Nevada Contractor License Exam — All Questions

A construction business is organized as a corporation. If the corporation is sued and cannot pay a judgment, what is generally at risk?

• a.The personal homes and bank accounts of every shareholder
• b.The personal assets of the highest-paid officer only
• c.The assets owned by the corporation itself, not the shareholders' personal assets✓
• d.Nothing, because corporations cannot be sued

A corporation is a separate legal entity from its owners (shareholders). This separation creates limited liability: creditors and judgments generally reach only the assets the corporation owns, and shareholders risk losing only what they invested — not their personal homes or savings. That protection can be lost only in unusual cases such as fraud or 'piercing the corporate veil.'

In a general partnership, how are the general partners liable for the debts of the business?

• a.Only up to the amount each partner originally invested
• b.Personally and jointly liable for all partnership debts✓
• c.Not liable at all, because the partnership pays its own debts
• d.Liable only for debts they personally signed for

A general partnership does not shield its owners. Each general partner has unlimited personal liability and is jointly liable for the partnership's debts and obligations — a creditor can pursue any partner's personal assets. This unlimited exposure is a key reason many contractors instead form an LLC or corporation, which provide limited liability.

Which statement best describes a limited liability company (LLC) for a contracting business?

• a.It gives owners limited liability while normally allowing profits to pass through to owners' personal tax returns✓
• b.It requires the business to pay corporate income tax and forbids pass-through taxation
• c.It makes every member personally liable for all company debts
• d.It can be owned by only one person and never by a group

An LLC combines the liability protection of a corporation with the tax flexibility of a partnership. Members are generally shielded from personal liability for business debts, and by default the LLC's profits and losses 'pass through' to the members' individual tax returns, avoiding the double taxation of a standard C corporation. An LLC may have one member or many.

A contractor's total direct cost for a job is $18,000. The contractor adds a 15% markup to cover overhead and profit. What is the bid price?

• a.$18,150
• b.$18,270
• c.$20,700✓
• d.$21,150

Markup is a percentage added on top of cost. Multiply the cost by (1 + markup): $18,000 x 1.15 = $20,700. The markup dollars are $18,000 x 0.15 = $2,700, which is added to the $18,000 cost to reach the bid price. Markup covers both company overhead and profit.

A job costs the contractor $8,000. The contractor wants a 20% gross profit MARGIN (profit as a percentage of the selling price). What must the selling price be?

• a.$9,600
• b.$10,000✓
• c.$9,800
• d.$10,400

Margin is measured against the selling price, not the cost, so you cannot simply add 20% to cost. Price = cost / (1 - margin) = $8,000 / (1 - 0.20) = $8,000 / 0.80 = $10,000. Check: profit is $2,000, and $2,000 / $10,000 = 20% margin. Adding 20% to cost ($9,600) would only give a 16.7% margin — a common and costly estimating error.

How many cubic yards of concrete are needed for a slab 27 ft long, 30 ft wide, and 4 inches thick?

• a.3.3 cubic yards
• b.6.7 cubic yards
• c.8.5 cubic yards
• d.10 cubic yards✓

First convert thickness to feet: 4 in / 12 = 0.3333 ft. Volume in cubic feet = 27 x 30 x 0.3333 = 270 cubic feet. Convert to cubic yards by dividing by 27 (there are 27 cubic feet in a cubic yard): 270 / 27 = 10 cubic yards. Getting units consistent — feet for all three dimensions — is the key step.

On a project where the exact quantities of excavation and fill are not yet known, which bidding method best protects both owner and contractor from large quantity surprises?

• a.A unit-price contract, paying a set price per unit for the actual quantity installed✓
• b.A lump-sum contract with no measurement of quantities
• c.A verbal handshake agreement
• d.A cost-plus contract with no cost records kept

Unit pricing sets a fixed price per unit (for example, per cubic yard of excavation), and the contractor is paid for the actual measured quantity. This fairly handles uncertain quantities: the owner pays only for work performed, and the contractor is protected if quantities grow. A lump sum forces the contractor to guess and gamble on the quantity, which is risky when the amount is genuinely unknown.

Which set of elements is generally required for a contract to be legally valid and enforceable?

