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Questions and answers

What people ask about the California Contractor Law and Business Exam. Every answer comes from a Contractors State License Board (CSLB) page or document and says which one. Where CSLB publishes nothing, we say so instead of guessing.

LBExam is independent and not affiliated with the Contractors State License Board.

Questions answered
35
Topics
7

The exam paper itself

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What is on the exam, and how is it weighted?

The study guide divides the paper into 7 sections and gives each a share of it: Business Organization and Licensing 13 percent, Business Finances 15 percent, Employment Requirements 20 percent, Insurance and Liens 12 percent, Contract Requirements and Execution 21 percent, Public Works 5 percent, Safety 14 percent. The guide adds that the percentages are approximate. Practice on this site is split the same way, so a section that is a fifth of the paper is a fifth of a run.

How many questions are on the Law and Business exam?

CSLB does not publish a number, and it has never confirmed any of the counts that go around online. CSLB and the testing organization do publish this much about the paper: 3.5 hours to complete it, on a computer at a test center, one question on the screen at a time with the minutes left shown at the top, four choices with one best answer, some questions needing arithmetic, and no penalty for guessing.

Why no count is published, and what circulates instead

What score do I need to pass?

Not published. CSLB says the percentage needed to pass varies by exam, and a candidate may ask CSLB for it. The passing score report does not show the overall score. The failing one does, including the number of items answered correctly, and an unsuccessful candidate sees on the screen how they performed on each section of the exam.

Why CSLB publishes no pass mark, and what to aim at

Are the sets sold as actual exam questions real?

No. CSLB does not release test questions or answer keys to anyone, so nothing sold or posted as the real paper came from CSLB. Obtaining the qualifying examination, or any part of it, and providing it to somebody not authorized to have it is a misdemeanor, and so is sitting the exam in the name of another applicant. The testing organization adds that copying or communicating examination content, before, during or after a sitting, can invalidate a result, deny a license, and be prosecuted. The law the real questions are written from is public, and anyone can read it.

Is it open book, and is there a calculator?

Closed book. The study guide says no reference materials may be used during the examination. A calculator is provided for the questions that need arithmetic, and your own calculator is on the list of items you may not bring into the room.

Is there arithmetic on the law paper?

Yes. The study guide says some questions require mathematical computation and that a calculator will be provided. You use the one at the test center, because your own is on the list of prohibited items. CSLB does not publish how much of the paper is arithmetic, or which sections it falls in.

How hard it is, and how to study

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Do I need to pay for a prep school to pass this?

Nothing CSLB publishes says you do. In its own words, there are no schools or application preparation organizations that are affiliated with or agents of CSLB. That covers this site as much as any other. CSLB publishes a free study guide for each exam that names the reference material the questions are written from, and almost all of that is public law you can read for nothing. Course prices are the schools' own, and we cannot tell you what one is worth.

Is the Law and Business exam harder than the trade exam?

Depends on the trade paper. In FY 2022/23, the last fiscal year CSLB published overall pass rates by examination, the Law and Business exam passed at 57 percent. The B General Building paper passed at 44 percent that year and the A General Engineering paper at 60 percent, so the law paper sits among the trades. Everyone sits it and only some sit any given trade paper, so it is the one exam the whole candidate pool takes.

How many people sit this exam, and how many pass?

In FY 2022/23, the last fiscal year CSLB published overall pass rates by examination, 17,737 candidates sat the Law and Business exam and 57 percent of them passed. That is far more candidates than any other CSLB examination. The board counts attempts in a separate table: across all its examinations that year it recorded 24,536 first attempts, of which 71 percent passed, and 7,497 retakes, of which 37 percent passed.

Where do I get the free CSLB study guide?

From the Examination Study Guides page on cslb.ca.gov, which lists one guide per license classification and one for Law and Business, each a PDF download, and each with a Spanish edition beside it. The Law and Business guide lists the sections and the share of the paper each one carries, prints three sample questions, and names the reference material the questions are written against: the contractors license law, the Labor Code, the Financial Code, the Employment Development Department (EDD) employer guide, Internal Revenue Service (IRS) Circular E, the Department of Industrial Relations (DIR) Public Works Manual and the California Division of Occupational Safety and Health (Cal/OSHA) safety orders. Almost all of that is public law, and the parts of it we carry are on the sources page.

Applying, experience and the qualifier

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Do I have to pass two exams?

Usually, yes. An applicant for a contractor license passes the Law and Business exam and a trade exam for the classification applied for, unless the requirements for an exam waiver are met. The C-61 Limited Specialty classification has no trade exam at all. The Law and Business exam is the same paper whichever classification you are after, which is why more people sit it than any other CSLB examination.

Does a degree or an apprenticeship shorten the four years?

