California Law & Business

A contractor and homeowner agree by text to a $7,500 bathroom renovation and plan to write the scope after demolition. What contract requirement applies before work?

A contract balance is $18,900. Approved credits total $1,250 and approved additions total $2,600. What revised balance should be tracked?

A signed change order adds $4,250 of cabinet work plus a 12 percent approved markup. What is the change order total?

A contract includes a $7,500 tile allowance. The owner selects tile costing $8,650 before installation. Ignoring markup and tax because the contract says none apply, what allowance change should be documented?

A homeowner signs a $12,300 exterior door and siding contract. What is the largest down payment allowed before work starts?

An allowance for tile is $6,200. The owner selects a tile package that costs $5,450, and the contract says no markup applies to allowance credits. What adjustment should be documented?

A contractor has performed $18,400 of contract work. The owner has already paid $12,000. Ignoring retention, what is the most additional progress payment that keeps total paid at work value?

A homeowner signs a $9,600 home improvement contract. What is the largest down payment allowed before work starts?

An $18,400 California patio-enclosure home improvement contract is subject to the ordinary down-payment cap, with no applicable exception and no finance charges. What maximum down payment is allowed?

A unit-price change adds 44 square feet of patching at $32 per square foot. What amount is added?

A homeowner approves a $2,400 deletion and a $1,150 addition at the same time. What is the net contract adjustment?

A contract sets delay damages at $150 per calendar day. If an unexcused delay is 5 days, what amount is calculated?

An appliance allowance is $4,800. The owner selects appliances costing $3,900 with no markup on credits. What adjustment is due?

A homeowner signs a $6,800 home improvement contract. What is the largest lawful down payment before work starts?

A cabinet allowance is $9,500. The owner selects a package costing $10,275, with no markup on allowance overages. What adjustment is needed?

A $37,500 adjusted contract is 55 percent complete. If prior payments total $12,800, what additional progress payment reaches current work value?

A cost-plus change has $3,480 documented cost and a 12 percent fee. What total should be shown?

A crew spends 27 hours on documented extra work at $88 per hour. What labor amount should be shown before other charges?

A homeowner signs an $8,900 home improvement contract for a kitchen remodel before work starts. What is the largest lawful down payment?

A unit-price change adds 68 square feet of siding repair at $47 per square foot. What amount should be added?

In the ADU conversion file, a time-and-material change uses 23 labor hours at $86 per hour plus $740 in materials. What total should be shown before other agreed charges?

In the kitchen remodel file, approved deletions total $4,275 and approved additions total $3,640. What is the net contract adjustment?

In the tenant-improvement file, a contract price is $34,200. Approved additions are $4,850 and approved credits are $2,375. What revised price should be tracked?

In the casework package file, a cost-plus change has $4,250 documented cost and a 13 percent fee. What total should be shown?

In the casework package file, a $58,000 adjusted contract is 50 percent complete. If prior payments total $14,750, what additional progress payment reaches current work value?

In the tenant-improvement file, a $12,500 home improvement contract requires a $1,250 initial payment before work starts. What is the problem?

A homeowner signs an $8,900 home improvement contract. What is the largest lawful down payment before work starts?

The deck repair selection sheet carries a $7,800 allowance, but the owner-selected item costs $7,120 with no markup on allowance credits. What allowance credit should be documented?

For an approved change, $6,400 in direct cost receives an 18 percent signed markup. What total price belongs on the change order?

In the garage conversion file, a delay clause sets $165 per calendar day. If an unexcused delay is 12 days, what amount is calculated?

A contractor with a workers' compensation exemption adds a part-time office employee. What should be addressed?

A helper is called an independent contractor but uses company tools, follows company hours, and reports to a foreman. What is the risk?

An employee quits without advance notice after a morning shift. Which payroll issue should the office review?

Employees report for a scheduled shift but are sent home after 20 minutes because materials did not arrive. What wage issue may apply?

A payroll processor files returns for the company, but a tax deposit is missed. Who retains the underlying employer compliance responsibility?

A contractor pays employees whenever project cash comes in, with no established paydays. What should be established?

An employee works 5.75 hours and both parties discuss waiving the meal period. What key limit should be checked?

A contractor has employees but keeps only a workers' compensation exemption certificate on file. What is the compliance problem?

A wage statement lists hours but omits deductions and pay-period dates. What documentation area needs correction?

A worker is hurt unloading materials, and the foreman says to skip the injury paperwork. What compliance area is implicated?

