Flashcards
100 free cards across the 7 exam sections, each one naming the statute, regulation or published guide it rests on. Reveal the back on any card. A free account keeps your place and brings the cards you missed back on a schedule.
No, because advertising for work covered by the license law without a valid license in the classification advertised is a misdemeanor, except that a licensed building or engineering contractor may advertise as a general contractor.
A fine of up to $5,000, up to six months in county jail, or both, because contracting without a license is a misdemeanor unless the work is exempt from the license law.
Only when the aggregate contract price for labor, materials and all other items is less than $1,000 and the work needs no building permit, so the job counts as casual, minor or inconsequential. Section 7048 reads this way as amended effective January 1, 2026.
A principal business in structures for the support, shelter and enclosure of persons, animals or property, where construction requires at least two unrelated building trades or crafts.
Working 32 hours per week, or 80 percent of the total hours the business operates, whichever is less, because an RME must be a bona fide employee working in the classification being qualified.
Ninety days from the date of disassociation, because the license is automatically suspended or the classification removed at the end of that period if no replacement has been filed.
A contractor's bond of $25,000, because the board requires it as a condition precedent to issuing, reinstating, reactivating, renewing or maintaining a license.
No. Under the license law, no license of any type or classification is transferable to another person or entity under any circumstances.
Within 90 days, in writing on the form the registrar prescribes, because a late notice takes effect only when it reaches the board and the delay is itself grounds for discipline.
Two years from the last day of the month it was issued, or two years from the date the renewed license last expired, so renewal falls due on a two-year cycle.
Five years, because an expired license may be renewed at any time inside that window by filing the renewal application and paying the renewal fee, with the delinquency fee on top.
Four years as a journeyman, foreman, supervising employee or contractor within the 10 years immediately before filing, because the board's rule requires that much experience in the particular class applied for.
One person holds both the control and the exposure, because a sole owner must find all of the financing and answers personally for claims against the business.
A fixture is accessory to a building and does not lose its identity when installed, which is why the California Department of Tax and Fee Administration's Publication 9 (February 2025) lists a furnace as a fixture and lumber as a material.
CDTFA Pub. 9, p. 6 Reference document, not law.
The consumer. Under the California Department of Tax and Fee Administration's Publication 9 (February 2025) a contractor is always the consumer of materials it furnishes and installs on a lump sum contract, so tax applies to what those materials cost the contractor.
CDTFA Pub. 9, p. 8 Reference document, not law.
The retailer. The California Department of Tax and Fee Administration's Publication 9 (February 2025) states tax applies to the contractor's sale of the fixture rather than to what the contractor paid for it.
CDTFA Pub. 9, p. 9 Reference document, not law.
Revenue when the cash is received and expenses in the year paid, so receivables and payables never appear and income is not matched to the period that earned it.
The financial condition of the business at a certain point in time, which is why it is described as a snapshot rather than a record of a period's activity.
Revenue when earned and expenses when incurred, whatever the payment date, so the method matches revenues against the costs of the same period.
Profits and losses regularly, based on the work accomplished on each job, so half the estimated revenue and profit is treated as earned when half the contract performance is done.
The year the contract is completed, since the method holds the gross income and the related costs of each contract back until completion instead of spreading them across the work.
Assets on the left, liabilities and stockholders' equity on the right, and the two sides are always equal because equity is what remains of the assets after the claims of others.
A share of each progress payment, usually 10 percent, held back until the project is satisfactorily completed and accepted, so the contractor has earned the money before it is paid.
It summarizes the operations of the company over a period of time, so it shows revenue, expenses and the resulting profit or loss rather than a position on one date.
Subtract total current liabilities from total current assets, because working capital is the difference between the two and measures what is left free and clear once every current debt is paid.
Divide total current assets by total current liabilities, so the result states how many dollars of current assets stand behind each dollar of current debt.
Quick assets are total current assets minus inventories, so the quick ratio is the more conservative test because it counts only what converts to cash quickly.
One for each place of business, because every person who wants to do business as a seller in the state must file an application for a permit for each place of business.
A current and valid Certificate of Workers' Compensation Insurance or Certification of Self-Insurance in the license holder's own business name, because the law makes that filing a condition precedent to issuing, renewing or continuing a license.
By filing a statement with the board on the registrar's form certifying that it employs nobody in a way that brings it under California workers' compensation law, since the exemption is open only to a license holder with no employees.
C-8, C-20, C-22, C-39 and D-49, because the exemption requires that the applicant or licensee not hold any of those, so a holder must carry coverage even with no employees.
The license is suspended automatically by operation of law, because failure to obtain or maintain required coverage triggers the suspension itself rather than waiting on any order from the board.
A minimum of $10,000 per violation for a sole owner licensee and $20,000 per violation for a partnership, corporation, limited liability company (LLC) or tribal business licensee, because the statute as amended effective January 1, 2026 sets the floor by the form the license takes.