• a.A notary stamp, a witness, and a deposit
• b.A blueprint, a permit, and a bond
• c.Offer, acceptance, consideration, legal capacity, and a lawful purpose✓
• d.A handshake, a logo, and an invoice

A valid contract requires an offer, acceptance of that offer (mutual assent), consideration (something of value exchanged by each side), parties with legal capacity to contract, and a lawful purpose. If any element is missing — for example, no consideration or an illegal objective — the agreement may be void or unenforceable. Notaries, permits, and bonds are sometimes useful but are not the core elements of contract formation.

A construction contract states that the contractor will pay the owner $500 for each day the project finishes late, agreed in advance as a reasonable estimate of the owner's loss. This clause is best described as:

• a.A performance bond
• b.A liquidated damages clause✓
• c.A mechanic's lien
• d.A punitive penalty that courts always strike down

Liquidated damages are a dollar amount the parties agree to IN ADVANCE as compensation for a breach (commonly late completion) when the actual loss would be hard to calculate. To be enforceable the amount must be a reasonable pre-estimate of the harm, not a punishment. A performance bond is a surety guarantee, and a mechanic's lien secures payment for labor and materials — different tools entirely.

The owner asks the contractor to add a bathroom that was not in the original signed contract. What is the correct way to authorize and price this added work?

• a.A written change order signed by both parties before the work proceeds✓
• b.A verbal 'go ahead' with no documentation
• c.An adjustment made quietly on the final invoice
• d.A new lawsuit filed against the owner

A change order is a written amendment that documents a modification to the scope, price, or schedule and is signed by both parties. Handling changes in writing before performing the work protects the contractor's right to be paid for the extra work and prevents disputes about what was authorized. Relying on verbal approvals is a leading cause of payment disputes.

Under the Statute of Frauds, which of the following is generally required to be in writing to be enforceable?

• a.A one-hour verbal agreement to sweep a job site
• b.A casual promise to lend a friend a hammer
• c.An agreement to buy lunch for the crew
• d.A contract for the sale of land or an interest in real property✓

The Statute of Frauds requires certain categories of contracts to be in writing and signed to be enforceable — most notably contracts for the sale of land or interests in real property, and agreements that cannot be performed within one year. This is why construction and real-property agreements are documented in writing. Minor, short, everyday arrangements are not covered.

In a Critical Path Method (CPM) schedule, the 'critical path' is:

• a.The path with the most expensive activities
• b.The longest sequence of dependent activities, which determines the shortest possible project duration✓
• c.The path that uses the newest equipment
• d.Any path that has the most float

The critical path is the longest chain of dependent activities through the network. Because it is the longest path, it sets the minimum time in which the whole project can finish. Activities on the critical path have zero float — delaying any one of them delays the entire project. It is about time and dependency, not cost or equipment.

'Float' (also called slack) for a scheduled activity means:

• a.The amount of time an activity can be delayed without delaying the project's completion date✓
• b.The amount of money left in the activity's budget
• c.The number of extra workers assigned to the activity
• d.The percentage of the activity that is already complete

Float (slack) is the scheduling flexibility of an activity — how long it can slip before it pushes out the project finish date. Activities on the critical path have zero float. Understanding float lets a manager shift non-critical work and reallocate crews without harming the overall completion date. It is a measure of time flexibility, not money or manpower.

During construction the contractor finds the plans and specifications conflict and needs clarification from the architect. The standard document used to formally ask this question is a:

• a.Certificate of occupancy
• b.Lien waiver
• c.Request for Information (RFI)✓
• d.Notice to proceed

A Request for Information (RFI) is the formal, written channel a contractor uses to ask the design team to clarify or resolve gaps, conflicts, or ambiguities in the drawings and specifications. Documenting questions and answers through RFIs creates a paper trail, avoids guesswork, and supports later claims if the answer changes the cost or schedule.

What is the primary purpose of a Gantt (bar) chart on a construction project?

• a.To calculate payroll taxes for each employee
• b.To show project activities as bars along a timeline so start dates, durations, and overlaps are easy to see✓
• c.To record the exact chemical composition of the concrete
• d.To replace the need for any building permits

A Gantt chart displays each task as a horizontal bar positioned and sized along a time axis, making it easy to communicate when activities start and finish, how long they take, and where they overlap. It is a scheduling and communication tool. It does not perform payroll, material testing, or permitting functions.

