CSLB CONTRACTOR'S LAW & BUSINESS
EXAM QUESTIONS WITH ACCURATE
ANSWERS 2025\2026 A+ Grade.
An employer remits State disability taxes withheld from an employees wages
to what agency?
- accurate answers-Employment Development Department
Which act establishes the rights of workers to organize into unions and
negotiate contracts?
- accurate answers-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.
- accurate answers-It is not legal to ask prospective employees about arrest
not leading to convictions.
Why would a contractor have a case in Superior Court?
- accurate answers-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.
- accurate answers-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?
- accurate answers-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:
- accurate answers-The 31st of January.
After a job is completed, the owner decides to have additional work done.
How should the contractor proceed?
- accurate answers-Write a new contract and ask the owner to sign it.
The purpose of a 20-day preliminary notice for private work is to?
- accurate answers-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?
- accurate answers-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?
- accurate answers-Decline to bid the work.
On a time-and-materials job, you should:
- accurate answers-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.
- accurate answers-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
- accurate answers-The critical path method.
Is it legal for a contractor to require employees to take a lie detector test?
- accurate answers-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?
- accurate answers-The employee must apply for a SSN.
How many times may you take the contractors license exam before your
original application is voided?
- accurate answers-As many times as necessary within 18 months.
, When should a contractor renew the contractor's license bond?
- accurate answers-30 days before it expires.
The qualifying RME for a construction firm must work at least:
- accurate answers-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:
- accurate answers-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
- accurate answers-Every employer of 11 or more full or part time employees
must keep written health and safety records for 5 years.
After you have read the plans and specifications, what is the next important
step in writing a bid?
A. Talk to and select subs.
B. Walk the job.
C. Call about materials, price, and availability.
D. Talk to the crew leader about labor.
- accurate answers-Walk the job.
Once a budget is finalized, the:
A. Contractor should stick to the budget no matter what happens.
B. Contractor should do the best possible job of staying within the budget.
C. Budget should be revised each month.
D. Budget should be referred to only if the business has cashflow problems.
- accurate answers-The contractor should do the best possible job of staying
within budget. `
EXAM QUESTIONS WITH ACCURATE
ANSWERS 2025\2026 A+ Grade.
An employer remits State disability taxes withheld from an employees wages
to what agency?
- accurate answers-Employment Development Department
Which act establishes the rights of workers to organize into unions and
negotiate contracts?
- accurate answers-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.
- accurate answers-It is not legal to ask prospective employees about arrest
not leading to convictions.
Why would a contractor have a case in Superior Court?
- accurate answers-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.
- accurate answers-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?
- accurate answers-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:
- accurate answers-The 31st of January.
After a job is completed, the owner decides to have additional work done.
How should the contractor proceed?
- accurate answers-Write a new contract and ask the owner to sign it.
The purpose of a 20-day preliminary notice for private work is to?
- accurate answers-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?
- accurate answers-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?
- accurate answers-Decline to bid the work.
On a time-and-materials job, you should:
- accurate answers-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.
- accurate answers-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
- accurate answers-The critical path method.
Is it legal for a contractor to require employees to take a lie detector test?
- accurate answers-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?
- accurate answers-The employee must apply for a SSN.
How many times may you take the contractors license exam before your
original application is voided?
- accurate answers-As many times as necessary within 18 months.
, When should a contractor renew the contractor's license bond?
- accurate answers-30 days before it expires.
The qualifying RME for a construction firm must work at least:
- accurate answers-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:
- accurate answers-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
- accurate answers-Every employer of 11 or more full or part time employees
must keep written health and safety records for 5 years.
After you have read the plans and specifications, what is the next important
step in writing a bid?
A. Talk to and select subs.
B. Walk the job.
C. Call about materials, price, and availability.
D. Talk to the crew leader about labor.
- accurate answers-Walk the job.
Once a budget is finalized, the:
A. Contractor should stick to the budget no matter what happens.
B. Contractor should do the best possible job of staying within the budget.
C. Budget should be revised each month.
D. Budget should be referred to only if the business has cashflow problems.
- accurate answers-The contractor should do the best possible job of staying
within budget. `
