CSLB CONTRACTOR'S LAW &
BUSINESS EXAM QUESTIONS AND
ANSWERS
AnvgemployervgremitsvgStatevgdisabilityvgtaxesvgwithheldvgfromvganvgemployeesvgwagesvgt
ovgwhatvgagency?vg-vganswer--EmploymentvgDevelopmentvgDepartment
Whichvgactvgestablishesvgthevgrightsvgofvgworkersvgtovgorganizevgintovgunionsvgandvgnegoti
atevgcontracts?vg-vganswer--NationalvgLaborvgRelationsvgActvgofvg1935
Avgcontractorvghasvghadvgavgproblemvgwithvgemployeesvgstealingvgtoolsvgandvgequipmentvg
fromvgjobvgsites.vgWhenvgconductingvgjobvginterviews,vgmayvgthevgcontractorvgaskvgprospe
ctivevgemployeesvgaboutvgtheirvgarrestvgrecords?vg
vg
A.vgItvgisvglegalvgtovgaskvgprospectivevgemployeesvgaboutvgarrestsvgnotvgleadingvgtovgconvic
tions.
vg
B.vgItvgisvgnotvglegalvgtovgaskvgprospectivevgemployeesvgaboutvgarrestsvgnotvgleadingvgtovgco
nvictions.
vg
C.vgItvgisvglegalvgforvgavgprivatevgemployervgtovgaskvgaboutvgarrestsvgnotvgleadingvgtovgconvic
tions,vgbutvgitvgwouldvgnotvgbevglegalvgforvgcityvgorvgcountyvgagenciesvgtovgaskvgaboutvgsuchvg
arrests.
vg
D.vgItvgisvglegalvgforvgavgprivatevgemployervgtovgaskvgaboutvgarrestsvgleadingvgtovgconvictions
,vgbutvgitvgwouldvgnotvgbevglegalvgforvgavgfederal,vgstate,vgorvglocalvgpublicvgagencyvgtovgdovgs
o.vg-vganswer--
Itvgisvgnotvglegalvgtovgaskvgprospectivevgemployeesvgaboutvgarrestvgnotvgleadingvgtovgconvic
tions.
WhyvgwouldvgavgcontractorvghavevgavgcasevginvgSuperiorvgCourt?vg-vganswer--
Ifvgitvgisvgavgdisputevgofvgmorevgthanvg$25,000vgitvgcanvgbevgtransferredvgtovgSuperiorvgCourt.
WhichvgwouldvgnotvghavevgtovgbevgreportedvgtovgDOSHvgimmediatelyvgorvgwithinvg24vghour
s?
A.vgDeathvgfromvgavgthree-storyvgfall.
B.vgDrunkenvgcranevgoperatorvghitsvgavghigh-voltagevgpowervgline
C.vgCarvgaccidentvginvgwhichvganvgemployeevgstepsvgontovgavgpublicvgroad,vggetsvghitvgbyvga
vgcar,vgandvgsuffersvgavgconcussion.
D.vgEmployeevgfallsvgoffvgforkliftvgandvgsuffersvgavgsevervgbackvginjury.vg-vganswer--
Carvgaccidentvginvgwhichvganvgemployeevgstepsvgontovgavgpublicvgroad,vggetsvghitvgbyvgavgca
r,vgandvgsuffersvgavgconcussion.
Avggeneralvgcontractorvghasvgobtainedvgbidsvgfromvgseveralvgsubcontractorsvgforvgavgprivat
evgproject.vgHevgnoticesvgthatvgonevgbidvgisvgsubstantiallyvglowervgthanvgthevgrest.vgIsvgitvgeth
,icalvgandvgavggoodvgbusinessvgpracticevgforvgthisvgcontractorvgtovginformvgthevgsubcontract
orvgthatvgthevgbidvgisvgsubstantiallyvglowervgthanvgthevgbidsvgofvgthevgothervgsubcontractors?
vg-vganswer--
Yes.vgIfvgthevgcontractorvghasvgreasonvgtovgbelievevgthatvgthevgsubcontractorvghasvgmadevg
anvgerrorvginvgpreparingvghisvgbid,vgthevgcontractorvgshouldvgnotifyvgthevgsubcontractorvgofvg
thevgapparentvgerror,vgbutvgthevgcontractorvgmayvgnotvgdisclosevgthevgamountsvgofvgthevgoth
ervgbids.
