CSLB Law & Business Exam practice questions
240 free questions with answers and explanations.
- 1.A contractor wants a 25% gross profit margin on a job with direct costs of $12,000. What price should the contractor charge the customer?Business Finances
- 2.A homeowner signs a home improvement contract for $8,500 to remodel a kitchen. What is the maximum down payment the contractor may legally collect?Contract Requirements and Execution
- 3.A subcontractor's crew works alongside chemical solvents supplied by another trade on a shared job site. Under Cal/OSHA's Hazard Communication Standard, when must Safety Data Sheets (SDS) for these chemicals be accessible to employees?Safety
- 4.A contractor's employee suffers a fatal injury on a job site, but the contractor does not report it to Cal/OSHA until 30 hours after the incident, well beyond the required timeframe. What is the most likely regulatory consequence for this delayed reporting?Safety
- 5.A California employer pays one employee $50,000 in wages during the year and has no federal credit reduction issues. Under the Federal Unemployment Tax Act (FUTA), the net effective rate is 0.6% on the first $7,000 of wages per employee. What is the employer's FUTA tax liability for this employee?Employment Requirements
- 6.A drywall subcontractor has a contract only with the general contractor (not the owner) on a private project with a construction lender. To fully preserve lien, stop payment notice, and bond rights, the subcontractor's preliminary 20-day notice must be served on which parties?Insurance and Liens
- 7.A county establishes its own Labor Compliance Program (LCP) approved by DIR to monitor a public works project. What is the primary function of this LCP during the project?Public Works
- 8.A contractor's income statement shows total revenue of $400,000 and net profit of $32,000 for the year. What is the contractor's net profit margin?Business Finances
- 9.A homeowner pays a contractor's final invoice by check and, on the same day, the contractor signs a conditional waiver and release upon final payment. Two days later, the check bounces for insufficient funds. What is the legal effect on the contractor's lien rights?Insurance and Liens
- 10.During a bathroom remodel, a contractor and homeowner sign a written change order adding significant additional work due to unforeseen plumbing conditions. Besides the added cost, what else must the change order address under California law?Contract Requirements and Execution
- 11.A contractor uses the FIFO (first-in, first-out) method to value inventory. The contractor purchased 100 units of a fitting at $6 each, then later purchased another 100 units at $8 each. During the month, the contractor used 150 units on jobs. Under FIFO, what is the value of the remaining 50 units in ending inventory?Business Finances
- 12.An employee believes she was denied overtime wages under the Labor Code and did not have a written employment contract specifying pay terms. What is the general statute of limitations for filing a claim to recover those unpaid statutory wages in California?Employment Requirements
- 13.A worker is hospitalized overnight for surgery after a scaffolding collapse. Within what timeframe must the employer report this serious injury to Cal/OSHA?Safety
- 14.A material supplier wants to compel a construction lender to withhold funds from the general contractor because the supplier has not been paid. Which remedy should the supplier pursue?Insurance and Liens
- 15.A contractor has completed work valued at $4,000 on a $20,000 kitchen remodel contract. What is the maximum progress payment the contractor may lawfully request at this point?Contract Requirements and Execution
- 16.A homeowner properly cancels a home improvement contract within the 3-day cancellation period. Under California law, what must the contractor do regarding any payments or property received from the homeowner?Contract Requirements and Execution
- 17.A homeowner signs a home improvement contract for a room addition on Friday, June 6. Under the three-day right to cancel, and assuming Saturday counts as a business day, by what date and time must the homeowner deliver a notice of cancellation to rescind the contract?Contract Requirements and Execution
- 18.A residential IIPP names the company owner as the person with authority and responsibility for implementing the safety program. If the owner fails to ensure hazard corrections are made after identifying an unsafe condition, what is the compliance consequence under Title 8 CCR §3203?Safety
- 19.A sole proprietor contractor with no employees wants to satisfy CSLB's workers' compensation requirement without purchasing a policy. What must the contractor obtain instead?Insurance and Liens
- 20.A construction laborer works an 8-hour shift with no meal period waiver. Under California wage and hour law, how many paid 10-minute rest breaks is the employee generally entitled to during that shift?Employment Requirements
- 21.An employee quits her job without giving her employer any advance notice. Under California Labor Code Section 202, by when must the employer pay her final wages?Employment Requirements
- 22.Which of the following is a required element that must be stated in every home improvement contract regarding project scheduling?Contract Requirements and Execution
- 23.A contractor orally agrees to install new flooring for $2,500 and begins work the next day without a written contract. Has the contractor violated California law?Contract Requirements and Execution
- 24.A home improvement contract is negotiated on the contractor's behalf by a registered home improvement salesperson rather than the contractor personally. Under California law, what must the contract disclose regarding the salesperson?Contract Requirements and Execution
- 25.A contractor keeps a $200 petty cash fund in the office to pay for small incidental expenses. Which practice best supports accurate recordkeeping for this fund?Business Finances
