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CONTRACTOR LAW AND BUSINESS EXAM (CSLB)
2025 QUESTIONS AND CORRECT ANSWERS GRADE
A BRAND NEW
An employer remits State disability taxes withheld from an employees wages to what agency? - answer Employment Development Department Which act establishes the rights of workers to organize into unions and negotiate contracts? - 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. - 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 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? - answer Yes. If the contractor has reason to believe that the subcontractor has made an error in
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. 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 - answer The critical path method. Is it legal for a contractor to require employees to take a lie detector test? - 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? - answer The employee must apply for a SSN. 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. When should a contractor renew the contractor's license bond? - answer 30 days before it expires. 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. A. 1- 3 B. 7- 4 C. 10- 3
When purchasing insurance, what is the best way to chose among different companies? - answer Cost and Coverage Sometimes contracts can prove to be too vague to interpret without disagreement between owner and contractor. Which of the following steps would best prevent such problems? A. Walk the job site with the owner. B. Review the plans and specifications with the owner. C. Show the owner the critical path schedule. D. Include a payment schedule in the contract and review other details of the contract with the owner. - answer Review the plans and specifications with the owner. When an owner signs a receipt for a stop notice, it usually means the owner: - answer The owner recognizes that a lien could be placed on funds. To whom do you report and pay sales tax? - answer The Board of Equalization DOSH must investigate a complaint charging a serious violation of health or safety standards within: - answer DOSH must investigate a complaint charging a serious violation of health or safety standards within two working days.
By law, a "hard laborer" may not be younger than ______ years old. - answer A hard laborer may not be younger than 16 years old. When is the last day a customer can cancel a contract that was signed on Friday, December 21st? - answer The following Wednesday. The customer has the right to cancel 3 business days after the day the contract has been signed and delivered to the. In this case: Saturday Midnight day one. Monday midnight day two Wednesday Midnight day three. NOTE: Sunday and Tuesday were not business days since Tuesday was a holiday. Correct answer is Wednesday midnight. When a notice of completion has been filed, the original contractor has how many days to record a lien. - answer 60 days to record a lien. Which of the following financial ratios is the strictest measure of liquidity? A. Quick Ratio B. Current Ratio C. Profitability Ratio D. Leverage Ratio - answer The quick ratio is the strictest measure of liquidity.
A mechanics' lien is a written document that must be signed and verified by the claimant. The first and third steps a contractor should take in filing a lien are listed below. Step 1: Obtain the exact legal description of the property. Step 2: Step 3: Find out if the person requesting the work of improvement is the owner. What is Step 2? - answer Find out the name of the legal owner of the property as well as the percent of ownership. A mechanics' lien. Step 1: Obtain the exact legal description of the property. Step 2: Find out the name of the legal owner of the property as well as the percent of ownership. Step 3: Find out if the person requesting the work of improvement is the owner. What happens after an employee's taxable wages exceed $7,000? - answer After $7,000, the employer does not pay FUTA. A subcontractor who does not serve a preliminary notice: A. May not serve a stop notice but may file a mechanics' lien. B. May not file a mechanics' lien but may serve a stop notice C. loses both stop and mechanics's lien rights
D. Loses nothing because subcontractors are not required to serve preliminary notices. - answer A subcontractor that does not serve a preliminary notice loses both stop notice and mechanics' lien rights. If a sales presentation is made in Spanish, the home solicitation contract: - answer Must be in Spanish. Who pays FUTA? - answer The employer pays FUTA until an employees taxable wages exceed $7,000. If a contractor forgets to renew his or her license on time, the expired license may be renewed any time within _____ after its expiration without reapplying for a license and fulfilling the exam or waiver requirements again. - answer Five years. How often are you required to pay sales tax? - answer It depends on the expected amount of taxable sales. A contractor hires a subcontractor to demolish a concrete wall. Who is responsible for supplying safety goggles. - answer Subcontractor How long does a client have to cancel a contract for repairs that are the result of an event for which a State of Emergency was declared? - answer In a state of emergency, a client has 7 business days to cancel a contract for repairs.
A(n) _____ represents a company's financial position on a specified date. A. Balance Sheet B. Income statement C. Cash flow statement D. Profit plan - answer A balance sheet. You are the qualifier for an active contractor's license. How do you inactivate the license? - answer Write to CSLB, requesting that the license be made inactive. You are bidding as a prime contractor on a public works project. The work will not involve construction, improvement, or repair of streets, highways, or bridges. You will use subcontractors for part of the work. If you do not name a subcontractor for any part of the work: A. The contract is canceled B. You will do that part of the work yourself C. You may simply submit a name later D. the awarding authority will choose a subcontractor for you. - answer You will do that part of the work yourself.