Partly. Acceptable training at an accredited school, or completion of an approved apprenticeship program under the Labor Code, counts as experience, but never for more than three of the four years, so at least one year has to be work. If you were the qualifier on a license in the same classification before, you can count that experience without the ten-year limit. The rule names no other credit. Anything else, an owner-builder permit or a degree in another field, is argued under the separate rule that lets the registrar accept comparable knowledge, training or experience.

What is an RMO, what is an RME, and what is the difference?

Both are the qualifying individual: the person whose knowledge and experience the license rests on, and who sits the exams. Which one applies depends on the entity. An individual qualifies in person or through a responsible managing employee (RME). A partnership qualifies through a general partner or an RME. A corporation qualifies through a responsible managing officer (RMO) or an RME. A limited liability company (LLC) qualifies through a responsible managing officer, manager, member or employee. An RME has to be a bona fide employee, permanently employed and actively engaged, which the statute defines as working 32 hours a week or 80 percent of the hours the business runs, whichever is less. Replacing a qualifier is its own application with its own fee, and the license is suspended, or the classification removed, if it is not done inside 90 days of the qualifier leaving.

Can I be the qualifier for a company I do not own?

Yes, and you carry the company. A qualifier is responsible for exercising supervision and control of the construction operations of the employer so the company complies with the license law, and an act or omission that is cause for discipline against the company is cause for discipline against whoever was its qualifier when it happened, whether or not they knew about it or took part. A qualifier who is neither the proprietor, a general partner nor a joint licensee files a bond of $25,000 of their own, on top of the contractor bond. One person may qualify no more than three firms in a one-year period, and only where the ownership or management overlap that the statute describes exists.

Can the Law and Business exam be waived?

Sometimes, and the statute says when. Under s. 7065(d) no examination is required of a qualifying individual who, in the five years before applying, personally passed the written exam for the same classification, or served as the qualifying individual for a licensee in good standing in it. Sections 7065.1 and 7065.2 set out further cases, one of which CSLB says the registrar has suspended. Reciprocity waives the trade exam. The Law and Business exam is waived only under ss. 7065(d), 7065.1 and 7065.2, so an applicant coming in through reciprocity sits it unless one of those three applies.

Every waiver section, and what each one covers

Does an out-of-state license get me out of this exam?

No, not on its own. Reciprocity waives the trade exam. The Law and Business exam is waived only under ss. 7065(d), 7065.1 and 7065.2, so an applicant coming in through reciprocity sits it unless one of those three applies. The registrar may accept the qualifications of an applicant licensed in a similar classification in a state that does the same for California licensees, and may waive the trade exam where that other license has been in good standing for the previous five years. CSLB adds that a reciprocity applicant still has the relevant work experience certified. Which states are in the program changes, so read the reciprocity page for the current list.

What happens if I miss the 90 days for the live scan?

CSLB says the application may be voided. Once an application is accepted, everyone named on it is mailed a Request for Live Scan Service form in three copies. The live scan operator keeps one, you keep one, and the third has to reach CSLB within 90 days of the day the packet reached you. An applicant outside California, or one with no live scan site in reach, is fingerprinted on hard cards instead, and CSLB says those take substantially longer to process.

  • CSLB's fingerprinting questions and answers

How long do I have to pass?

You have 18 months from the day the application is accepted. Miss that and the application is void, and a new one with new fees starts the clock again. Results last longer: they are good for five years, so if you pass one paper and fail the other you only retake the one you failed.

Sitting it

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How do I book a sitting, and how long is the wait?

You cannot book until CSLB has accepted your application and referred it for testing, and CSLB says nothing can be prescheduled before that. Once it is referred, a Notice to Schedule for Examination is mailed to you, and from there you pay and book directly with PSI, online or by phone. As for the wait, the board reported an average of 201 days in FY 2022/23 from the day an application is posted as complete to the day the license is issued, counting examination and waiver applications together, and it posts current processing times on its own site. Two clocks are fixed: 18 months to pass both exams, and 90 days to get the live scan form back.

Can I sit both exams on the same day?

Yes. CSLB says each exam is a separate fee and the two can be scheduled on the same day or at different times, whichever suits you. Both are booked through PSI once the application has been referred for testing, and each one runs its own 3.5 hours.

  • CSLB's Examination FAQ

Where do I sit it?

At a PSI test center, on a computer. PSI runs centers across California and one in Wilsonville, Oregon, open Monday to Saturday. The Law and Business exam travels further than the trade paper does: CSLB lists it as available in eighteen other states as well, while the trade exam is only sat in California or Oregon. There is no online option.

  • CSLB's Examination FAQ

What do I bring, and what is banned?

One valid, unexpired, government-issued photo identification, in the name the application is in. Arrive without it and it counts as a missed appointment. The banned list runs long: phones, calculators, notes, reading material, food and drink including water, hats, sunglasses, and sweaters or sweatshirts with pockets. The testing organization bans watches and other timekeeping devices too.

