Employment and Construction Laws: Rights, Hiring Practices, and Safety Requirements, Exams of Contract Law

Download Employment and Construction Laws: Rights, Hiring Practices, and Safety Requirements and more Exams Contract Law in PDF only on Docsity! Highflier Scoremore CSLB CONTRACTOR'S LAW & BUSINESS EXAM 2024 (QUESTIONS WITH CORRECT ANSWERS) GUARANTEED PASS An employer remits State disability taxes withheld from an employees wages to what agency? Employment Development Department Which act establishes the rights of workers to organize into unions and negotiate contracts? National Labor Relations Act of 1935 A contractor has had a problem with employees stealing tools and equipment from job sites. When conducting job interviews, may the contractor ask prospective employees about their arrest records? It is not legal to ask prospective employees about arrest not leading to convictions. Why would a contractor have a case in Superior Court? If it is a dispute of more than $25,000 it can be transferred to Superior Court. Which would not have to be reported to DOSH immediately or within 24 hours? Car accident in which an employee steps onto a public road, gets hit by a car, and suffers a concussion. Highflier Scoremore A general contractor has obtained bids from several subcontractors for a private project. He notices that one bid is substantially lower than the rest. Is it ethical and a good business practice for this contractor to inform the subcontractor that the bid is substantially lower than the bids of the other subcontractors? Yes. If the contractor has reason to believe that the subcontractor has made an error in preparing his bid, the contractor should notify the subcontractor of the apparent error, but the contractor may not disclose the amounts of the other bids. An employer must furnish an employee with a completed IRS Form W-2 (Wage and Tax Statement) by: The 31st of January. After a job is completed, the owner decides to have additional work done. How should the contractor proceed? Write a new contract and ask the owner to sign it. The purpose of a 20-day preliminary notice for private work is to? Notify the owner that the person or firm who sent the notice has improved the property. Is it legal for a contractor to pay employees in cash? Yes, if the contractor provides each employee with a wage deduction statement semimonthly or at the time of each wage payment. You are bidding on a job with plans drawn by the owner. You notice a code violation and bring it to the attention of the owner. The owner declines to remedy the code violation and tells you not to worry. What should you do? Highflier Scoremore The contractor should do the best possible job of staying within budget. ` Who must sign a joint control addendum to a home improvement contract? Owner, contractor, and joint control officer. When purchasing insurance, what is the best way to chose among different companies? Cost and Coverage Sometimes contracts can prove to be too vague to interpret without disagreement between owner and contractor. Which of the following steps would best prevent such problems? Review the plans and specifications with the owner. When an owner signs a receipt for a stop notice, it usually means the owner: The owner recognizes that a lien could be placed on funds. To whom do you report and pay sales tax? The Board of Equalization DOSH must investigate a complaint charging a serious violation of health or safety standards within: DOSH must investigate a complaint charging a serious violation of health or safety standards within two working days. Highflier Scoremore By law, a "hard laborer" may not be younger than ______ years old. A hard laborer may not be younger than 16 years old. When is the last day a customer can cancel a contract that was signed on Friday, December 21st? The following Wednesday. The customer has the right to cancel 3 business days after the day the contract has been signed and delivered to the. In this case: Saturday Midnight day one. Monday midnight day two Wednesday Midnight day three. NOTE: Sunday and Tuesday were not business days since Tuesday was a holiday. Correct answer is Wednesday midnight. When a notice of completion has been filed, the original contractor has how many days to record a lien. 60 days to record a lien. Which of the following financial ratios is the strictest measure of liquidity? The quick ratio is the strictest measure of liquidity. When should you let your attorney see a construction contract? After the contract is prepared but before it is signed. How often are FICA taxes reported and paid? Quarterly Highflier Scoremore Business records must be kept and made available for inspection by the Registrar of Contractors for a period of _____ after completion of a construction project or operation. Business records must be kept for 5 years. Funds withheld to guarantee completion of a project and correction of defects are called a(n): Retention Direct costs are $37,000, overhead is 12% and profit is 5%. What is the selling price? $44,578.31 Add the 12% overhead and 5% profit together, then subtract that from 100% (83%). Then divide the total direct cost ($37,000) by the remaining percentage (83%) = 445.7831. A mechanics' lien is a written document that must be signed and verified by the claimant. The first and third steps a contractor should take in filing a lien are listed below. Step 1: Obtain the exact legal description of the property. Step 2: Step 3: Find out if the person requesting the work of improvement is the owner. What is Step 2? Find out the name of the legal owner of the property as well as the percent of ownership. A mechanics' lien. Step 1: Obtain the exact legal description of the property. Step 2: Find out the name of the legal owner of the property as well as the percent of ownership. Step 3: Find out if the person requesting the work of improvement is the owner. What happens after an employee's taxable wages exceed $7,000? After $7,000, the employer does not pay FUTA. Highflier Scoremore A(n) _____ represents a company's financial position on a specified date. A balance sheet. You are the qualifier for an active contractor's license. How