AnvgemployervgmustvgfurnishvganvgemployeevgwithvgavgcompletedvgIRSvgFormvgW-
2vg(WagevgandvgTaxvgStatement)vgby:vg-vganswer--Thevg31stvgofvgJanuary.
Aftervgavgjobvgisvgcompleted,vgthevgownervgdecidesvgtovghavevgadditionalvgworkvgdone.vgHo
wvgshouldvgthevgcontractorvgproceed?vg-vganswer--
Writevgavgnewvgcontractvgandvgaskvgthevgownervgtovgsignvgit.
Thevgpurposevgofvgavg20-dayvgpreliminaryvgnoticevgforvgprivatevgworkvgisvgto?vg-vganswer--
Notifyvgthevgownervgthatvgthevgpersonvgorvgfirmvgwhovgsentvgthevgnoticevghasvgimprovedvgth
evgproperty.
Isvgitvglegalvgforvgavgcontractorvgtovgpayvgemployeesvginvgcash?vg-vganswer--
Yes,vgifvgthevgcontractorvgprovidesvgeachvgemployeevgwithvgavgwagevgdeductionvgstateme
ntvgsemimonthlyvgorvgatvgthevgtimevgofvgeachvgwagevgpayment.
Youvgarevgbiddingvgonvgavgjobvgwithvgplansvgdrawnvgbyvgthevgowner.vgYouvgnoticevgavgcodevg
violationvgandvgbringvgitvgtovgthevgattentionvgofvgthevgowner.vgThevgownervgdeclinesvgtovgrem
edyvgthevgcodevgviolationvgandvgtellsvgyouvgnotvgtovgworry.vgWhatvgshouldvgyouvgdo?vg-
vganswer--Declinevgtovgbidvgthevgwork.
Onvgavgtime-and-materialsvgjob,vgyouvgshould:vg-vganswer--
Addvgprofitvgandvgoverheadvgtovglaborvgandvgmaterials
Yourvgemployeevgsetsvgavgcabinetvgwrong.vgThevgcabinetvgfallsvgfromvgthevgwallvgandvgdam
agesvgthevgclient'svgcountervgtop.vgWhatvgshouldvgyouvgdo?
A.vgClaimvgthevgdamagevgonvgyourvggeneralvgliabilityvginsurancevgpolicy.
B.vgRequirevgthevgemployeevgtovgpayvgforvgthevgdamagevgtovgthevgcountertop.
C.vgTellvgthevgclientvgtovgclaimvgthevgdamagedvgcountervgtopvgonvghisvgorvghervghomeowner'
svginsurancevgpolicy.
D.vgNovgactionvgisvgrequired:vgThevgclientvgmustvgassumevgthevgriskvgofvgdamage.vg-
vganswer--Claimvgthevgdamagevgonvgyourvggeneralvgliabilityvginsurancevgpolicy.
Ofvgthevgfollowing,vgwhichvgisvgbestvgforvgdeterminingvgthevgnumbervgofvghoursvgrequiredvgf
orvgdifferentvgphasesvgofvgavgprojectvgandvgforvgmakingvgsurevgthevgjobvgisvgonvgschedule?
A.vgBarvggraphvgandvgchart
B.vgCashvganalysisvgchart
C.vgReviewvgplans
D.vgCriticalvgpathvgmethodvg-vganswer--Thevgcriticalvgpathvgmethod.
, Isvgitvglegalvgforvgavgcontractorvgtovgrequirevgemployeesvgtovgtakevgavglievgdetectorvgtest?vg-
vganswer--
Itvgisvgnotvglegalvgforvgthevgcontractorvgtovgrequirevglievgdetectorvgtests,vgbutvgitvgwouldvgbevgle
galvgforvgavgfederal,vgstate,vgorvglocalvgpublicvgagencyvgtovgrequirevglievgdetectorvgtestsvgofvgt
heirvgemployees.
IfvgavgnewlyvghiredvgemployeevgdoesvgnotvghavevgavgSSN,vgwhatvgshouldvgbevgdone?vg-
vganswer--ThevgemployeevgmustvgapplyvgforvgavgSSN.
Howvgmanyvgtimesvgmayvgyouvgtakevgthevgcontractorsvglicensevgexamvgbeforevgyourvgorigi
nalvgapplicationvgisvgvoided?vg-vganswer--
Asvgmanyvgtimesvgasvgnecessaryvgwithinvg18vgmonths.
Whenvgshouldvgavgcontractorvgrenewvgthevgcontractor'svglicensevgbond?vg-vganswer--
30vgdaysvgbeforevgitvgexpires.