  • CSLB's Examination FAQ
  • Licensing Examination Information Guide (PSI), p. 8

Can I skip a question and come back to it?

Nothing published describes a flag button or a review screen for this paper. CSLB does say you can type a comment about a question during the exam, any time before it is scored. The candidate guide says one question appears on the screen at a time with the minutes remaining shown at the top, and that the tutorial before the exam lets you practice answering questions and reviewing your answers. The study guide adds that there is no penalty for guessing, so a guess beats a blank.

Can I sit the exam in Spanish?

Yes. CSLB publishes Spanish versions of ten exams commonly taken by candidates, and the Law and Business exam is one of them. If you ask for a translator for an exam that has a Spanish version, you are required to sit the Spanish version instead. For an exam with no Spanish version, a translator approved by CSLB in advance may read the paper to you. Approval takes weeks, so ask early.

  • CSLB's Examination FAQ

Can I move my appointment?

Yes, without losing the fee, as long as PSI has the cancellation two days before the appointment. Do it on the PSI website or by speaking to somebody there. A voicemail or an email to CSLB or PSI does not cancel anything. You lose the fee if you do not turn up, arrive after the start time, or turn up without the right identification.

  • CSLB's Examination FAQ

Results and retakes

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When do I find out whether I passed, and what does the report say?

Before you leave the test center, on a printed report. A pass report is not a license; what follows is a Bond and Fee letter in the mail with the issuance requirements on it. A pass report does not show your score either. A fail report does, broken down by section into how many questions you answered correctly and incorrectly, against the same sections the study guide lists. CSLB does not release test questions or answer keys to anyone. You can ask for an Examination Appeals Form by email, and CSLB says it replies by mail in two to four weeks.

How soon can I retake it, and how many times may I fail?

You can retake a failed exam after 21 calendar days, and there is no cap on attempts. What ends it is the 18-month void date on the application: the testing organization says you may take the exam as many times as necessary inside that window, waiting 21 calendar days after each attempt. Sit one within three weeks of the void date and CSLB says that was your last opportunity. After the void date you file the application again, with new fees. You rebook through your PSI account, not through CSLB.

After you pass

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I passed. What still has to happen before a license issues?

CSLB mails a Bond and Fee letter listing the issuance requirements for your own application, and they all come from the license law. A $25,000 contractor bond has to be on file. So does a current certificate of workers compensation insurance, or a certification of self-insurance, unless you have no employees and file the exemption statement, which some classifications may not use at all. A qualifier who is not the proprietor or a general partner files a bond of their own. The asbestos open book examination verification form has to be in. Then the initial license fee: $200 for a sole owner, $350 for anyone else, halved for a veteran who was not dishonorably discharged.

What is the asbestos open book exam?

An open book examination on handling and disposing of asbestos that every applicant for an initial contractor license completes and sends back before the license issues. CSLB publishes the booklet and the examination, says to take it after the license examination, and says it cannot process the license without the signed verification form. Nobody sits it at a test center. It is not the same as the asbestos certification examination, which is the paper a contractor passes to do asbestos-related work without holding the C-22 classification.

What it costs

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What does the exam itself cost, and what does a retake cost?

The exam fee is paid by the applicant directly to the organization that administers the exam, at no greater than the actual cost of administering it. Rescheduling an examination costs $100, set by 16 CCR s. 811(b)(1). Miss the appointment, cancel less than two days before the sitting, or turn up with the wrong identification, and you lose what you paid. CSLB's Examination FAQ says you then submit the re-examination fee to PSI in order to reschedule, and a failed attempt works the same way: after a fail you contact PSI to pay and reschedule.

What does getting the license cost, start to finish?

The application for an original license in one classification is $450, and each additional classification applied for with it is $150. Once both exams are passed, the initial license fee is $200 for a sole owner and $350 for a partnership, corporation, limited liability company or joint venture, and it covers a two-year term. Those four amounts are set by board regulation. A veteran who was not dishonorably discharged pays half the initial fee. Three costs sit outside that list and have their own answers here: the exam fee, which the testing organization sets and collects, what a surety charges for the contractor bond, and what an insurer charges for workers compensation cover. The last two are quoted to each applicant individually.

How much is the contractor bond?

The bond is $25,000, and having one on file is a condition of issuing, reinstating, reactivating or renewing a license. That is the sum the bond covers, not what you pay. You pay a premium, which a surety prices on your credit and your record when you apply for one.

What does LBExam cost?

$149 USD plus tax, once, for as long as this site exists. There is no subscription and nothing renews. The free questions stay free whether or not anybody pays, and questions written after you buy are included.

Is there a pass guarantee?

Yes, with terms. Complete three full timed mocks here before the real exam, sit it within 90 days of buying, and if you fail it, send the score report within 30 days of the exam date for a full refund. One claim per purchase. We check the mocks against your own account, so there is nothing to send for that half. The guarantee covers a fail after the three mocks, nothing more.