CSLB CONTRACTOR'S LAW &
BUSINESS EXAM Questions and
Answers A+ Graded (2025)
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.
.
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.
,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.
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.
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 .- .CORRECT .ANSWER-The .critical .path .method.
Is .it .legal .for .a .contractor .to .require .employees .to .take .a .lie .detector .test? .-
.CORRECT .ANSWER-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.
If .a .newly .hired .employee .does .not .have .a .SSN, .what .should .be .done? .-
.CORRECT .ANSWER-The .employee .must .apply .for .a .SSN.
How .many .times .may .you .take .the .contractors .license .exam .before .your
.original .application .is .voided? .- .CORRECT .ANSWER-As .many .times .as
.necessary .within .18 .months.
When .should .a .contractor .renew .the .contractor's .license .bond? .- .CORRECT
.ANSWER-30 .days .before .it .expires.
The .qualifying .RME .for .a .construction .firm .must .work .at .least: .- .CORRECT
.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: .- .CORRECT
.ANSWER-The .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 .- .CORRECT .ANSWER-Every .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. .- .CORRECT .ANSWER-Walk .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.
BUSINESS EXAM Questions and
Answers A+ Graded (2025)
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.
.
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.
,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.
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.
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 .- .CORRECT .ANSWER-The .critical .path .method.
Is .it .legal .for .a .contractor .to .require .employees .to .take .a .lie .detector .test? .-
.CORRECT .ANSWER-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.
If .a .newly .hired .employee .does .not .have .a .SSN, .what .should .be .done? .-
.CORRECT .ANSWER-The .employee .must .apply .for .a .SSN.
How .many .times .may .you .take .the .contractors .license .exam .before .your
.original .application .is .voided? .- .CORRECT .ANSWER-As .many .times .as
.necessary .within .18 .months.
When .should .a .contractor .renew .the .contractor's .license .bond? .- .CORRECT
.ANSWER-30 .days .before .it .expires.
The .qualifying .RME .for .a .construction .firm .must .work .at .least: .- .CORRECT
.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: .- .CORRECT
.ANSWER-The .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 .- .CORRECT .ANSWER-Every .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. .- .CORRECT .ANSWER-Walk .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.