ThevgqualifyingvgRMEvgforvgavgconstructionvgfirmvgmustvgworkvgatvgleast:vg-vganswer--
AvgqualifyingvgRMEvgforvgavgconstructionvgfirmvgmustvgworkvgatvgleastvg32vghoursvgpervgwee
kvgorvg80%vgofvgthevgworkvgweek.
ThevgfederalvgEmployervgIdentificationvgNumbervg(EIN)vgisvgissuedvgbyvgthe:vg-vganswer--
ThevgInternalvgRevenuevgService
Everyvgemployervgofvg______vgorvgmorevgfullvgorvgpartvgtimevgemployeesvgmustvgkeepvgwrit
tenvghealthvgandvgsafetyvgrecordsvgforvg_______vgyears.
A.vg1-3
B.vg7-4
C.vg10-3
D.vg11-5vg-vganswer--
Everyvgemployervgofvg11vgorvgmorevgfullvgorvgpartvgtimevgemployeesvgmustvgkeepvgwrittenvg
healthvgandvgsafetyvgrecordsvgforvg5vgyears.
Aftervgyouvghavevgreadvgthevgplansvgandvgspecifications,vgwhatvgisvgthevgnextvgimportantvgst
epvginvgwritingvgavgbid?
A.vgTalkvgtovgandvgselectvgsubs.
B.vgWalkvgthevgjob.
C.vgCallvgaboutvgmaterials,vgprice,vgandvgavailability.
D.vgTalkvgtovgthevgcrewvgleadervgaboutvglabor.vg-vganswer--Walkvgthevgjob.
Oncevgavgbudgetvgisvgfinalized,vgthe:
A.vgContractorvgshouldvgstickvgtovgthevgbudgetvgnovgmattervgwhatvghappens.
B.vgContractorvgshouldvgdovgthevgbestvgpossiblevgjobvgofvgstayingvgwithinvgthevgbudget.
C.vgBudgetvgshouldvgbevgrevisedvgeachvgmonth.
D.vgBudgetvgshouldvgbevgreferredvgtovgonlyvgifvgthevgbusinessvghasvgcashflowvgproblems.vg-
vganswer--
Thevgcontractorvgshouldvgdovgthevgbestvgpossiblevgjobvgofvgstayingvgwithinvgbudget.vg`
BUSINESS EXAM QUESTIONS AND
ANSWERS
AnvgemployervgremitsvgStatevgdisabilityvgtaxesvgwithheldvgfromvganvgemployeesvgwagesvgt
ovgwhatvgagency?vg-vganswer--EmploymentvgDevelopmentvgDepartment
Whichvgactvgestablishesvgthevgrightsvgofvgworkersvgtovgorganizevgintovgunionsvgandvgnegoti
atevgcontracts?vg-vganswer--NationalvgLaborvgRelationsvgActvgofvg1935
Avgcontractorvghasvghadvgavgproblemvgwithvgemployeesvgstealingvgtoolsvgandvgequipmentvg
fromvgjobvgsites.vgWhenvgconductingvgjobvginterviews,vgmayvgthevgcontractorvgaskvgprospe
ctivevgemployeesvgaboutvgtheirvgarrestvgrecords?vg
vg
A.vgItvgisvglegalvgtovgaskvgprospectivevgemployeesvgaboutvgarrestsvgnotvgleadingvgtovgconvic
tions.
vg
B.vgItvgisvgnotvglegalvgtovgaskvgprospectivevgemployeesvgaboutvgarrestsvgnotvgleadingvgtovgco
nvictions.
vg
C.vgItvgisvglegalvgforvgavgprivatevgemployervgtovgaskvgaboutvgarrestsvgnotvgleadingvgtovgconvic
tions,vgbutvgitvgwouldvgnotvgbevglegalvgforvgcityvgorvgcountyvgagenciesvgtovgaskvgaboutvgsuchvg
arrests.
vg
D.vgItvgisvglegalvgforvgavgprivatevgemployervgtovgaskvgaboutvgarrestsvgleadingvgtovgconvictions
,vgbutvgitvgwouldvgnotvgbevglegalvgforvgavgfederal,vgstate,vgorvglocalvgpublicvgagencyvgtovgdovgs
o.vg-vganswer--
Itvgisvgnotvglegalvgtovgaskvgprospectivevgemployeesvgaboutvgarrestvgnotvgleadingvgtovgconvic
tions.