Immediately at the time of discharge, because wages earned and unpaid become due and payable at once when the employer is the one ending the employment.
Not later than 72 hours after quitting, or at the time of quitting when the employee gave 72 hours notice, because the deadline turns on whether notice was given.
No more than 30 days, because the employee's wages continue as a penalty at the same rate from the due date until they are paid or an action is commenced.
Twice each calendar month on paydays designated in advance, with labor performed from the 1st through the 15th paid between the 16th and the 26th of that same month, because the statute fixes both the frequency and the window.
One additional hour of pay at the employee's regular rate of compensation for each workday the period was not provided, because the statute sets that premium per day rather than per missed break.
Not less than $5,000 and not more than $15,000 for each violation, because the statute, as amended effective January 1, 2026, sets that range once the Labor and Workforce Development Agency or a court determines the misclassification was willful.
The worker is presumed to be an employee rather than an independent contractor, because the Labor Code creates a rebuttable presumption covering anyone performing licensed work or performing it for someone who needs the license.
Freedom from the hiring entity's control and direction, work outside the usual course of that entity's business, and the worker customarily engaged in an independently established trade of the same nature, because the worker is an employee unless all three are shown.
By insuring with one or more insurers authorized to write compensation insurance in the state, or by obtaining a certificate of consent to self-insure from the Director of Industrial Relations, because every employer except the state must do one or the other.
A misdemeanor punishable by up to one year in county jail, a fine of up to double the premium that would have been due and never less than $10,000, or both, because the statute treats knowing failure to secure payment as a crime.
Bring an action at law against the employer for damages, because the statute lets the injured employee or the dependents sue as though the workers' compensation division did not apply at all.
No less than one and one-half times the regular rate of pay, because eight hours of labor constitutes a day's work and the same rate covers the first eight hours worked on the seventh day of a workweek.
No less than twice the regular rate of pay, because the statute moves the premium from time and one-half up to double time once daily hours pass 12.
A meal period of not less than 30 minutes is required once the work period passes five hours, and it may be waived by mutual consent only when the total work period is no more than six hours, under the statute as amended effective January 1, 2026.
Within 20 days of hiring, because the Unemployment Insurance Code requires the report on every employee the employer is obliged to report inside that window.
It must identify the type of insurance carried, such as commercial general liability (CGL) insurance or workers' compensation insurance, because advertising as insured without naming the type is cause for discipline.
A contractor's bond of $25,000, because the Contractors State License Board (CSLB) requires it as a condition precedent to issuing, reinstating, reactivating, renewing or continuing a license.
Actual completion, occupation or use by the owner with labor stopped, cessation of labor for a continuous 60 days, or recording a notice of cessation after 30 days of stopped labor, because completion is the event the lien deadlines count from.
On or within 15 days after the date of completion, since the Civil Code allows the notice only in that window, and the owner must sign and verify it.
Twenty days after the claimant first furnishes work, since a claimant who serves late may then claim only for work performed within the 20 days before service.
After completing the direct contract and before the earlier of 90 days after completion of the work of improvement or 60 days after the owner records a notice of completion or cessation, because a lien recorded outside that window cannot be enforced.
After it stops providing work and before the earlier of 90 days after completion of the work of improvement or 30 days after the owner records a notice of completion or cessation, so a recorded notice cuts the window to 30 days.
125 percent of the claim of lien, or of the amount the lien allocates to the property released, because the bond has to cover any judgment and costs the claimant recovers on the lien.
Ninety days after the claim of lien is recorded, because a claimant that does not commence an action in that time sees the claim of lien expire and become unenforceable.
The claimant must have given any required preliminary notice, and must give the stop payment notice before the time to record a claim of lien expires, because a notice missing either condition is not valid.
A payment bond of the direct contractor for not less than 50 percent of the price stated in the direct contract, recorded with that contract before work starts, so the surety answers for the rest.
$1,500 for each employee employed when the order is served, because the Department of Industrial Relations (DIR) director serves a penalty assessment order with the stop order as an added penalty for being uninsured.
Every such contract must carry a 10-point statement that contractors are licensed and regulated by the Contractors State License Board (CSLB), which may investigate a patent complaint filed within four years and a latent structural complaint filed within 10 years.
The suit fails, because no such person may bring or maintain an action for compensation without alleging they were duly licensed at all times during the work, whatever the merits of the claim.
All compensation paid to that contractor, since the statute gives the hirer its own action to get back everything paid for the work.
The Code calls it diversion of funds and makes it cause for disciplinary action, as it does a failure to substantially account for how the money received for that project was applied.
Not later than seven days after receipt of the progress payment unless the parties agreed otherwise in writing, because the subcontractor is owed its share of what that payment covered.
An aggregate price over $500 for all labor, services and materials, since the Business and Professions Code (B&P Code) only treats the agreement as a home improvement contract once the total exceeds that figure. Section 7159 reads this way as amended effective January 1, 2026.