A new nonexempt employee starts without a written notice of pay rate and employer information. What is missing?

A mandatory morning safety huddle is held before clock-in. What should be corrected?

Payroll files are kept only on a foreman's phone and disappear when the phone is replaced. What should be checked?

Payroll deducts the cost of damaged material from a worker's check without reviewing wage rules. What should be reviewed?

A sole proprietor who previously had no employees puts one helper on payroll. Which coverage obligation now requires immediate verification?

A remodel laborer is scheduled for a 12-hour shift at $26 per hour. Using only CA daily overtime, what gross pay is due?

A wage notice lists the wrong legal employer name after a company change. What should be corrected?

A worker buys required job-specific safety glasses for the employer's project. What should be reviewed?

Workers are told to estimate hours from memory at the end of the week. What is the correct practice?

Payroll is closing a 10-hour day for a nonexempt worker paid $40 per hour. What daily gross pay should be entered?

A contractor pays workers in cash but gives no wage statements. What is missing?

A wage statement lists gross and net pay but omits total hours worked. What should be corrected?

A contractor with a workers' compensation exemption hires a part-time helper for one weekend. What should be addressed?

A person is labeled a subcontractor but works under the company's daily schedule and supervision. What is the risk?

A supervisor asks payroll to reduce a timecard to match the estimate instead of actual work. What should payroll do?

A contractor pays workers by check but does not issue itemized pay statements. What is missing?

A payroll clerk says undocumented cash advances can be deducted from final wages. What should be reviewed first?

A supervisor asks workers to arrive 20 minutes early to load company tools before clocking in. What should be corrected?

A worker earns $33 per hour. What is the double-time rate?

A nonexempt laborer works 13 hours in one day at $28 per hour. Ignoring weekly overtime, what is the day's gross pay?

Cash is $52,500 and monthly burn is $17,500. How many months of runway are available?

A balance sheet lists assets of $310,000 and liabilities of $185,000. What is owner's equity?

A customer invoice of $4,000 has a stated late charge of 1.5 percent. What late charge is added?

A contractor wants a 25 percent gross margin on a job with estimated cost of $60,000. What selling price gives that margin?

A completed project sold for $150,000 and had total cost of $126,000. What gross margin percentage did the project earn?

A bid includes 320 direct labor hours, and the company's overhead allocation rate is $18 per direct labor hour. How much overhead should be included?

A project has contract revenue of $92,000 and direct job cost of $70,500. What is the gross profit?

A company has current assets of $96,000 and current liabilities of $64,000. What is its current ratio?

A contractor has current assets of $88,000, inventory of $14,000, and current liabilities of $37,000. What is the quick ratio?

A direct labor payroll is $22,000. The employer's added payroll burden for estimating is 18 percent. What total labor cost should be used?

A CA contractor buys $14,000 of taxable materials for a lump-sum job, and the applicable tax rate in the problem is 8.25 percent. What tax amount should be budgeted on those materials?

A contractor pays a $2,500 tax bill by credit card, and the problem states a 2.3 percent service fee. What is the service fee?

A balance sheet shows cash of $52,000, accounts receivable of $74,000, equipment of $120,000, accounts payable of $38,000, and a loan payable of $96,000. What is total equity?

An accounts receivable aging report shows $18,000 current, $9,500 at 31-60 days, and $6,500 over 60 days. What total receivables are outstanding?

Using the same $180,000 contract and 10 percent retention, if gross earned is $90,000, what net billing is allowed before prior payments?

A job's original budget is $95,000. Approved change orders add $12,000. Forecast cost is now $101,000. Compared with the adjusted budget, what is the projected variance?

A contractor pays a supplier invoice of $6,800. What immediate effect does that payment have on cash?

A contractor's direct cost is $72,000 and bid price is $90,000. What markup on cost was used?

A project shows estimated revenue of $130,000 and expected net profit of $15,600. What net profit margin is expected?

In the kitchen remodel file, a bid has direct labor of $22,400, materials of $18,600, and equipment rental of $4,000. If the contractor adds 18 percent markup on direct cost, what is the bid price?

In the bathroom addition file, a contractor wants a 30 percent gross margin on a job with estimated cost of $77,000. What selling price gives that margin?

In the ADU conversion file, a completed project sold for $186,000 and had total cost of $151,125. What gross margin percentage did the project earn?

A bid has direct labor of $18,000, materials of $12,500, and equipment rental of $3,500. If the contractor adds 20 percent markup on direct cost, what is the bid price?

