CSLB Law & Business Exam practice questions
240 free questions with answers and explanations.
- 101.A nonprofit organization hires a licensed contractor to perform $850 worth of minor repair work on a public library restroom, funded entirely by public funds. Based on the general prevailing wage threshold under Labor Code §1771, is this project subject to prevailing wage requirements?Public Works
- 102.A city awards a public works contract for a new fire station. Under Labor Code §1773.3, what must the city do shortly after awarding the contract?Public Works
- 103.A licensed contractor's brother-in-law works part-time in the office answering phones and occasionally visits job sites to drop off supplies, but never discusses contract terms or prices with customers. Must he register as a home improvement salesperson (HIS)?Business Organization and Licensing
- 104.A general contractor is found to have willfully failed to pay the correct prevailing wage rate to five laborers over a 20-day period on a public works project. Under Labor Code §1775, what is the maximum civil penalty the Labor Commissioner may assess per day, per underpaid worker, for a willful violation?Public Works
- 105.A contractor fails to provide the homeowner with the required copies of the Notice of Cancellation at the time the contract is signed. What is the legal effect on the homeowner's right to cancel?Contract Requirements and Execution
- 106.A general contractor oversees a residential remodel site. A subcontractor's employee is injured due to an unshored trench hazard the subcontractor itself created. Even though the GC's own employees were never exposed to the hazard, Cal/OSHA cites the general contractor as the 'controlling employer.' What is the legal basis for this citation under the multi-employer worksite doctrine?Safety
- 107.A homeowner calls a contractor and asks the contractor to come immediately to fix a broken window latch. The contractor arrives, the homeowner signs a service and repair contract for $180, and the work is completed during that same visit. Which statement best describes the homeowner's cancellation rights?Contract Requirements and Execution
- 108.Under California law, what is the maximum down payment a contractor may collect on a home improvement contract before beginning any work?Contract Requirements and Execution
- 109.When a home improvement contract is signed, how many copies of the Notice of Cancellation must the contractor provide to the homeowner?Contract Requirements and Execution
- 110.A sole proprietor contractor deposits customer payments directly into a personal checking account that is also used for household expenses. What is the primary business risk of this practice?Business Finances
- 111.A person plans to go door-to-door soliciting and selling home improvement contracts on behalf of a licensed contractor. Before doing so, what must this person do under California law?Business Organization and Licensing
- 112.A contractor excavates a trench 7 feet deep entirely within a formation of stable rock. Under Cal/OSHA excavation standards, what protective system requirement applies?Safety
- 113.A sole owner applying for a C-10 electrical contractor license asks about the bond required before the license can be issued. What is the standard contractor's license bond amount required by the CSLB for most licensees?Business Organization and Licensing
- 114.A framing subcontractor completed work on a public school project 18 months ago. A DIR compliance officer now requests the certified payroll records for that project. Under Labor Code §1776, how long must the subcontractor have retained these records?Public Works
- 115.A contractor's written vacation policy states that any unused vacation time is forfeited if not taken by December 31 each year. An employee is terminated in November with 40 hours of accrued but unused vacation. Under California law, what is the employer's obligation regarding that vacation time?Employment Requirements
- 116.A California contractor purchases $5,000 in materials from an out-of-state supplier who does not charge California sales tax. What is the contractor's obligation regarding this purchase?Business Finances
- 117.A contractor determines that a customer's $6,000 invoice for completed work is uncollectible and writes it off as bad debt. What is the effect of this write-off on the contractor's income statement?Business Finances
- 118.When preparing a home improvement contract, in what form must the Notice of Cancellation be provided to the homeowner at the time of signing?Contract Requirements and Execution
- 119.A contractor has $60,000 in monthly overhead expenses and estimates 3,000 direct labor hours will be worked that month. To accurately allocate overhead to each job using job costing, what overhead rate per labor hour should be applied?Business Finances
- 120.A home improvement contract contains a mandatory arbitration clause. For this clause to be enforceable under California law, how must it be presented in the contract?Contract Requirements and Execution
- 121.An employer paid wages to employees during the second calendar quarter (April through June). Under EDD requirements, by what date must the employer file the quarterly wage and withholding report (DE 9)?Employment Requirements
- 122.A contractor terminates an employee's employment on a Tuesday afternoon without prior notice to the employee. Under California Labor Code Section 201, when must the employer pay all wages due to the terminated employee?Employment Requirements
- 123.A flooring company classifies an installer as an independent contractor. The installer performs flooring installation, which is exactly the type of work the company sells to its customers. Under the ABC test, which prong is most clearly failed?Employment Requirements
- 124.A residential contractor wants to comply with Cal/OSHA requirements for workplace safety. What is the primary purpose of a written Injury and Illness Prevention Program (IIPP)?Safety
- 125.Under California law, the Notice of Cancellation form provided with a home improvement contract must be designed so that it can be:Contract Requirements and Execution