WhyvgwouldvgavgcontractorvghavevgavgcasevginvgSuperiorvgCourt?vg-vganswer--
Ifvgitvgisvgavgdisputevgofvgmorevgthanvg$25,000vgitvgcanvgbevgtransferredvgtovgSuperiorvgCourt.
WhichvgwouldvgnotvghavevgtovgbevgreportedvgtovgDOSHvgimmediatelyvgorvgwithinvg24vghour
s?
A.vgDeathvgfromvgavgthree-storyvgfall.
B.vgDrunkenvgcranevgoperatorvghitsvgavghigh-voltagevgpowervgline
C.vgCarvgaccidentvginvgwhichvganvgemployeevgstepsvgontovgavgpublicvgroad,vggetsvghitvgbyvga
vgcar,vgandvgsuffersvgavgconcussion.
D.vgEmployeevgfallsvgoffvgforkliftvgandvgsuffersvgavgsevervgbackvginjury.vg-vganswer--
Carvgaccidentvginvgwhichvganvgemployeevgstepsvgontovgavgpublicvgroad,vggetsvghitvgbyvgavgca
r,vgandvgsuffersvgavgconcussion.
Avggeneralvgcontractorvghasvgobtainedvgbidsvgfromvgseveralvgsubcontractorsvgforvgavgprivat
evgproject.vgHevgnoticesvgthatvgonevgbidvgisvgsubstantiallyvglowervgthanvgthevgrest.vgIsvgitvgeth
,icalvgandvgavggoodvgbusinessvgpracticevgforvgthisvgcontractorvgtovginformvgthevgsubcontract
orvgthatvgthevgbidvgisvgsubstantiallyvglowervgthanvgthevgbidsvgofvgthevgothervgsubcontractors?
vg-vganswer--
Yes.vgIfvgthevgcontractorvghasvgreasonvgtovgbelievevgthatvgthevgsubcontractorvghasvgmadevg
anvgerrorvginvgpreparingvghisvgbid,vgthevgcontractorvgshouldvgnotifyvgthevgsubcontractorvgofvg
thevgapparentvgerror,vgbutvgthevgcontractorvgmayvgnotvgdisclosevgthevgamountsvgofvgthevgoth
ervgbids.
AnvgemployervgmustvgfurnishvganvgemployeevgwithvgavgcompletedvgIRSvgFormvgW-
2vg(WagevgandvgTaxvgStatement)vgby:vg-vganswer--Thevg31stvgofvgJanuary.
Aftervgavgjobvgisvgcompleted,vgthevgownervgdecidesvgtovghavevgadditionalvgworkvgdone.vgHo
wvgshouldvgthevgcontractorvgproceed?vg-vganswer--
Writevgavgnewvgcontractvgandvgaskvgthevgownervgtovgsignvgit.
Thevgpurposevgofvgavg20-dayvgpreliminaryvgnoticevgforvgprivatevgworkvgisvgto?vg-vganswer--
Notifyvgthevgownervgthatvgthevgpersonvgorvgfirmvgwhovgsentvgthevgnoticevghasvgimprovedvgth
evgproperty.
Isvgitvglegalvgforvgavgcontractorvgtovgpayvgemployeesvginvgcash?vg-vganswer--
Yes,vgifvgthevgcontractorvgprovidesvgeachvgemployeevgwithvgavgwagevgdeductionvgstateme
ntvgsemimonthlyvgorvgatvgthevgtimevgofvgeachvgwagevgpayment.
Youvgarevgbiddingvgonvgavgjobvgwithvgplansvgdrawnvgbyvgthevgowner.vgYouvgnoticevgavgcodevg
violationvgandvgbringvgitvgtovgthevgattentionvgofvgthevgowner.vgThevgownervgdeclinesvgtovgrem
edyvgthevgcodevgviolationvgandvgtellsvgyouvgnotvgtovgworry.vgWhatvgshouldvgyouvgdo?vg-
vganswer--Declinevgtovgbidvgthevgwork.
Onvgavgtime-and-materialsvgjob,vgyouvgshould:vg-vganswer--
Addvgprofitvgandvgoverheadvgtovglaborvgandvgmaterials
Yourvgemployeevgsetsvgavgcabinetvgwrong.vgThevgcabinetvgfallsvgfromvgthevgwallvgandvgdam
agesvgthevgclient'svgcountervgtop.vgWhatvgshouldvgyouvgdo?
A.vgClaimvgthevgdamagevgonvgyourvggeneralvgliabilityvginsurancevgpolicy.
B.vgRequirevgthevgemployeevgtovgpayvgforvgthevgdamagevgtovgthevgcountertop.