A contracting company has current assets of $240,000 and current liabilities of $120,000. What is its current ratio?

• a.0.5 to 1
• b.1.2 to 1
• c.2.0 to 1✓
• d.12 to 1

Current ratio = current assets / current liabilities = $240,000 / $120,000 = 2.0. A ratio of 2.0 means the company has $2 of short-term assets for every $1 of short-term debt, which generally indicates healthy short-term liquidity. Sureties and lenders watch this ratio closely; a ratio below 1.0 signals the company may struggle to pay near-term obligations.

Working capital is calculated as:

• a.Current assets minus current liabilities✓
• b.Total revenue minus total expenses for the year
• c.The value of all equipment the company owns
• d.The owner's original cash investment

Working capital = current assets - current liabilities. It measures the short-term funds available to run daily operations, buy materials, meet payroll, and absorb delays before receivables come in. Positive working capital is essential in construction because contractors often pay costs long before the owner pays them. It is different from annual net profit and from equipment value.

On a project, the owner withholds 10% from each progress payment until the work is satisfactorily completed. This withheld amount is called:

• a.A liquidated damage
• b.Retainage (retention)✓
• c.A change order
• d.Overhead

Retainage (retention) is a portion of each progress payment the owner holds back — commonly 5% to 10% — and releases after the contractor satisfactorily completes the work and addresses punch-list items. It gives the owner leverage to ensure completion, but it also strains the contractor's cash flow, so contractors must plan for it and pass appropriate retainage terms down to subcontractors.

Why do contractors use job costing (tracking costs to each specific project)?

• a.Because the law forbids one combined company bank account
• b.To avoid ever having to file a tax return
• c.Only to make the paperwork look more professional
• d.To compare actual costs against the estimate for each job and see which jobs are profitable✓

Job costing assigns labor, materials, equipment, and subcontractor costs to each individual project. This lets the contractor compare actual costs to the original estimate in real time, catch overruns early, price future work more accurately, and identify which types of jobs actually make money. Without job costing, a company can be busy and still lose money without knowing which project caused the loss.

Under OSHA construction standards, at what height above a lower level does fall protection generally become required for workers on a construction site?

• a.2 feet
• b.4 feet
• c.6 feet✓
• d.20 feet

OSHA's construction fall-protection rule (29 CFR 1926.501) generally requires protection — such as guardrails, safety nets, or personal fall-arrest systems — when a worker is exposed to a fall of 6 feet or more to a lower level. (Note the general-industry trigger is 4 feet, but on construction sites the 6-foot rule applies.) Falls are consistently a leading cause of construction fatalities, which is why this threshold is heavily tested and enforced.

According to the hierarchy of controls, which method of protecting workers from a hazard is MOST effective and should be considered first?

• a.Eliminating the hazard entirely✓
• b.Providing personal protective equipment (PPE)
• c.Posting a warning sign
• d.Writing the hazard into a safety manual

The hierarchy of controls ranks protections from most to least effective: elimination, substitution, engineering controls, administrative controls, and finally PPE. Removing the hazard entirely is best because it does not depend on worker behavior or equipment holding up. PPE is the last line of defense — it only reduces exposure and relies on correct, consistent use, so it is the least reliable control on its own.

OSHA requires that a trench or excavation be protected by sloping, shoring, or a protective (trench) box once it reaches what depth?

• a.3 feet
• b.5 feet✓
• c.10 feet
• d.15 feet

Under OSHA's excavation standard (29 CFR 1926.652), a protective system — sloping/benching, shoring, or a trench box (shield) — is generally required for trenches 5 feet deep or greater (unless the excavation is entirely in stable rock). A registered professional engineer must design protection for trenches deeper than 20 feet. Cave-ins are frequently fatal, so a competent person must inspect excavations daily.

Who is responsible for providing a safe workplace and requiring the use of appropriate personal protective equipment on a job site?

• a.Only the individual workers themselves
• b.Only the equipment manufacturer
• c.Only OSHA inspectors
• d.The employer✓

Under the OSH Act's General Duty Clause and OSHA standards, the employer has the primary legal duty to furnish a workplace free from recognized hazards, to assess the job for hazards, and to provide and require appropriate PPE (often at no cost to the employee). Workers must follow safety rules and use provided equipment, but the core obligation to create a safe workplace rests with the employer.