- 126.A homeowner calls a contractor to repair a leaking pipe. The parties sign a service and repair contract for $600 that covers only repair of the existing plumbing, with no alterations to the structure. Which statement about this contract is correct?Contract Requirements and Execution
- 127.The Labor Commissioner finds that a contractor willfully misclassified several employees as independent contractors, with no prior pattern of such conduct. Under California Labor Code Section 226.8, what is the civil penalty range per violation?Employment Requirements
- 128.A contractor receives $50,000 from a bank loan and uses $20,000 of it to purchase new equipment. On the Statement of Cash Flows, how should these two transactions be classified?Business Finances
- 129.A landscaping contractor requires an employee to use his personal truck to haul tools and materials between job sites but does not reimburse him for fuel, mileage, or vehicle wear. Under Labor Code Section 2802, what is the employer's obligation?Employment Requirements
- 130.A contractor's income statement shows a $20,000 profit for the month, but the business checking account balance decreased by $5,000 during that same period. What is the most likely explanation?Business Finances
- 131.A contractor has a homeowner sign a home improvement contract for a bathroom remodel. Under California law, when must the contractor provide the homeowner with a completed copy of the signed contract?Contract Requirements and Execution
- 132.A homeowner signs a home improvement contract for a $30,000 kitchen remodel on March 1. On March 15, after work has begun, the contractor and homeowner sign a written change order adding $4,000 of additional cabinetry work due to a design change requested by the homeowner. Does the homeowner have a new three-day right to cancel triggered by signing the change order?Contract Requirements and Execution
- 133.A contractor plans to excavate a trench that will reach 5 feet in depth for a sewer line installation. Before beginning the excavation, what must the contractor first obtain?Safety
- 134.A qualifying individual already serves as the RMO for Company A. She wants to also qualify Company B, a separate corporation with no ownership overlap with Company A. Under CSLB rules, what happens?Business Organization and Licensing
- 135.A licensed sole proprietor contractor dies unexpectedly while several jobs remain unfinished. Under CSLB rules, what is the general status of the license and the options for the personal representative of the estate?Business Organization and Licensing
- 136.A general contractor hires three subcontractors to work simultaneously on a large remodeling project. One subcontractor's crew is exposed to hazardous chemicals brought onto the site by another subcontractor. Under Cal/OSHA's Hazard Communication Standard, who bears responsibility for ensuring the exposed crew has access to relevant hazard information?Safety
- 137.A contractor enters into a service and repair contract with a homeowner for $900 to fix a broken water heater. Which of the following must the written contract include?Contract Requirements and Execution
- 138.A retail construction supply worker earns California's state minimum wage of $16.00 per hour. She works a split shift totaling 8 hours, separated by a several-hour unpaid, non-working gap that is not a bona fide meal period. Her total pay for the day is $128.00. Under the Wage Order split-shift rules, what additional amount, if any, must the employer pay?Employment Requirements
- 139.A contractor is excavating a trench that will reach 22 feet in depth to install a large storm drain pipe. What additional requirement applies beyond standard shoring for shallower trenches?Safety
- 140.A contractor is excavating a trench and piling excavated soil (spoil) near the edge. Per Cal/OSHA regulations, spoil piles and other materials must be kept back at least how far from the edge of the excavation?Safety
- 141.A trench excavation on a job site is 6 feet deep. According to Cal/OSHA excavation standards, what safety measure is generally required?Safety
- 142.A contractor wants to obtain a Class B General Building license. Under CSLB rules, what must the contractor be able to demonstrate to qualify for this classification?Business Organization and Licensing
- 143.A contractor collects the maximum allowable down payment of $900 on a $9,000 home improvement contract (10% of the price). During construction, the parties sign a written change order adding $3,000 of unforeseen work, raising the total contract price to $12,000. May the contractor collect an additional down payment based on the increased price?Contract Requirements and Execution
- 144.A sole proprietor with no employees applies for a C-10 electrical contractor license with CSLB. Regarding workers' compensation insurance, what must the applicant do?Employment Requirements
- 145.A contractor's records show beginning materials inventory of $12,000, materials purchased during the month of $38,000, and ending materials inventory of $9,000. What is the cost of materials used for the month?Business Finances
- 146.A property owner asks a roofing contractor for proof of insurance before allowing work to begin. The contractor provides a certificate of insurance listing the owner as a certificate holder. Later, a worker is injured and the owner is sued; the owner discovers the certificate alone does not extend policy coverage to protect the owner. What should the owner have requested instead?Insurance and Liens
- 147.An employee works 8 hours per day for 7 consecutive days within a single workweek, with no day exceeding 8 hours. How must the employee be paid for the 8 hours worked on the seventh consecutive day?Employment Requirements
- 148.A contractor buys materials for $100 and sells them to the customer for $150. What is the markup percentage based on cost?Business Finances
- 149.A contractor wants a 20% gross profit margin on a job. What markup percentage should be applied to the direct cost to achieve that margin?Business Finances
- 150.A mechanical subcontractor employs journeyman workers on a public works HVAC installation and wants to also use apprentices. Under California apprenticeship requirements for public works, what is the standard ratio of apprentice hours to journeyman hours that may generally be used?Public Works