John Meyers, a general contractor, had a contract with Mr. and Ms. Barnes to construct a gazebo and deck in their back yard. John was behind schedule and hired his 18-year-old son, Bart, to help on a part- time basis. After working on the project for a month, Bart slipped on a plank that John had laid across the deck but did not nail securely. As a result of the fall, Bart broke his leg. John is insured for workers' compensation, but Bart wants to sue his father for negligence in a civil action. Which of the following statements is CORRECT? A. John is not liable for damages in a civil action because the injured employee is his son. B. John is liable for damages in a civil action and must prove that the injury did not result from his negligence. C. In a civil action, John may use the defense that the injury was the result of the contributory negligence of his son. D. A civil action is not a possibility when the dispute involves a job- related injury, unless the employer is not insured for workers' compensation. This case would be handled by the Department of Industrial Relations. - answer A civil action is not a possibility when the dispute involves a job-related injury, unless the employer is not insured for workers' compensation. This case would be handled by the Department of Industrial Relations. An applicant for a contractor's license receives a notice from the Contractors' State License Board, dated October 1, that the applicant
A. Material Safety Data Sheet B. Certificate for Use C. Injury Illness and Prevention Program D. Hazard Evaluation System Information Services bulletin. - answer Material Safety Data Sheet Harry and Linda have done business as a licensed partnership. If Linda is a general partner, but not the qualifier, what must she do to get an individual license? - answer If Linda was listed as a partner on the license and was actively engaged in the business for at least five of the past seven years, she may apply for a license with a waiver of the exam. Where is the Notice of Right to Cancel found on a home improvement contract? - answer Near the client signature. An employee works 60 hours in one week. If the hourly wage rate is $12.00, what are the gross wages? - answer $ 40 hours at $12.00 20 hours at $18. If you are planning to dig, drill, and bore at a job site, you should notify _____ before starting work.
A. DOSH
B. The Environmental Protection Agency C. The County Engineer D. The regional Underground Service Alert Notification Center - answer The regional Underground Service Alert Notification Center (USA) Is it legal for a contractor to hire professional strikebreakers to replace striking employees? - answer No. The contractor is subject to a maximum fine of $1,000 and/or a maximum jail sentence of 90 days. You have been awarded a job. It requires two days for site preparation and one day for clean-up. The contract involves two separate tasks-- one lasting seven days and the other 10 days. If the two tasks can be done simultaneously, for how many days should you schedule the job? A. 7 Days B. 13 Days C. 15 Days D. 20 Days - answer 13 days as long as the jobs can be done simultaneously. A subcontractor or material supplier has 30 days to file a lien once a notice of completion has been recorded. - answer A sub or material supplier has 30 days to file a lien once a notice of completion has been recorded.
management system gives a cost history to analyze labor and material costs. before beginning work, an employer or contractor must inquire whether asbestos is present in any building constructed prior to: - answer 1978 What does it mean when a subcontractor signs a waiver and release form on a public works project? - answer The subcontractor gives up the right to lien the construction funds. A contractor is looking for an insurance policy to cover a high degree of exposure to risk. Of the following, which policy would be the best for this purpose? A. Property B. General Liability C. Builder's Risk D. Umbrella - answer Umbrella policy. But the umbrella policy would only cover the high degree of exposure if it was covered by one of the underlying policies. Which of the following is considered a direct cost? A. Telephone use by employees
B. Personal Vehicle C. Insurance. D. Payroll Tax - answer Payroll tax is considered a direct cost. How many days does a contractor have to notify the Registrar after being issued a workers' compensation insurance policy? - answer A contractor has 90 days to notify the Registrar after being issued a workers' compensation insurance policy. When balancing the accounts receivable which of the following would have no effect? A. Posting to the wrong accounts-receivable account. B. Crediting instead of debiting the accounts-receivable account. C. Debiting instead of crediting the accounts-receivable account. D. Posting a receivable to an accounts-payable account. - answer Posting to the wrong accounts-receivable account. What kind of discount do lumber yards and other supplies offer to contractors who pay their bill promptly? - answer 1%-2% discount. Of the following, which document is usually delivered first in a transaction involving a home improvement contract?
