CSLB Law & Business ExamBusiness Organization and LicensingMedium
A licensed contracting corporation wants its Responsible Managing Employee (RME) to satisfy the CSLB's active involvement requirement. Which condition must the RME meet regarding hours worked?
- AThe RME has no minimum hour requirement as long as employed
- BThe RME must work at least 8 hours per week
- CThe RME must work at least 32 hours per week or 80% of the total hours the business operates
- DThe RME must work exactly 40 hours per week
Show answer & explanationAnswer & explanation
Correct answer: C. The RME must work at least 32 hours per week or 80% of the total hours the business operates
CSLB regulations require an RME to be a bona fide employee who is permanently and actively engaged in the business, working at least 32 hours per week or 80% of the total hours the business is in operation, whichever is less.
Why the other options are wrong
- A. CSLB does impose a minimum hours requirement for RMEs.
- B. Eight hours per week is far below the CSLB minimum standard.
- D. A fixed 40-hour requirement is not the standard used by CSLB.
RME Active Involvement
The Responsible Managing Employee must work at least 32 hours per week or 80% of business operating hours to satisfy CSLB active-engagement rules.
- RME must be a bona fide, permanent employee
- 32 hours/week or 80% of operating hours standard
- Failure to meet this can trigger CSLB investigation
Memory trick: '32 or 80 keeps the RME happy.'