A salesperson earns a 3 percent commission on $220,000 of sold work. What commission is accrued?

A contractor has monthly fixed overhead of $42,000. Each average service job contributes $3,500 toward overhead after direct costs. How many such jobs are needed to break even for the month?

In the flooring upgrade file, a CA contractor expects $88,000 of cash receipts in August and $73,400 of cash disbursements. If beginning cash is $19,500, what ending cash is projected?

A job uses 330 labor hours and overhead is allocated at $19 per labor hour. What overhead is allocated?

In the casework package file, a balance sheet lists assets of $240,000 and liabilities of $146,000. What is owner's equity?

Cash is $22,000, receivables are $51,000, inventory is $18,000, and current liabilities are $50,000. What is the quick ratio?

A job is 40 percent complete on a $120,000 contract, but only $36,000 has been billed. What earned value has not yet been billed?

A required contractor bond terminates with no replacement on file. What can happen to license status?

A covered claim is $18,500 and the deductible is $2,500. What amount remains after the deductible in this study problem?

A private-work study problem gives a 90-day lien-recording period after completion. Completion is day 42. What outside day results?

Before making a progress payment to a subcontractor who may have lien rights, what release is most appropriate?

A supplier first furnishes materials on day 1 and serves preliminary notice on day 19. What is the lien-preservation effect of that timing?

A certificate of insurance names a policy period that expired last month. What should be requested before work continues?

An owner receives a preliminary notice from a supplier the owner has never met. What is the best meaning of the notice?

For a direct contractor, a valid CA notice of completion can shorten the lien recording deadline to 60 days. If notice is recorded on April 10, what date is 60 days later?

A material supplier furnishes windows to a CA remodel through a subcontractor. What notice normally preserves the supplier's lien rights?

A subcontractor is paid $6,400 for a progress draw. What amount should the unconditional progress release match after payment clears?

For many CA lien claimants other than the direct contractor, a valid notice of completion can shorten the lien recording deadline to 30 days. If notice is recorded on May 5, what date is 30 days later?

A project is completed on March 1 with no notice of completion. What date is 90 days after completion?

Which payee line best matches CSLB's joint-check lien-prevention method?

A contractor has $1,000,000 liability coverage and must meet a $2,000,000 aggregate requirement. What additional aggregate limit is needed?

A claimant signs a conditional release for $12,000 but is paid only $9,500. What amount is actually supported by payment?

A supplier's preliminary notice protects materials from day 18 forward. The supplier delivered $4,200 before day 18 and $9,600 from day 18 forward. What amount is protected by that notice timing?

A final payment has cleared and the claimant has been fully paid. Which release is the correct closeout document?

A supplier's protected invoices total $16,400. The owner already paid $11,750 by joint check. What unpaid protected amount remains?

A claimant signs a conditional release for $18,000, but only $15,250 actually clears. What paid amount is supported?

If no valid notice of completion is recorded, what broad deadline should CA lien claimants watch after completion?

Which insurance is most directly aimed at third-party bodily injury or property-damage claims against the contractor?

A contractor's employee is injured while lifting drywall. Which insurance is most directly involved?

A general liability premium is allocated by revenue. If annual premium is $24,000 and a job is 8 percent of annual revenue, what insurance cost is allocated?

A certificate of insurance is requested before work begins. What is the best use of the certificate?

A contract requires a $2,000,000 aggregate limit, and the subcontractor's policy shows $1,500,000. What is the shortfall?

A contractor wants to save premium by canceling workers' compensation coverage while employees remain on payroll. What is the compliance issue?

An owner receives a preliminary notice from a second-tier supplier. What should the owner understand?

A conditional release is signed for $24,000, but only $21,750 clears. What paid amount is supported?

A subcontractor provides only a workers' compensation certificate, but the subcontract also requires general liability coverage. What is missing?

A subcontractor wants final payment but has unpaid lower-tier suppliers. What payment control should the prime consider?

A Class B contractor includes water-well drilling classified as C-57 in the overall project. What is the correct licensing path?

A prime contractor plans to use an unlicensed subcontractor for cabinet installation work requiring a license. What should the prime do?

A registered home improvement salesperson leaves one contractor and begins selling for another. What must be checked?

A contractor licensed only as Class B wants to self-perform a C-10 electrical-only service call with no other trades. What is the licensing concern?

A quote has $520 labor and $560 materials. How far above the $1,000 minor-work threshold is the aggregate price?