An employee is injured while framing a house during work hours. Which system is designed to cover the employee's medical bills and lost wages regardless of who was at fault?

• a.The employee's personal auto insurance
• b.Workers' compensation insurance✓
• c.A performance bond
• d.The building permit fee

Workers' compensation is a no-fault system: an employee injured on the job receives medical care and partial wage replacement without having to prove the employer was negligent, and in exchange the employer is generally protected from most injury lawsuits. Carrying required workers' compensation coverage is a fundamental legal obligation for contractors with employees. A bond and a permit serve entirely different purposes.

Under the federal Fair Labor Standards Act (FLSA), a covered nonexempt employee must generally be paid overtime for hours worked beyond:

• a.8 hours in a single day, in every state
• b.35 hours in a week
• c.40 hours in a workweek, at one-and-one-half times the regular rate✓
• d.60 hours in a week, at the regular rate

The FLSA sets the federal overtime rule: covered nonexempt employees must receive at least 1.5 times their regular rate for hours worked over 40 in a workweek. The federal standard is weekly, not daily (some states add their own daily-overtime rules, but the nationwide FLSA baseline is the 40-hour workweek). Misclassifying workers to dodge overtime is a common and costly violation.

Which factor most strongly suggests a worker should be classified as an EMPLOYEE rather than an independent contractor?

• a.The business controls how, when, and where the work is done and provides the tools✓
• b.The worker runs an independent business serving many clients and sets their own methods
• c.The worker supplies their own tools and can profit or lose based on their own decisions
• d.The worker is free to accept or reject jobs from many different companies

The central test for classification is the degree of control and independence. When the business directs how, when, and where the work is performed and supplies the tools, the worker looks like an employee. Independent contractors typically control their own methods, invest in their own tools, serve multiple clients, and bear the risk of profit or loss. Misclassifying employees as contractors to avoid taxes, overtime, and workers' comp is a serious and heavily penalized violation.

What is the purpose of Form I-9 that a contractor completes for each new hire?

• a.To calculate the employee's overtime rate
• b.To register the employee with the local building department
• c.To order the employee's personal protective equipment
• d.To verify the employee's identity and legal authorization to work in the United States✓

The federal Form I-9 is used to verify each new employee's identity and their authorization to work in the United States, as required by immigration law. Employers must complete and retain an I-9 for every employee and review acceptable documents. It is separate from tax forms (like the W-4) and from any safety, permitting, or payroll-rate functions.

What is the primary purpose of a building permit and the inspections that go with it?

• a.To generate extra tax revenue with no benefit to the public
• b.To confirm that the proposed work meets the applicable building codes for safety and to allow official inspection of the work✓
• c.To guarantee the contractor will make a profit on the job
• d.To replace the need for a written contract with the owner

A building permit is the jurisdiction's authorization to perform construction that meets the adopted building codes, and the required inspections verify that the work actually complies at key stages. The core purpose is protecting public health and safety — sound structures, safe electrical and plumbing systems, and proper egress. Permits are not a revenue trick, a profit guarantee, or a substitute for the owner-contractor contract.

Before a newly constructed building may be legally occupied, the building department typically must issue a:

• a.Certificate of occupancy✓
• b.Lien waiver
• c.Bid bond
• d.Change order

A certificate of occupancy (CO) is the document the building official issues after final inspections confirm the building complies with the code and is safe to occupy for its intended use. Occupying a building without a required CO can lead to fines and forced vacancy. A lien waiver relates to payment, a bid bond to the bidding process, and a change order to scope changes — none of them authorize occupancy.

A contractor must set a new house a minimum distance from the property line. Which type of rule most directly governs this required setback?

• a.The electrical code
• b.OSHA fall-protection standards
• c.Local zoning ordinances✓
• d.The workers' compensation statute

Setbacks — the minimum required distances between a structure and the property lines — are established by local zoning ordinances, which regulate how land may be used and where buildings may be placed. Building codes govern how a structure is built (its safety and construction), while zoning governs where and what may be built. Distinguishing zoning (land use) from building codes (construction standards) is a fundamental concept for contractors.

