Page | 1
CSLB CONTRACTOR'S LAW &
BUSINESS EXAM 2026 QUESTIONS
AND ANSWERS | A+ GRADED | WITH
EXPERT SOLUTIONS
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.
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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.
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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.
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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.
CSLB CONTRACTOR'S LAW &
BUSINESS EXAM 2026 QUESTIONS
AND ANSWERS | A+ GRADED | WITH
EXPERT SOLUTIONS
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.
, Page | 2
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.
, Page | 3
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.
, Page | 4
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.
