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2025 - 2026 CSLB CONTRACTOR'S LAW & BUSINESS
EXAM|ACTUAL 200 QUESTIONS AND VERIFIED
ANSWERS|ALREADY GRADED A+
An employer remits State disability taxes withheld from an employees wages to what agency? Employment Development Department Which act establishes the rights of workers to organize into unions and negotiate contracts? 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. B.It is not legal to ask prospective employees about arrest not leading to convictions. 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. 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. C. 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 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: The 31st of January.
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. A.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 D.The critical path method. Is it legal for a contractor to require employees to take a lie detector test? 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? The employee must apply for a SSN.
How many times may you take the contractors license exam before your original application is voided? As many times as necessary within 18 months. When should a contractor renew the contractor's license bond? 30 days before it expires. The qualifying RME for a construction firm must work at least: 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: 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 Explanation: Every employer of 11 or more full or part time employees must keep written health and safety records for 5 years.
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. Review the plans and specifications with the owner. When an owner signs a receipt for a stop notice, it usually means the owner: The owner recognizes that a lien could be placed on funds. To whom do you report and pay sales tax? The Board of Equalization DOSH must investigate a complaint charging a serious violation of health or safety standards within: 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. 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? 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. 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
Direct costs are $37,000, overhead is 12% and profit is 5%. What is the selling price? $44,578. Add the 12% overhead and 5% profit together, then subtract that from 100% (83%). Then divide the total direct cost ($37,000) by the remaining percentage (83%) = 445.7831. 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? 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? 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. 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: Must be in Spanish. Who pays FUTA? 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. Five years.
What is the maximum allowed travel distance from any point of a work area to a fire extinguisher "Class "A"? 75 Feet The CSLB has established a mandatory arbitration program of verified companies in which the damage is: $12,500 or less. A contractor usually will not be held liable for a supplier going on strike, but if your supplier did go on strike what would you do? Contact the owner immediately. When you get an approved set of plans, what should you do first? Read any notes from the building department. 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 A balance sheet. You are the qualifier for an active contractor's license. How do you inactivate the license? 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. 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,
If an owner lawfully cancels a contract, how long does the contractor have to pick up previously delivered materials? A. Within 24 hours after cancellation B. Within 10 days after cancellation C. Within 20 days after cancellation D. It's too late: If the materials are delivered to the property before a notice of cancellation is received, the materials become property of the owner. If an owner lawfully cancels a contract, the contractor has 20 days to pick up previously delivered materials. Who is responsible for checking the site before the building inspector arrives? The contractor is responsible for checking the site before the inspector arrives. When is an employee allowed to view their own personnel file? When ever they wish to. The supplier of a potentially hazardous product must be able to provide a(n) _________ with that product. A. Material Safety Data Sheet
B. Certificate for Use C. Injury Illness and Prevention Program D. Hazard Evaluation System Information Services bulletin. 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? 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? 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? $ 40 hours at $12.00 20 hours at $18.
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. A sub or material supplier has 30 days to file a lien once a notice of completion has been recorded. What possible reason would an owner have for requiring an unconditional lien release from a subcontractor? The owner's property covered by the release may not be liened. A prime contractor entered into a construction contract with a subcontractor. An employee of the subcontractor was injured, but unfortunately the subcontractor had not secured workers' compensation coverage. Which of the following statements best describes the situation, except in cases of fraud? A. The subcontractor is guilty, but the prime contractor is not responsible. B. The prime contractor is guilty, but the subcontractor is not responsible. C. Neither the prime contractor nor the subcontractor are responsible.
D. The subcontractor is guilty, but the prime contractor must take responsibility for the injuries. The subcontractor is guilty, but the prime contractor must take responsibility for the injuries. Your accountant advises you to set up a cost management system. What does a cost management system do? A cost 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: 1978 What does it mean when a subcontractor signs a waiver and release form on a public works project? 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
