5 CSLB CONTRACTOR'S LAW & BUSINESS
EXAM QUESTIONS AND ANSWERS 100% PASS
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 con
ducting 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 leg
al 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 concuss
ion.
,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 tha
t one bid is substantially lower than the rest. Is it ethical and a good business practice for this contract
or to inform the subcontractor that the bid is substantially lower than the bids of the other subcontracto
rs? - correct answer-
Yes. If the contractor has reason to believe that the subcontractor has made an error in preparing his bi
d, the contractor should notify the subcontractor of the apparent error, but the contractor may not discl
ose 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 p
roceed? - 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 forx ax contractorx tox payx employeesx inx cash?x -x correctx answer-
Yes,x ifx thex contractorx providesx eachx employeex withx ax wagex deductionx statementx semimonthlyx orx atx th
ex t
imex ofx eachx wagex payment.
Youx arex biddingx onx ax jobx withx plansx drawnx byx thex owner.x Youx noticex ax codex violationx andx bringx itx t
ox th
ex attentionx ofx thex owner.x Thex ownerx declinesx tox remedyx thex codex violationx andx tellsx youx notx tox worry
.
Whatx shouldx youx do?x -x correctx answer-Declinex tox bidx thex work.
Onx ax time-and-materialsx job,x youx should:x -x correctx answer-
Addx profitx andx overheadx tox laborx andx materials
Yourx employeex setsx ax cabinetx wrong.x Thex cabinetx fallsx fromx thex wallx andx damagesx thex client'sx counte
rx t
op.x Whatx shouldx youx do?
A.x Claimx thex damagex onx yourx generalx liabilityx insurancex policy.
,x
B.x Requirex thex employeex tox payx forx thex damagex tox thex countertop
.
C.x Tellx thex clientx tox claimx thex damagedx counterx topx onx hisx orx herx homeowner'sx insurancex poli
cy.
D.x Nox actionx isx required:x Thex clientx mustx assumex thex riskx ofx damage.x -
x correctx answer-
Claimx thex damagex onx yourx generalx liabilityx insurancex policy.
Ofx thex following,x whichx isx bestx forx determiningx thex numberx ofx hoursx requiredx forx differentx phasesx of
xa
projectx andx forx makingx surex thex jobx isx onx schedule?
A.x Barx graphx andx chart
B.x Cashx analysisx chart
C.x Reviewx plans
D.x Criticalx pathx methodx -x correctx answer-Thex criticalx pathx method.
Isx itx legalx forx ax contractorx tox requirex employeesx tox takex ax liex detectorx test?x -x correctx answer-
Itx isx notx legalx forx thex contractorx tox requirex liex detectorx tests,x butx itx wouldx bex legalx forx ax federal,x state
,x or
localx publicx agencyx tox requirex liex detectorx testsx ofx theirx employees.
Ifx ax newlyx hiredx employeex doesx notx havex ax SSN,x whatx shouldx bex done?x -
x correctx answer-
Thex employeex mustx applyx forx ax SSN.
Howx manyx timesx mayx youx takex thex contractorsx licensex examx beforex yourx originalx applicationx isx voide
d?
- correctx answer-Asx manyx timesx asx necessaryx withinx 18x months.
Whenx shouldx ax contractorx renewx thex contractor'sx licensex bond?x -
x correctx answer-
30x daysx beforex itx expires.
Thex qualifyingx RMEx forx ax constructionx firmx mustx workx atx least:x -x correctx answer-
Ax qualifyingx RMEx forx ax constructionx firmx mustx workx atx leastx 32x hoursx perx weekx orx 80%x ofx thex wor
kx w
eek.
Thex federalx Employerx Identificationx Numberx (EIN)x isx issuedx byx the:x -
x correctx answer-
Thex Internalx Revenuex Service
,x
Everyx employerx ofx ______x orx morex fullx orx partx timex employeesx mustx keepx writtenx healthx andx safetyx r
ec
ordsx forx _______x years.
A.x 1-3
B.x 7-4
C.x 10-3
D.x 11-5x -x correctx answer-
Everyx employerx ofx 11x orx morex fullx orx partx timex employeesx mustx keepx writtenx healthx andx safetyx recor
ds
forx 5x years.
Afterx youx havex readx thex plansx andx specifications,x whatx isx thex nextx importantx stepx inx writingx ax bi
d?
A.x Talkx tox andx selectx subs.
B.x Walkx thex job.
C.x Callx aboutx materials,x price,x andx availability.
D.x Talkx tox thex crewx leaderx aboutx labor.x -x correctx answer-
Walkx thex job.
Oncex ax budgetx isx finalized,x the:
A.x Contractorx shouldx stickx tox thex budgetx nox matterx whatx happens.
B.x Contractorx shouldx dox thex bestx possiblex jobx ofx stayingx withinx thex budge
t.
C.x Budgetx shouldx bex revisedx eachx month.
D.x Budgetx shouldx bex referredx tox onlyx ifx thex businessx hasx cashflowx problems.x -
x correctx answer-
Thex contractorx shouldx dox thex bestx possiblex jobx ofx stayingx withinx budget.x `
Whox mustx signx ax jointx controlx addendumx tox ax homex improvementx contract?x -
x correctx answer-
Owner,x contractor,x andx jointx controlx officer.
