CSLB CONTRACTOR'S LAW &
BUSINESS EXAM QUESTIONS AND
ANSWERS ALREADY PASSED
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. ✔✔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. ✔✔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? ✔✔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.
After a job is completed, the owner decides to have additional work done. How should the
contractor proceed? ✔✔Write a new contract and ask the owner to sign it.
The purpose of a 20-day preliminary notice for private work is to? ✔✔Notify the owner that the
person or firm who sent the notice has improved the property.
Is it legal for a contractor to pay employees in cash? ✔✔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? ✔✔Decline to bid the work.
On a time-and-materials job, you should: ✔✔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.
D. No action is required: The client must assume the risk of damage. ✔✔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 ✔✔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.
BUSINESS EXAM QUESTIONS AND
ANSWERS ALREADY PASSED
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. ✔✔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. ✔✔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? ✔✔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.
After a job is completed, the owner decides to have additional work done. How should the
contractor proceed? ✔✔Write a new contract and ask the owner to sign it.
The purpose of a 20-day preliminary notice for private work is to? ✔✔Notify the owner that the
person or firm who sent the notice has improved the property.
Is it legal for a contractor to pay employees in cash? ✔✔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? ✔✔Decline to bid the work.
On a time-and-materials job, you should: ✔✔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.
D. No action is required: The client must assume the risk of damage. ✔✔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 ✔✔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.