Before the work covered by the contract or the change order starts, because the writing must be signed by the parties prior to commencement of that work. Section 7159 reads this way as amended effective January 1, 2026.
A copy of the contract signed and dated by both the contractor and the buyer, because the buyer's receipt of that copy is what starts the buyer's right to cancel. Section 7159 reads this way as amended effective January 1, 2026.
A buyer who is a senior citizen, because every reference to three and third in the cancellation notice changes to five and fifth for that buyer. Section 7159 reads this way as amended effective January 1, 2026.
One written to repair or restore residential premises damaged by a sudden or catastrophic event for which a state or local emergency has been declared, so a disaster job gets the longer window. Section 7159 reads this way as amended effective January 1, 2026.
The Mechanics Lien Warning, because the contract must tell the owner that anyone who helps improve the property and is not paid may record a lien against it. Section 7159 reads this way as amended effective January 1, 2026.
The amount is $750 or less, the buyer initiated the contact, the contractor sells nothing beyond what the problem requires, and no payment is due or accepted until the work is completed.
$1,000 or 10 percent of the contract amount, whichever is less, because the Business and Professions Code (B&P Code) caps the down payment at the smaller of those two figures.
The contractor must neither request nor accept any payment that exceeds the value of the work performed or the material delivered, so billing ahead of progress is barred.
The scope of the work, the amount added to or subtracted from the contract, and the effect on the progress payments or the completion date, because an order missing any of the three does not bind the buyer.
One for a dwelling the owner will keep for at least a year, because that contract and any changes to it must be evidenced in writing signed by both the owner and the contractor.
Ten days after cancellation, because the seller must tender back any payments the buyer made along with any note or other evidence of indebtedness.
Until midnight of the third business day after the buyer receives a signed and dated copy of the contract, because the Civil Code runs the period from receipt of that copy and not from the signing. Section 1689.6 reads this way as amended effective January 1, 2026.
Thirty days after notice demanding payment is given, unless the owner and the direct contractor agreed otherwise in writing, and only a payment in good faith dispute may be held back.
Five percent of the payment, and total retention proceeds may not exceed 5 percent of the contract price, under the Civil Code rule for contracts entered into on or after January 1, 2026. The cap does not reach a residential project that is not mixed-use and does not exceed four stories.
Within 45 days after completion of the work of improvement, because the Civil Code sets that outside limit on holding retained funds once the job is finished.
Before starting work on a public works contract over $25,000 awarded by a public entity other than a state entity, because the direct contractor must give the payment bond to that awarding officer or entity and have it approved.
Register with the Department of Industrial Relations and keep that registration current, because the registration section operative July 1, 2026 requires it for all three acts.
On every public works project over $1,000, because the Labor Code excepts only projects of one thousand dollars or less and applies to contract work, including contracts let for maintenance.
One hundred dollars for each calendar day for each worker until it complies, because the section as amended effective January 1, 2026 allows 10 days from the written request before the forfeiture starts running.
One hour of apprentice work for every five hours of journeyman work, because the ratio may follow the apprenticeship standards the contractor is bound by but can never fall below one to five.
Within seven calendar days of receiving information that a recordable injury or illness happened, so the log stays current rather than being written up at year end.
From no later than February 1 of the following year until April 30, because the posting is how employees see the prior year's totals for their own establishment.
Five years following the end of the calendar year the records cover, and the Form 300 must be updated during that storage period as cases change.
Within eight hours, because the recording rules require that report to the division on top of the entry on the Form 300 log.
At least every 10 working days, because the construction safety orders make the supervisory employee run these meetings with the crew to keep safety in front of the workers.
Only in two cases: the excavation is made entirely in stable rock, or it is less than 5 feet deep and a competent person's examination of the ground shows no indication of a potential cave-in.
The top rail must be not less than 42 inches and not more than 45 inches, measured from its upper surface to the floor, platform, runway or ramp.
Above 7 1/2 feet, because exposure to falling more than that distance from a perimeter, an unprotected edge, a leading edge or a shaftway requires an approved system unless the area is otherwise protected.
Every employer must, because the general industry safety orders require each one to establish, implement and maintain an effective program and to put it in writing.
One quart per employee per hour for the entire shift, provided at the start of the shift unless the employer has procedures to replenish it as the crew drinks.
Five feet or deeper, because construction of a trench or excavation at that depth into which any person must descend is permit-required activity for the employer.
Fifteen working days from receipt of the certified mail notice, because that notice gives the employer that window to tell the appeals board it wishes to contest the citation or order.
Immediately, by telephone or through the division's online mechanism, because that report is required in addition to the routine injury report under subdivision (a).
Five days from the date the employer obtains knowledge of the injury or illness, since the report goes to the Department of Industrial Relations or, for an insured employer, to the insurer.
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