In Nevada, a contractor's monetary limit (the largest single contract or project the license permits) is set from the financial statement filed with the State Contractors Board. When an applicant seeks a monetary limit of $1,000,000 or more, what kind of financial statement must be submitted?

• a.A federal income-tax return for the most recent year only
• b.A handwritten net-worth estimate signed by the applicant
• c.A financial statement reviewed or audited by an independent CPA✓
• d.No financial statement is required once the limit exceeds $1,000,000

Nevada ties the monetary limit to the financial statement the applicant files. For a limit of $1,000,000 or more, the Board requires a reviewed or audited statement prepared by an independent CPA, giving stronger assurance of the contractor's capacity to perform larger work.NRS 624.260; NAC 624 (financial statement / monetary limit)

A Nevada applicant's financial statement shows current assets of $180,000 and current liabilities of $110,000. What working capital will the Board consider?

• a.$70,000✓
• b.$290,000
• c.$110,000
• d.$160,000

Working capital = current assets - current liabilities = $180,000 - $110,000 = $70,000. Working capital measures short-term financial strength and is one basis the Board uses when setting a contractor's monetary limit.Construction Business & Law Manual for Nevada (working capital = current assets - current liabilities)

Before a Nevada license is issued, the applicant must post a contractor's license bond set by the Board according to the applicant's monetary limit. Within what range does that bond generally fall?

• a.A flat $10,000 for every contractor regardless of size
• b.From $1,000 to $500,000, scaled to the monetary limit✓
• c.From $50,000 to $1,000,000
• d.No bond is required in Nevada

Under NRS 624.270 the license bond runs from $1,000 up to $500,000, set by the Board in proportion to the monetary limit. The bond gives injured owners, workers, and suppliers a source of recovery if the contractor violates the licensing law.NRS 624.270 (contractor's license bond)

New Nevada contractors licensed for residential work pay into the Residential Recovery Fund in addition to application and biennial fees. What is that fund's purpose?

• a.To reimburse the State Contractors Board's staff salaries
• b.To pay the contractor's own workers' compensation claims
• c.To fund apprenticeship training statewide
• d.To compensate certain homeowners who suffer actual damages from an act or omission of a licensed residential contractor✓

The Residential Recovery Fund (NRS 624.470 et seq.) reimburses eligible owners of single-family residences for actual damages caused by a licensed residential contractor's misconduct when they cannot otherwise collect. It protects only owners who used a licensed contractor.NRS 624.470 et seq. (Residential Recovery Fund)

A general building contractor from another state holds a passing NASCLA Accredited Commercial General Building examination result and wants to use it toward a Nevada 'B' license. How does the Nevada State Contractors Board treat the NASCLA exam?

• a.Nevada accepts the NASCLA exam in place of its own trade examination
• b.Passing NASCLA automatically licenses the contractor in Nevada
• c.Nevada does not accept the NASCLA exam; the applicant must pass Nevada's own trade and CMS (Business & Law) examinations, though reciprocity may be available separately by endorsement✓
• d.Nevada accepts NASCLA only for residential licenses

Unlike many states, Nevada does not accept the NASCLA exam. An applicant must pass Nevada's own trade exam and the CMS Business & Law exam. Nevada offers endorsement reciprocity with certain states, but the CMS exam is never waived.NRS Chapter 624 (examination and endorsement); NASCLA participation policy

Nevada groups contractor licenses into three broad classifications. Which pairing is correct?

• a.Class A - Engineering; Class B - Building (general); Class C - specialty/trade✓
• b.Class A - residential only; Class B - commercial only; Class C - engineering
• c.Class A - plumbing; Class B - electrical; Class C - general building
• d.Class A - Building; Class B - Engineering; Class C - does not exist

Nevada uses Class A (Engineering), Class B (General Building), and Class C (the specialty/trade classifications, of which there are dozens). Knowing which classification a scope of work falls under is essential to bidding legally.NRS 624.215 (classifications A, B, C)

Nevada's CMS (Construction Management Survey) Business & Law examination has 60 scored questions and is open book. How many correct answers are required to pass?

• a.30
• b.45✓
• c.42
• d.54

A candidate must answer 45 of the 60 scored questions correctly, which is 75%. Because the exam is open book, effective use of the Construction Business & Law Manual for Nevada is a major part of preparation.NSCB CMS Business & Law examination (60 scored questions, open book)

To qualify for a Nevada contractor's license, how much relevant experience must the qualifying individual generally show?