A license expires in 90 days, and office policy requires renewal work 45 days before expiration. How many days remain before the policy trigger?

A licensed contractor plans to bid a job outside its classification and hire no subcontractor for that scope. What is the best compliance action?

An unlicensed person says the project is exempt because labor is $600, but materials are $550 and the person will furnish both. What is the aggregate price issue under §7048?

A licensed contractor's truck signs advertise 'kitchen and bath remodeling' but show no CSLB license number. What is the issue?

An unlicensed person completes a job that required a license and then sues for the unpaid contract balance. What does B&P §7031 generally do to that claim?

An unlicensed person completes work requiring a license and sues for $8,200 unpaid balance. What does §7031 generally do?

A license application package is missing fingerprints where required. What is the issue?

A repeat unlicensed-contracting comparison uses greater of 20 percent of contract price or $5,000. For $21,000, what controls?

A Class B contractor wants to take a contract for painting only, with no other unrelated trade and no C-33 license. What is the best licensing answer?

A $900 minor repair is advertised by an unlicensed person, and the ad clearly states 'not licensed.' The person hires a helper to assist on the job. What happens to the §7048 exemption?

An unlicensed person offers to do a $1,000 fence repair that otherwise needs no permit and is not part of a larger job. Does the §7048 minor-work exemption apply?

A contractor prints a home improvement contract without the contractor license number. What should be corrected before signing?

An LLC contractor needs a $100,000 LLC employee/worker bond and a $25,000 contractor bond. What total bond amount is represented by those two bonds?

A license applicant has 4 years of qualifying journey-level experience in the classification during the required lookback period. What application element does that support?

A $25,000 contractor bond is required, and a separate Bond of Qualifying Individual is also required at $25,000. What total bond amount is represented by both bonds?

An unlicensed person contracts for a $9,000 repair that requires a contractor license. Under B&P §7028, what kind of violation is unlicensed contracting?

A repeat unlicensed-contracting offense involved payments of $16,000. Under the 20 percent or $5,000 comparison, which amount controls as the greater figure?

A contractor's license lookup shows the license is suspended. What is the safest contracting decision?

A corporation signs a CA construction contract, but only the owner's old sole-proprietor license is active. What is the licensing issue?

A contractor uses another contractor's license number in advertising because the other contractor is a friend. What is the problem?

A contractor advertises a former license number after the license expired. What should the contractor do before advertising new work?

A subcontractor's license classification does not cover the trade scope being subcontracted. What should the prime do before award?

A contractor needs the current $25,000 contractor bond, but the file shows only $18,000. How much additional bond amount is needed?

A Class B contractor subcontracts electrical work to a properly licensed C-10 subcontractor as part of a multi-trade building project. What is the licensing result?

A Responsible Managing Employee qualifier is listed for a company but does not actually exercise responsible supervision or control. What is the licensing concern?

A contractor has verbal safety rules but no assigned responsibilities, inspection process, correction tracking, or training records. Which required program is deficient?

Fourteen outdoor workers have a seven-hour shift. Water is not continuously supplied and no replenishment will occur during the shift. At one quart available per employee per hour, how much must be supplied for this calculation?

Management learns of a reportable serious injury at 2:00 p.m. If the standard outside limit is 8 hours, what is the latest report time?

A 150-foot trench uses one access point per 25 feet in this study problem. How many access points are needed?

A spoil pile must be 24 inches from a trench edge, but it is 7 inches away. How much farther back must it move?

A serious injury becomes known to the employer at 7:15 a.m. If the outside reporting limit is 8 hours, what is the latest report time?

Twenty-two workers are exposed to high-noise chipping, and hearing protection is issued to 16. How many more workers need protection?

A scaffold plank is damaged and visibly split. What should happen before use?

A portable tool cord has exposed conductors. What should happen before the tool is used?

Water accumulates in an excavation where employees are working. What is the best response?

A jobsite stores flammable liquid next to ignition sources and exits. What is the best correction?

During a high-heat day, a crew has no reliable way to contact emergency medical services. What procedure is missing?

A guardrail plan requires 28 sections, and 21 sections are installed. How many remain to be installed?

Rain changes the conditions inside an open excavation. What should occur before re-entry?

A worker loses an eye in a jobsite accident. How should the employer treat this under Cal/OSHA serious-injury reporting?

A high-heat observation method allows one supervisor to observe 20 or fewer employees. How many observation groups are needed for 38 employees?

A ladder working length is 32 feet. Using a 4-to-1 setup ratio, how far should the base be from the support?

