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CONTRACTORS STATE LICENSE BOARD LICENSE EXAMINATION STUDY GUIDE LAW AND BUSINESS Content of the Examination The Law and Business Examination is divided into eight major sections: 1. Business Organization (10%) Company organization Project organization 2. Business Finances (15%) Cash management Budget and planning Taxes Financial reporting 3. Employment Requirements (12%) Employment regulations Evaluation and record-keeping Payroll 4. Bonds, Insurance, and Liens (10%) Bonds Workers’ compensation insurance Liens and other remedies Other insurance 5. Contract Requirements and Execution (23%) Bidding Cost control Contracts Payments 6. Licensing Requirements (8%) Business license Contractor’s license Activity regulation
7. Safety (15%) Training and reporting requirements General safety Hazardous/unknown materials
8. Public Works (7%) Prevailing wage requirements Bonding requirements Insurance requirements *Percentages are approximate* Test Site Policy This is a closed-book examination. No reference materials may be used during the examination. All materials brought to the examination site must be left in an unmonitored area at your own risk.
Test Strategy This is a multiple-choice examination with four choices per question. Examination questions are written to provide only one BEST answer. Some questions require mathematical computation. A calculator will be provided.
There is no penalty for guessing. If you are unsure about a particular question, it is better to try to answer the question than to leave the question blank. Plenty of time is provided to answer all examination questions, so be sure to read each question and its four choices completely and carefully before selecting the BEST possible answer to the question.
Sample Questions Below are three typical examination questions. The correct answer is underlined. 1. What information must be included in a stop notice? a. The kind of labor, services, equipment, or materials furnished or agreed to be furnished b. The construction loan terms, interest rate, and deadline for project completion c. The type of zoning, setback, and lot coverage limitations on the permit d. The type of asbestos, toxic fumes, or hazardous materials found 2. Within how many days must an “agreement to arbitrate” be returned by the participants after being mailed by CSLB’s Registrar? a. Within 7 calendar days b. Within 10 calendar days c. Within 14 calendar days d. Within 30 calendar days 3. According to California license law, how often must safety meetings be held? a. At least once a week b. At least every 10 working days c. At least every 15 working days d. At least once a month *All questions are written and reviewed by licensed contractors who are actively working in the trade*
California Employer’s Guide (DE44). California Employment Development Department. PHONE: (888) 745-3886 INTERNET: www.edd.ca.gov/FORMS California Labor Code. INTERNET: http://leginfo.legislature.ca.gov/faces/ codes.xhtml Contractors Guide to Business, Law and Project Management. National Association of State Contractors Licensing Agencies (NASCLA). PHONE: (623) 587-9354 INTERNET: www.nascla.org Publication 15 (Circular E) Employer’s Tax Guide. Internal Revenue Service. PHONE: (800) 829-1040 INTERNET: www.irs.gov/publications/p15/index.html Standard Specifications for Public Works Construction (Green Book). BNI Building News. PHONE: (888) 264-2665 INTERNET: www.bnibooks.com State of California General Industry & Electrical Safety Orders (Cal/OSHA) and State of California Construction & Electrical Safety Orders (Cal/OSHA). 2015. California Code of Regulations, Title 8. Mancomm. PHONE: (877) 626-2666 INTERNET: www.mancomm.com VIEW ONLINE: www.dir.ca.gov/dosh/LawsAndRegulations.htm *Publisher information is current as of 4/17*
Publisher information for reference books and code is provided below. Other sources for reference books may be found online. California code books can be viewed online: www.bsc.ca.gov California Contractors License Law and Reference Book. Matthew Bender & Company, Inc. PHONE: (800) 223-1940 INTERNET: www.lexisnexis.com