Whenx purchasingx insurance,x whatx isx thex bestx wayx tox chosex amongx differentx companies?
x-
correctx answer-Costx andx Coverage
EXAM QUESTIONS AND ANSWERS 100% PASS
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 con
ducting 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 leg
al 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 concuss
ion.
,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 tha
t one bid is substantially lower than the rest. Is it ethical and a good business practice for this contract
or to inform the subcontractor that the bid is substantially lower than the bids of the other subcontracto
rs? - correct answer-
Yes. If the contractor has reason to believe that the subcontractor has made an error in preparing his bi
d, the contractor should notify the subcontractor of the apparent error, but the contractor may not discl
ose 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 p
roceed? - 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 forx ax contractorx tox payx employeesx inx cash?x -x correctx answer-
Yes,x ifx thex contractorx providesx eachx employeex withx ax wagex deductionx statementx semimonthlyx orx atx th
ex t
imex ofx eachx wagex payment.
Youx arex biddingx onx ax jobx withx plansx drawnx byx thex owner.x Youx noticex ax codex violationx andx bringx itx t
ox th
ex attentionx ofx thex owner.x Thex ownerx declinesx tox remedyx thex codex violationx andx tellsx youx notx tox worry
.
Whatx shouldx youx do?x -x correctx answer-Declinex tox bidx thex work.
Onx ax time-and-materialsx job,x youx should:x -x correctx answer-
Addx profitx andx overheadx tox laborx andx materials
Yourx employeex setsx ax cabinetx wrong.x Thex cabinetx fallsx fromx thex wallx andx damagesx thex client'sx counte
rx t
op.x Whatx shouldx youx do?
A.x Claimx thex damagex onx yourx generalx liabilityx insurancex policy.
,x
B.x Requirex thex employeex tox payx forx thex damagex tox thex countertop
.
C.x Tellx thex clientx tox claimx thex damagedx counterx topx onx hisx orx herx homeowner'sx insurancex poli
cy.
D.x Nox actionx isx required:x Thex clientx mustx assumex thex riskx ofx damage.x -
x correctx answer-
Claimx thex damagex onx yourx generalx liabilityx insurancex policy.
Ofx thex following,x whichx isx bestx forx determiningx thex numberx ofx hoursx requiredx forx differentx phasesx of
xa
projectx andx forx makingx surex thex jobx isx onx schedule?
A.x Barx graphx andx chart
B.x Cashx analysisx chart
C.x Reviewx plans
D.x Criticalx pathx methodx -x correctx answer-Thex criticalx pathx method.
Isx itx legalx forx ax contractorx tox requirex employeesx tox takex ax liex detectorx test?x -x correctx answer-
Itx isx notx legalx forx thex contractorx tox requirex liex detectorx tests,x butx itx wouldx bex legalx forx ax federal,x state
,x or
localx publicx agencyx tox requirex liex detectorx testsx ofx theirx employees.
Ifx ax newlyx hiredx employeex doesx notx havex ax SSN,x whatx shouldx bex done?x -
x correctx answer-
Thex employeex mustx applyx forx ax SSN.
Howx manyx timesx mayx youx takex thex contractorsx licensex examx beforex yourx originalx applicationx isx voide
d?
- correctx answer-Asx manyx timesx asx necessaryx withinx 18x months.
Whenx shouldx ax contractorx renewx thex contractor'sx licensex bond?x -
x correctx answer-
30x daysx beforex itx expires.
Thex qualifyingx RMEx forx ax constructionx firmx mustx workx atx least:x -x correctx answer-
Ax qualifyingx RMEx forx ax constructionx firmx mustx workx atx leastx 32x hoursx perx weekx orx 80%x ofx thex wor
kx w
eek.
Thex federalx Employerx Identificationx Numberx (EIN)x isx issuedx byx the:x -
x correctx answer-
Thex Internalx Revenuex Service
,x
Everyx employerx ofx ______x orx morex fullx orx partx timex employeesx mustx keepx writtenx healthx andx safetyx r
ec
ordsx forx _______x years.
A.x 1-3
B.x 7-4
C.x 10-3
D.x 11-5x -x correctx answer-
Everyx employerx ofx 11x orx morex fullx orx partx timex employeesx mustx keepx writtenx healthx andx safetyx recor
ds
forx 5x years.
Afterx youx havex readx thex plansx andx specifications,x whatx isx thex nextx importantx stepx inx writingx ax bi
d?
A.x Talkx tox andx selectx subs.
B.x Walkx thex job.
C.x Callx aboutx materials,x price,x andx availability.
D.x Talkx tox thex crewx leaderx aboutx labor.x -x correctx answer-
Walkx thex job.
Oncex ax budgetx isx finalized,x the:
A.x Contractorx shouldx stickx tox thex budgetx nox matterx whatx happens.
B.x Contractorx shouldx dox thex bestx possiblex jobx ofx stayingx withinx thex budge
t.
C.x Budgetx shouldx bex revisedx eachx month.
D.x Budgetx shouldx bex referredx tox onlyx ifx thex businessx hasx cashflowx problems.x -
x correctx answer-
Thex contractorx shouldx dox thex bestx possiblex jobx ofx stayingx withinx budget.x `
Whox mustx signx ax jointx controlx addendumx tox ax homex improvementx contract?x -
x correctx answer-
Owner,x contractor,x andx jointx controlx officer.
Whenx purchasingx insurance,x whatx isx thex bestx wayx tox chosex amongx differentx companies?
x-
correctx answer-Costx andx Coverage