• a.Ten years, with no substitutions allowed
• b.Six months of any construction work
• c.No experience at all if the CMS exam is passed
• d.Four full years of relevant experience within the immediately preceding 15 years, with limited substitution of education for up to 3 of those years✓

Nevada requires four full years of relevant experience within the prior 15 years. Education or related training may substitute for up to three years, but at least one year of hands-on experience is expected. The qualifying individual carries this experience for the license.NRS 624.260 (experience requirement)

A Nevada contractor's job has $80,000 of total cost, and she wants a 20% profit margin on the selling price. What must the bid (selling price) be?

• a.$96,000
• b.$100,000✓
• c.$88,000
• d.$16,000

For a target margin, divide cost by (1 - margin): $80,000 / (1 - 0.20) = $80,000 / 0.80 = $100,000. Simply adding 20% to cost ($96,000) yields only a 16.7% margin - the classic markup-vs-margin trap.Construction Business & Law Manual for Nevada (margin: price = cost / (1 - margin))

In preparing a competitive bid, what is the primary purpose of a quantity takeoff?

• a.To set the profit margin the owner will accept
• b.To record the retainage the owner will withhold
• c.To measure and count the material and work quantities shown on the plans so they can be priced✓
• d.To determine the contractor's monetary limit with the Board

A quantity takeoff is the systematic measuring and counting of the materials and work quantities from the drawings and specifications, so each item can be priced. It is the foundation of an accurate estimate; errors here flow straight into the bid.Construction Business & Law Manual for Nevada (quantity takeoff)

Under Nevada law, a licensed contractor who performs residential improvement work must generally provide the owner with what before the work begins?

• a.Only an oral estimate of the price
• b.Nothing in writing until the job is complete
• c.A copy of the contractor's most recent tax return
• d.A written contract signed by both parties that describes the work, the price, and the payment schedule✓

Nevada requires a written agreement for residential improvement work, signed by the parties and describing the scope, price, and payment terms. A clear written contract protects both the owner and the contractor and is expected by the Board.NRS 624.600 (written contract for residential work)

During a project the owner requests additional work that was not in the original scope. What is the proper instrument to authorize the added work, price, and time?

• a.A mechanic's lien
• b.A written change order signed by the parties✓
• c.A notice of completion
• d.A performance bond

Added or changed scope should be documented by a written change order that states the added work, its price, and any schedule impact, signed by both parties before the work proceeds. Verbal changes are a leading cause of payment disputes.Construction Business & Law Manual for Nevada (change orders)

Which statement about Nevada state taxes affecting a contracting business is correct?

• a.Nevada imposes a personal income tax but no corporate income tax
• b.Nevada imposes a 9% corporate income tax on all profits
• c.Nevada imposes neither a personal nor a corporate income tax, but does levy a Modified Business Tax (a payroll tax) on wages✓
• d.Nevada imposes a flat 5% personal income tax

Nevada has no personal or corporate income tax. It does impose a Modified Business Tax on wages (a payroll-based tax) and a Commerce Tax on large gross revenues, so a contractor still has state tax obligations to plan for.NRS Chapter 363B (Modified Business Tax); Nevada has no state income tax

Separate from what is withheld from the worker, how much FICA (Social Security plus Medicare) must a Nevada employer pay as its own matching share on $3,000 of wages that are below the Social Security wage base?

• a.$229.50✓
• b.$186.00
• c.$459.00
• d.$90.00

The employer matches the employee's FICA dollar for dollar: 6.2% Social Security + 1.45% Medicare = 7.65%. 7.65% x $3,000 = $229.50. The employee pays another $229.50, for 15.3% combined.IRS Circular E, Pub. 15 (FICA: 6.2% Social Security + 1.45% Medicare employer match)

On Nevada public-works projects above the statutory threshold, contractors must pay no less than the applicable prevailing wage. Which official determines Nevada's prevailing wage rates?