C.vgTellvgthevgclientvgtovgclaimvgthevgdamagedvgcountervgtopvgonvghisvgorvghervghomeowner'
svginsurancevgpolicy.
D.vgNovgactionvgisvgrequired:vgThevgclientvgmustvgassumevgthevgriskvgofvgdamage.vg-
vganswer--Claimvgthevgdamagevgonvgyourvggeneralvgliabilityvginsurancevgpolicy.
Ofvgthevgfollowing,vgwhichvgisvgbestvgforvgdeterminingvgthevgnumbervgofvghoursvgrequiredvgf
orvgdifferentvgphasesvgofvgavgprojectvgandvgforvgmakingvgsurevgthevgjobvgisvgonvgschedule?
A.vgBarvggraphvgandvgchart
B.vgCashvganalysisvgchart
C.vgReviewvgplans
D.vgCriticalvgpathvgmethodvg-vganswer--Thevgcriticalvgpathvgmethod.
, Isvgitvglegalvgforvgavgcontractorvgtovgrequirevgemployeesvgtovgtakevgavglievgdetectorvgtest?vg-
vganswer--
Itvgisvgnotvglegalvgforvgthevgcontractorvgtovgrequirevglievgdetectorvgtests,vgbutvgitvgwouldvgbevgle
galvgforvgavgfederal,vgstate,vgorvglocalvgpublicvgagencyvgtovgrequirevglievgdetectorvgtestsvgofvgt
heirvgemployees.
IfvgavgnewlyvghiredvgemployeevgdoesvgnotvghavevgavgSSN,vgwhatvgshouldvgbevgdone?vg-
vganswer--ThevgemployeevgmustvgapplyvgforvgavgSSN.
Howvgmanyvgtimesvgmayvgyouvgtakevgthevgcontractorsvglicensevgexamvgbeforevgyourvgorigi
nalvgapplicationvgisvgvoided?vg-vganswer--
Asvgmanyvgtimesvgasvgnecessaryvgwithinvg18vgmonths.
Whenvgshouldvgavgcontractorvgrenewvgthevgcontractor'svglicensevgbond?vg-vganswer--
30vgdaysvgbeforevgitvgexpires.
ThevgqualifyingvgRMEvgforvgavgconstructionvgfirmvgmustvgworkvgatvgleast:vg-vganswer--
AvgqualifyingvgRMEvgforvgavgconstructionvgfirmvgmustvgworkvgatvgleastvg32vghoursvgpervgwee
kvgorvg80%vgofvgthevgworkvgweek.
ThevgfederalvgEmployervgIdentificationvgNumbervg(EIN)vgisvgissuedvgbyvgthe:vg-vganswer--
ThevgInternalvgRevenuevgService
Everyvgemployervgofvg______vgorvgmorevgfullvgorvgpartvgtimevgemployeesvgmustvgkeepvgwrit
tenvghealthvgandvgsafetyvgrecordsvgforvg_______vgyears.
A.vg1-3
B.vg7-4
C.vg10-3
D.vg11-5vg-vganswer--
Everyvgemployervgofvg11vgorvgmorevgfullvgorvgpartvgtimevgemployeesvgmustvgkeepvgwrittenvg
healthvgandvgsafetyvgrecordsvgforvg5vgyears.
Aftervgyouvghavevgreadvgthevgplansvgandvgspecifications,vgwhatvgisvgthevgnextvgimportantvgst
epvginvgwritingvgavgbid?
A.vgTalkvgtovgandvgselectvgsubs.
B.vgWalkvgthevgjob.
C.vgCallvgaboutvgmaterials,vgprice,vgandvgavailability.
D.vgTalkvgtovgthevgcrewvgleadervgaboutvglabor.vg-vganswer--Walkvgthevgjob.
Oncevgavgbudgetvgisvgfinalized,vgthe:
A.vgContractorvgshouldvgstickvgtovgthevgbudgetvgnovgmattervgwhatvghappens.
B.vgContractorvgshouldvgdovgthevgbestvgpossiblevgjobvgofvgstayingvgwithinvgthevgbudget.
C.vgBudgetvgshouldvgbevgrevisedvgeachvgmonth.
D.vgBudgetvgshouldvgbevgreferredvgtovgonlyvgifvgthevgbusinessvghasvgcashflowvgproblems.vg-
vganswer--
Thevgcontractorvgshouldvgdovgthevgbestvgpossiblevgjobvgofvgstayingvgwithinvgbudget.vg`