A safety committee is used to satisfy IIPP communication. How often must it meet at minimum under the committee option?

Seventeen outdoor workers need one quart of water per worker per hour for a 6-hour shift. How many quarts are needed?

A trench is 110 feet long, and the problem's access rule requires a ladder within 25 feet of workers. How many access points are needed?

A contractor conducts weekly safety inspections but keeps no written results. What IIPP support is weak?

Outdoor temperature is 79 degrees Fahrenheit and an employee asks for shade. What should the supervisor do?

A project lasts 55 working days and toolbox meetings are planned every 10 working days. Rounding up, how many meetings are needed?

A new worker is handed a powder-actuated tool without authorization or instruction. What is missing?

A worker is hospitalized as an inpatient after a scaffold fall, other than for observation or diagnostic testing. What reporting duty applies?

A crew grinds concrete overhead without eye or face protection. What PPE is missing?

A personal fall arrest system is rigged so the worker could free fall more than 6 feet before arrest. What is the problem?

An imminent hazard cannot be immediately abated without endangering employees. What is the proper IIPP response?

A trench is 125 feet long, and access is required within 25 feet under the problem rule. How many access points are needed?

An indoor hot-work area has 7 employees for a 6-hour shift. Using one quart per employee per hour, how many quarts of water are needed?

Training fund contribution is $0.95 per covered hour for 140 hours. What contribution is due?

A public works worker performs 8 straight-time hours at a prevailing wage package of $62. What is the straight-time wage package for that day?

DIR guidance says DAS 142 should be submitted at least 3 business days before apprentices are required. If apprentices are needed Friday, what is the latest business day to submit, assuming no holidays and counting backward three business days?

A classification's prevailing wage package is $48 base plus $19 fringe. For 6 straight-time hours, what total package amount is due?

A public works subcontract has $75,000 in progress payments. Under a 5 percent retention cap, what total retention would be withheld?

A repair contract is $26,200. How far above the $25,000 small-project repair threshold is it?

A DAS 142 apprentice request must be sent 72 hours before apprentices are needed. If apprentices are needed on day 10, by what day should the request be sent?

A public works progress payment is $340,000. If 5 percent retention applies, what retention amount is withheld?

A public works claimant is owed $18,200 and later receives $5,000. What unpaid amount remains for payment-remedy analysis?

A public works project has 18 certified payroll records, and 16 have been reviewed without discrepancy. How many remain to review?

A project has 160 covered hours and a stated training contribution of $0.65 per hour. What training contribution is due?

An owner-operator has a $22,000 contract, $8,500 materials, $6,200 subcontract cost, and $2,300 overhead. What estimated own-labor amount remains?

Cash wage is $58 and qualifying fringe is $14. What total package is shown?

A worker has 8 hours at $64 and 2 overtime hours at a stated $96 package. What total package pay is due?

The required package is $72, but the paid package is $69 for 30 hours. What underpayment is indicated?

A study ratio requires 1 apprentice per 4 journeypersons or fraction. How many apprentices are needed for 17 journeypersons?

Completion occurs on day 75, and undisputed retention must be released within 60 days. What is the outside release day?

An owner-operator contract is $30,000 with $11,000 materials, $7,500 subcontract cost, and $3,500 overhead. What estimated own-labor remains?

A progress payment is $186,000 with 5 percent retention. What retention is withheld?

A contractor underpays training contribution by $0.40 per hour for 95 hours. What contribution shortage exists?

A public entity withholds 10 percent retention on a normal public works progress payment with no complex-project finding. What is the issue?

A certified payroll report shows only total pay but no hours or classification detail. What is the issue?

An emergency repair is paid by a public agency and exceeds $1,000. What should the contractor remember?

A public agency wants retention higher than 5 percent because a project is unusually complex. What must be true before bid?

A subcontractor believes certified payroll is unnecessary because the prime contractor already submits its own payroll. What is correct?

A county project uses both county money and private donations to pay for building repairs. What should the contractor assume first?

A subcontractor's retention share is $12,000. There is a bona fide dispute valued at $2,000, and the contract allows withholding 150 percent of the disputed amount. How much should be released if that is the only holdback?

A contractor owes training contributions for 85 hours at $1.20 per hour. What contribution amount is due?

A public agency awards a $1,250 repair contract. Ignoring small-project registration relief, how far above the $1,000 prevailing-wage threshold is it?

A public maintenance contract is $14,000. Under DIR small-project guidance, what is the likely registration/eCPR result?