• a.The local homeowners' association
• b.The Nevada Labor Commissioner✓
• c.The general contractor's accountant
• d.The federal Department of Housing and Urban Development

Under NRS Chapter 338, the Nevada Labor Commissioner determines and publishes the prevailing wage rates that apply to qualifying public-works contracts. Contractors on those jobs must pay at least those rates and keep certified payroll records.NRS 338.030 (prevailing wage; Labor Commissioner)

A Nevada contractor pays a framer by the hour, sets his daily schedule, and supplies all the tools, but issues him a 1099. On audit, how is the worker most likely classified?

• a.As an independent contractor, because a 1099 was issued
• b.As a volunteer, because no withholding was taken
• c.Classification cannot be reviewed once a 1099 has issued
• d.As an employee, because the contractor controls the manner and means of the work✓

The right to control the manner and means of the work - schedule, tools, and methods - makes someone an employee regardless of the paperwork. Issuing a 1099 does not convert an employee into an independent contractor, and misclassification exposes the contractor to back payroll taxes and penalties.IRS Publication 15-A (common-law control test)

Workplace safety on Nevada construction sites is enforced primarily by which agency?

• a.The Nevada State Contractors Board's examination division
• b.The U.S. Environmental Protection Agency
• c.Nevada OSHA, part of the Division of Industrial Relations, which operates an OSHA-approved state plan✓
• d.There is no workplace-safety enforcement in Nevada

Nevada runs its own OSHA-approved state plan through Nevada OSHA within the Division of Industrial Relations (DIR). It enforces standards at least as effective as federal OSHA, so contractors answer to the state program on jobsite safety.NRS Chapter 618 (Nevada OSHA / Division of Industrial Relations)

A work-related fatality occurs on a Nevada jobsite. Within how many hours must the employer report it to the OSHA authority?

• a.24 hours
• b.72 hours
• c.8 hours✓
• d.30 days

A work-related fatality must be reported within 8 hours of the employer learning of it. An in-patient hospitalization, amputation, or loss of an eye carries a 24-hour reporting clock. Swapping the 8-hour fatality clock for 24 hours is a common trap.29 CFR 1904.39 (severe-injury reporting), applied through Nevada OSHA

A surety bond required of a Nevada contractor differs from ordinary insurance in what key way?

• a.It transfers the contractor's own risk with no repayment obligation
• b.It is a three-party arrangement, and if the surety pays a claim the contractor must reimburse the surety✓
• c.It covers the contractor's own employees for on-the-job injuries
• d.It is legally identical to a general liability policy

A surety bond is a three-party guarantee among the principal (contractor), obligee (the party protected), and surety. If the surety pays a claim, the contractor must reimburse it. Insurance is a two-party contract that transfers the insured's own risk with no repayment.Construction Business & Law Manual for Nevada (surety bonds vs. insurance)

Which coverage must a Nevada contractor that has employees carry?

• a.No coverage is required in Nevada
• b.Industrial insurance (workers' compensation) covering its employees✓
• c.Flood insurance on every jobsite
• d.A life insurance policy on each worker

Nevada requires employers, including contractors, to carry industrial insurance (workers' compensation) for their employees. Proof of coverage is a condition of licensure, and working without it exposes the contractor to penalties and stop-work action.NRS Chapter 616B (industrial insurance / workers' compensation)

A Nevada subcontractor or supplier without a direct contract with the owner wants to preserve mechanic's-lien rights on a residential project. What must it typically serve, and when?

• a.A Notice of Right to Lien, generally within 31 days after first furnishing labor or materials✓
• b.A Notice to Owner within 45 days after last furnishing
• c.Nothing; lien rights are automatic in Nevada
• d.A claim of lien within 10 days of starting work

Under NRS 108.245, a lien claimant who does not contract directly with the owner must serve a Notice of Right to Lien, generally within 31 days after first delivering labor or materials, to preserve lien rights. Missing this early notice can defeat the lien.NRS 108.245 (notice of right to lien)

In a construction schedule, the critical path is best described as the path that:

• a.Is the shortest route through the network
• b.Carries the most float, giving the schedule flexibility
• c.Has the fewest activities regardless of their durations
• d.Is the longest chain of dependent activities, which sets the shortest possible completion time and has zero float✓

The critical path is the longest chain of dependent activities through the network. Because no other path is longer, it fixes the earliest the project can finish, and every activity on it has zero float, so any slip delays the whole project day for day.Construction Business & Law Manual for Nevada (CPM scheduling)