do you inactivate the license? Write to CSLB, requesting that the license be made inactive. You are bidding as a prime contractor on a public works project. The work will not involve construction, improvement, or repair of streets, highways, or bridges. You will use subcontractors for part of the work. If you do not name a subcontractor for any part of the work: You will do that part of the work yourself. John Meyers, a general contractor, had a contract with Mr. and Ms. Barnes to construct a gazebo and deck in their back yard. John was behind schedule and hired his 18-year-old son, Bart, to help on a part- time basis. After working on the project for a month, Bart slipped on a plank that John had laid across the deck but did not nail securely. As a result of the fall, Bart broke his leg. John is insured for workers' compensation, but Bart wants to sue his father for negligence in a civil action. Which of the following statements is CORRECT? A civil action is not a possibility when the dispute involves a job-related injury, unless the employer is not insured for workers' compensation. This case would be handled by the Department of Industrial Relations. An applicant for a contractor's license receives a notice from the Contractors' State License Board, dated October 1, that the applicant passed the written exams. To receive an active license, the applicant must file a license bond and fee no later than: December 30th. You have 60 days to file a license bond. Highflier Scoremore If an owner lawfully cancels a contract, how long does the contractor have to pick up previously delivered materials? If an owner lawfully cancels a contract, the contractor has 20 days to pick up previously delivered materials. Who is responsible for checking the site before the building inspector arrives? The contractor is responsible for checking the site before the inspector arrives. When is an employee allowed to view their own personnel file? When ever they wish to. The supplier of a potentially hazardous product must be able to provide a(n) _________ with that product. Material Safety Data Sheet Harry and Linda have done business as a licensed partnership. If Linda is a general partner, but not the qualifier, what must she do to get an individual license? If Linda was listed as a partner on the license and was actively engaged in the business for at least five of the past seven years, she may apply for a license with a waiver of the exam. Where is the Notice of Right to Cancel found on a home improvement contract? Highflier Scoremore Near the client signature. An employee works 60 hours in one week. If the hourly wage rate is $12.00, what are the gross wages? $840 40 hours at $12.00 20 hours at $18.00 If you are planning to dig, drill, and bore at a job site, you should notify _____ before starting work. The regional Underground Service Alert Notification Center (USA) Is it legal for a contractor to hire professional strikebreakers to replace striking employees? No. The contractor is subject to a maximum fine of $1,000 and/or a maximum jail sentence of 90 days. You have been awarded a job. It requires two days for site preparation and one day for clean-up. The contract involves two separate tasks--one lasting seven days and the other 10 days. If the two tasks can be done simultaneously, for how many days should you schedule the job? 13 days as long as the jobs can be done simultaneously. A subcontractor or material supplier has 30 days to file a lien once a notice of completion has been recorded. A sub or material supplier has 30 days to file a lien once a notice of completion has been recorded. What possible reason would an owner have for requiring an unconditional lien release from a subcontractor? Highflier Scoremore Despite the changes in the laws, the CSLB still refers to "Notice to Owner" in several current publications as well as on their website. Without any evidence to the contrary, we must assume that the question may still be an active question in the database. If this question still appears as written here, then the correct answer is "Notice to Owner." A three-day notice of right to cancel is also included as part of the contract, but is not required if the contract is negotiated at the contractor's place of business. A 20-day Preliminary Notice is typically delivered by the subcontractor when he or she starts work, but can be delivered later. Ms. Gomez applies for a job. Of the following, the only reason an employer may lawfully deny her employment is: No related work experience or social security number. What is the most likely reason to lose a bid? Vague specifications. Which of the following procedures BEST ensures error-free bids? Rechecking the bid before submitting it to the client. A contractor, on his own initiative, changed the design of a building and carried out the change. The owner rejected the change and stated that the building has lost market value. If the owner takes the contractor to court and obtains a favorable judgment, the owner is: Due the cost of repairs or the loss of market value. Highflier Scoremore When a subcontractor does work on a public works contract, the public agency considers the subcontractor to be: A subcontractor of the prime contractor. For which of the following would you not obtain a short term loan? Office rent. Construction or alteration of any building, highway, excavation, or other structure in the State of California requires a contractor's license if the total cost of one or more contracts on the project is: $500 or more in labor and materials. A contractor meets Mr. Jones at his home to discuss remodeling. The contractor and Mr. Jones sign a contract that includes a three-day cancellation form. After the contractor leaves, Mr. Jones decides not to have the work done. Instead of using the cancellation form, Mr. Jones sends the contractor a letter by first-class mail stating that he is canceling the contract. Is Mr. Jones' cancellation effective? Yes. Mr. Jones' letter does cancel the contract because it indicates his intention not to be bound by the contract. As part of the safety training process, contractors's supervisors are required to