- 26.A licensed contractor operates as a corporation and is the sole shareholder and only employee. What must this contractor do regarding workers' compensation insurance to be exempt from the coverage requirement?Employment Requirements
- 27.A contractor is excavating a trench 5 feet deep for a foundation footing. Cal/OSHA requires a ladder, ramp, or other safe means of egress in trenches 4 feet or more in depth. What is the maximum lateral travel distance an employee may be required to travel to reach that means of egress?Safety
- 28.A sole proprietor contractor decides to incorporate her business to gain liability protection. Regarding her existing individual contractor's license, what must she do?Business Organization and Licensing
- 29.A licensed structural engineer provides design services under a written contract directly with a property owner, but the project is later abandoned before construction begins and the engineer is not paid. Under California law, what right does the design professional have?Insurance and Liens
- 30.A property owner records a valid Notice of Completion 10 days after the work of improvement is finished. A subcontractor who is not the direct contractor must now record any mechanics lien within how many days after the Notice of Completion is recorded?Insurance and Liens
- 31.A home improvement contract specifies a start date of March 1. Due to a permit delay, the contractor is unable to begin work until March 20. Under California law, what is the contractor's obligation regarding this delay?Contract Requirements and Execution
- 32.A homeowner hires a contractor to trim a hedge for $350. Under California's Home Improvement Business statutes, this transaction is:Contract Requirements and Execution
- 33.A homeowner is reviewing a home improvement contract before signing. Under California law, which of the following must appear on the face of the contract?Contract Requirements and Execution
- 34.A homeowner is asked to sign a home improvement contract, but the total contract price and description of work are left blank, with the contractor promising to fill them in later. Is this practice permitted under California law?Contract Requirements and Execution
- 35.A new employer pays wages to an employee for the first time on March 3. Under California law, by when must the employer register with the Employment Development Department (EDD)?Employment Requirements
- 36.An awarding body discovers that a subcontractor on a public works project has repeatedly failed to submit certified payroll records despite multiple requests. What action is the awarding body authorized to take under Labor Code §1771.5?Public Works
- 37.A framing subcontractor completed work on a private job where no Notice of Completion or Cessation was recorded. Within how many days after completion of the entire work of improvement must the subcontractor record a mechanics lien to preserve its rights?Insurance and Liens
- 38.A construction company classifies its jobsite supervisor as exempt under the executive exemption and pays her a fixed salary of $5,200 per month. California's minimum wage is $16.00 per hour. Does her salary meet the minimum salary threshold required for the executive exemption?Employment Requirements
- 39.A specialty contractor performs a niche trade (playground and park equipment installation) that does not correspond to any of CSLB's standard classifications (A, B, or C-list specialties). What type of classification may CSLB issue in this situation?Business Organization and Licensing
- 40.A corporation lists its vice president of sales as the Responsible Managing Officer (RMO) on its CSLB license application. To satisfy CSLB requirements, what must be true about this person's role in addition to holding an officer title?Business Organization and Licensing
- 41.An employee is treated at an emergency room and kept overnight solely for observation after a minor fall, with no diagnosis of serious injury. Under Cal/OSHA rules, how should this incident be classified?Safety
- 42.A tile setter maintains his own contractor's license, advertises his tile-setting services to the public, and regularly performs work for several different general contractors simultaneously. Which prong of the ABC test does this evidence most directly support?Employment Requirements
- 43.A newly formed limited liability company (LLC) applying for a CSLB contractor's license must obtain, in addition to the standard $25,000 contractor's bond, which additional bond specific to LLCs?Business Organization and Licensing
- 44.A contractor lets his license go inactive due to a temporary lack of work but continues to pay his renewal fees on time every two years. Which statement best describes his legal status?Business Organization and Licensing
- 45.A crew installs a shoring (support) system in a deep trench as excavation proceeds. Per Cal/OSHA excavation standards, in what general order must the support system be installed and later removed?Safety
- 46.A contractor's active license was issued on March 1, 2023. Under the standard CSLB renewal cycle, when must the license be renewed to remain active?Business Organization and Licensing
- 47.A drywall subcontractor never served a preliminary 20-day notice on a private commercial project. What is the most likely consequence?Insurance and Liens
- 48.Who has the legal authority to establish the prevailing wage rates that must be paid on a public works project in a given locality?Public Works
- 49.A contractor plans to submit a bid on a city street resurfacing project. Before bidding, what must the contractor first do regarding the Department of Industrial Relations (DIR)?Public Works
- 50.A contractor's original contract has a price of $50,000 with an estimated direct cost of $40,000. A change order adds $10,000 in additional direct costs, and the contractor bills the customer $12,000 for the change order. What is the overall gross profit margin for the completed project including the change order?Business Finances