.
10. Is it legal for a contractor to pay employees in cash? Yes, if the contractor pro-
vides each employee with
, CSLB CONTRACTOR'S LAW & BUSINESS EXAM
Study online at https://quizlet.com/_hfpifn
a wage deduction state-
ment semimonthly or at
the time of each wage
payment.
11. You are bidding on a job with plans drawn by the Decline to bid the work.
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?
12. On a time-and-materials job, you should: Add profit and overhead
to labor and materials
13. Your employee sets a cabinet wrong. The cabinet falls Claim the damage on your
from the wall and damages the client's counter top. general liability insurance
What should you do? policy.
A. Claim the damage on your general liability insur-
ance 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.
14. Of the following, which is best for determining the The critical path method.
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
, CSLB CONTRACTOR'S LAW & BUSINESS EXAM
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C. Review plans
D. Critical path method
15. Is it legal for a contractor to require employees to take It is not legal for the con-
a lie detector test? tractor to require lie de-
tector tests, but it would
be legal for a feder-
al, state, or local public
agency to require lie de-
tector tests of their em-
ployees.
16. If a newly hired employee does not have a SSN, what The employee must apply
should be done? for a SSN.
17. How many times may you take the contractors license As many times as neces-
exam before your original application is voided? sary within 18 months.
18. When should a contractor renew the contractor's li- 30 days before it expires.
cense bond?
19. The qualifying RME for a construction firm must work A qualifying RME for a
at least: construction firm must
work at least 32 hours per
week or 80% of the work
week.
20. The federal Employer Identification Number (EIN) is The Internal Revenue Ser-
issued by the: vice
21. Every employer of ______ or more full or part time em- Every employer of 11 or
ployees must keep written health and safety records more full or part time em-
for _______ years. ployees must keep written
CSLB CONTRACTOR'S LAW & BUSINESS EXAM
EXAM COMPREHENSIVE
Study online at https://quizlet.com/_hfpifn
QUESTIONS AND VERIFIED ACCURATE
SOLUTION
1. An employer remits State disability taxes withheld Employment Develop-
from an employees wages to what agency? ment Department
2. Which act establishes the rights of workers to orga- National Labor Relations
nize into unions and negotiate contracts? Act of 1935
3. A contractor has had a problem with employees It is not legal to
stealing tools and equipment from job sites. When ask prospective employ-
conducting job interviews, may the contractor ask ees about arrest not lead-
prospective employees about their arrest records? ing to convictions.
A. It is legal to ask prospective employees about ar-
rests 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.
4. 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.
5. Which would not have to be reported to DOSH imme- Car accident in which an
diately or within 24 hours? employee steps onto a
, CSLB CONTRACTOR'S LAW & BUSINESS EXAM
Study online at https://quizlet.com/_hfpifn
A. Death from a three-story fall. public road, gets hit by a
B. Drunken crane operator hits a high-voltage power car, and suffers a concus-
line sion.
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.
6. A general contractor has obtained bids from several Yes. If the contractor has
subcontractors for a private project. He notices that reason to believe that the
one bid is substantially lower than the rest. Is it ethical subcontractor has made
and a good business practice for this contractor to an error in preparing his
inform the subcontractor that the bid is substantially bid, the contractor should
lower than the bids of the other subcontractors? notify the subcontractor of
the apparent error, but the
contractor may not dis-
close the amounts of the
other bids.
7. An employer must furnish an employee with a com- The 31st of January.
pleted IRS Form W-2 (Wage and Tax Statement) by:
8. After a job is completed, the owner decides to have Write a new contract and
additional work done. How should the contractor pro- ask the owner to sign it.
ceed?
9. The purpose of a 20-day preliminary notice for private Notify the owner that the
work is to? person or firm who sent
the notice has improved
the property.
10. Is it legal for a contractor to pay employees in cash? Yes, if the contractor pro-
vides each employee with
, CSLB CONTRACTOR'S LAW & BUSINESS EXAM
Study online at https://quizlet.com/_hfpifn
a wage deduction state-
ment semimonthly or at
the time of each wage
payment.
11. You are bidding on a job with plans drawn by the Decline to bid the work.
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?
12. On a time-and-materials job, you should: Add profit and overhead
to labor and materials
13. Your employee sets a cabinet wrong. The cabinet falls Claim the damage on your
from the wall and damages the client's counter top. general liability insurance
What should you do? policy.
A. Claim the damage on your general liability insur-
ance 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.
14. Of the following, which is best for determining the The critical path method.
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
, CSLB CONTRACTOR'S LAW & BUSINESS EXAM
Study online at https://quizlet.com/_hfpifn
C. Review plans
D. Critical path method
15. Is it legal for a contractor to require employees to take It is not legal for the con-
a lie detector test? tractor to require lie de-
tector tests, but it would
be legal for a feder-
al, state, or local public
agency to require lie de-
tector tests of their em-
ployees.
16. If a newly hired employee does not have a SSN, what The employee must apply
should be done? for a SSN.
17. How many times may you take the contractors license As many times as neces-
exam before your original application is voided? sary within 18 months.
18. When should a contractor renew the contractor's li- 30 days before it expires.
cense bond?
19. The qualifying RME for a construction firm must work A qualifying RME for a
at least: construction firm must
work at least 32 hours per
week or 80% of the work
week.
20. The federal Employer Identification Number (EIN) is The Internal Revenue Ser-
issued by the: vice
21. Every employer of ______ or more full or part time em- Every employer of 11 or
ployees must keep written health and safety records more full or part time em-
for _______ years. ployees must keep written