conduct "toolbox" or "tailgate" safety meetings. How often must these meetings be held. At least once every ten working days. Which of the following statements about home improvement laws is ("most correct") Highflier Scoremore . The homeowner may give the sales person a bonus. As required by the Immigration Reform and Control Act, all employees hired on or after November 7, 1986 must complete what form to verify their employment eligibility status? I-9 A contractor entered into a home improvement contract for more than $500 with Mrs. Swenson to remodel her kitchen and bathroom. The contract calls for a down payment before work is to begin. According to the Business and Professions Code, how much may the contractor accept from Mrs. Swenson as down payment for the work? The down payment is limited to $1,000 or 10% of the total price, which ever is less. Some counties have an additional sales tax added to the base rate. Which of the following is a correct statement regarding this additional tax? You must pay the additional tax in the county where the materials were purchased. A notice of completion must be recorded within: A notice of completion must be recorded within 10 days after work is completed. Insured employers must report every work-related illness or injury to their workers' compensation carrier within _____ of the incident. Highflier Scoremore Diversion is when you use money from a current job to pay for unrelated projects. Direct costs are $7,200, overhead is 12%, and profit is 10%. What is the selling price? $9,230.77 Take 10% plus 10%=22% subtract 22% from 100 %= 78% now divide the total cost of $7,200 by 78%=$9,230.76 round up to $9,230.77. Excavators must clearly mark the boundaries of a work area, usually with what color paint. Excavators usually mark boundaries of a work area with white paint. Suppose you include depreciation on your income statement your first year in business, but you do not include it in the second year. How will this affect your net income being reported? Your net income will be greater than it should be in the second year. How many days of inactivity must pass before a notice of cessation may be recorded? 30 days of inactivity must pass before a notice of cessation may be recorded. A RME may act as the qualifier for no more than ________ firms in any one-year period. A RME may only act as the qualifier for one firm in any one year period. Which of the following is not covered by standard contractor's insurance policies? Highflier Scoremore If a contractor had a builders risk policy, a general liability policy, and a inland marine policy as a standard guideline, employees tools would not be covered by any of the standard policies. Unsafe or faulty equipment is found on a job site. What should be done?. It is the contractor's responsibility to correct the problem. Who furnishes MSDS sheets? The supplier is who should furnish MSDS sheets. At the end of each month, data is posted from the bookkeeping journals to the: At the end of each month data should be posted from the bookkeeping journal to the general ledger. Except in an emergency, you must notify the regional Underground Service Alert Notification Center no less than _____ nor more than _____ starting excavation work. You must notify the regional UAS alert notification center at least 2 days before and no more than 14 days before starting excavation work. If you are a subcontractor, there are three general steps in the mechanics' lien procedure to make sure you are paid for works of improvement upon property. Step 1: Determine the exact legal description of the property (map book, page, etc.). Step 2: Step 3: Complete the work and record a Claim of Lien if you are not paid on time. What is Step 2? If you are a subcontractor the three steps of the mechanics' lien procedure to make sure you are paid for your work are Step 1: Determine the exact legal description of the property (map book, page, etc.) Step 2: Serve preliminary 20-day notice. Step: 3 Complete the work and record a Claim of Lien if you are not paid on time. Highflier Scoremore Before you build on a landfill you must notify: The government and the engineers. If a building permit is required, when does the law permit a building inspector to enter and inspect a residence? The law permits an inspector to enter and inspect a residence between 8 am and 6 pm unless the owner has given permission to inspect at some other time. When a joint control addendum is used, which of the following does not have to be included in a home improvement contract? A schedule of payments does not need to be included in a home improvement contract if a joint control addendum is used. A contractor is bidding on a project for a homeowner. The homeowner has included several "extra" items to be bid upon. After receiving the bid, the homeowner said it was too high and asked the contractor to lower the price. What should the contractor do? Negotiate with the homeowner to reduce the scope of the work by eliminating some of the extra items. A balance sheet shows: A balance sheet shows assets and liabilities at a certain point in time. Which of the following are employees NOT required to learn? Highflier Scoremore Severance pay would not be included in calculating unemployment and disability insurance. Which of the following is a correct statement about budgets? A budget should allow leeway for month-to-month variations. How often should the safety supervisor be at the job site? It depends on the work being done. There is a near-miss safety situation on a job. What steps should the employer take? The unsafe situation must be investigated, and the investigation must include a written report. How should the prime contractor determine whether a subcontractor has workers' compensation insurance? The prime contractor should ask to see the expiration date on the sub's certificate of insurance. In most construction contracts, the retention may be held for up to _____ days as a guarantee that the prime pays the subcontractors and suppliers. Retention may be held for up to 60 days. A contractor bids on a home improvement project and earns the bid. Later, he decides not to take the job. Which bond would protect the home owner? A bid bond would protect the client from a contractor who declines to take a job that has already bid. Highflier Scoremore Of the following, which is the best description of "accounts receivable"? Money due from customers who have purchased goods or services on credit. What is used to analyze the income and outflow of cash during a period of time? A cash flow statement is used to analyze the income and outflow of cash. A consumer may cancel a home solicitation contract at any time prior to midnight of the _____ after the date of the transaction. A consumer may cancel a home solicitation contract at anytime prior to midnight of the 3rd business day after the date of the transaction. When preparing a bid you should: Evaluate the effect of unexpected delays on costs. Where must a contractor include the "Notice to Owner"? In all home improvement contracts over $500 A contractor's license has expired. How long after the date of expiration does the contractor have to renew the license before it becomes void? A contractor has five years after the date of expiration to renew the license before it becomes void. Highflier Scoremore To whom does an employer pay FUTA tax? FUTA tax is paid to the Internal Revenue Service An owner is having a difficult time making progress payments on time. What should a contractor do to protect himself? The contractor should ask the owner to open an escrow account. A construction company was hiring a new crew and asked each prospective employee for their name, address, and Social Security number. Several prospective employees remembered their Social Security numbers but did not have a card or other documentation. The practice of relying on memorized Social Security numbers is: Unacceptable: The actual Social Security card should have been inspected. Of the following, which is usually the most difficult item to estimate? Labor is the most difficult to estimate. If you find that work done by a previous contractor is in violation of the local building code, what should you do? Report the violation to the owner with an estimate for the needed repairs. What is the best way for a contractor to ensure that materials are delivered at the right time to a job site? Follow the critical-path method. Highflier Scoremore Which funds does the stop notice block? The stop notice blocks money from the owner to the prime contractor. Which financial ratio measures liquidity? Both the current ratio and acid-test ratio (quick ratio) can be used to measure liquidity. You are at a critical point in a project, and the owner tells you that something already completed was not done correctly. What should you do? Tell the owner you will attend to the matter after you complete the critical work you are doing. If a subcontractor were to serve the owner with a stop notice, the most likely reason would be to: Inform the owner that the subcontractor has not been paid by the prime, and the owner must set aside sufficient funds to pay the subcontractor's bill Who is responsible for safety equipment actually being put to use on the jobsite? The contractor is responsible for ensuring safety equipment is actually put to use. An employer who receives a citation for a serious violation of Cal/OSHA regulations can be assessed a penalty of up to _____ for each violation. Cal/OSHA can assess a penalty for a serious citation for up to $25,000 for each violation. Of the following, who may not approve a set of plans in the State of California? Highflier Scoremore An interior designer can not approve a set of plans in the State of California After a home improvement contract is signed, the contractor must substantially begin work within how many days of the date specified in the contract? Within 20 days of the date specified in the contract. Which building code should a contractor follow? A contractor should follow all local building codes. A prime contractor decides to sub out the electrical work. How would the prime determine what price to add for the electrical work? The prime gets a firm bid from the subcontractor. In the absence of a collective bargaining agreement, two employees filed a written complaint with DOSH because of unsafe working conditions. The contractor discovered who the employees were and fired them because of the complaint. What would probably happen if the employees appealed the termination? The contractor must reinstate the employees and reimburse them for lost wages and benefits. A contractor has been turned in to DOSH by an employee for a safety violation. The contractor wants to find out who reported the violation and asked DOSH for the employee's name. What will DOSH likely do? Unless requested otherwise, DOSH will keep confidential the name of any person making a complaint, and no retaliation may be directed at the employee if the employee's identity is discovered. Highflier Scoremore A licensed contractor contracts with a building owner to do a $900 improvement. When applying for a building permit, the contractor checks the owner-builder box on the declaration form. Which of the following statements is correct? The contractor may not check the owner-builder box because the owner contracted for the improvement. _____, although usually the largest single item in a bid, can be fairly accurately determined. Materials What is the maximum number of exemptions an employee can put on their W-4 before you have to send the form to the IRS? An employee can put 10 exemptions on their W-4 before you have to send the form to the IRS. Star Construction moved to a new office but never filed a change-of-address form with the Registrar. Consequently, Star never received a renewal application. If Star fails to renew its license within three years of the date of expiration, Star will have to? Pay a delinquency fee to renew license. An employer must file federal Form 1099-MISC to report payments of _____ or more per calendar year to persons not treated as employees (e.g., independent contractors) for services performed for the business. $600 A notice canceling a home solicitation contract becomes effective when? When the written notice is deposited in the mail.