1. A contractor who holds a Class "B" General Building Contractor license may perform work in which situation?
- a.Framing, roofing, and drywall on a new home✓
- b.Grading and paving a parking lot only
- c.Installing a new electrical panel only
- d.Replacing underground water mains only
A Class B licensee may take contracts for structures and can self-perform two or more unrelated subcontractor trades. Installing only an electrical panel or replacing water mains would require C-specialty licenses, and grading/paving is Class A work.
Bus. & Prof. Code §70572. An employee works 10 hours on Monday. Under California law, how many overtime hours must be paid?
- a.Zero overtime hours
- b.1 hour at 1.5× rate
- c.2 hours at 2× rate
- d.2 hours at 1.5× rate✓
California requires overtime (1.5×) for hours worked beyond 8 in a single workday. Working 10 hours means 2 overtime hours at 1.5× the regular rate.
Labor Code §5103. When must a 30-minute meal break be provided to an employee?
- a.After 5 hours of work✓
- b.After 4 hours of work
- c.After 6 hours of work
- d.After 8 hours of work
Employers must provide a 30-minute unpaid meal period no later than the end of an employee's fifth hour of work. The break can be waived by mutual agreement if the shift is 6 hours or less.
Labor Code §5124. A contractor estimates a job will cost $80,000 in direct costs and wants a 25% markup on cost. What should the bid price be?
- a.$95,000
- b.$100,000✓
- c.$106,667
- d.$120,000
Markup on cost means adding the markup percentage to the cost: $80,000 × 1.25 = $100,000. Markup on cost and margin on sales produce different results — always clarify which method is being used.
5. A contractor takes out a $50,000 equipment loan at 8% annual interest. What is the simple interest owed for 6 months?
- a.$2,000✓
- b.$4,000
- c.$8,000
- d.$400
Simple interest = Principal × Rate × Time = $50,000 × 0.08 × 0.5 = $2,000. For 6 months (half year), use 0.5 as the time factor.
6. Under California law, a home improvement contract is required for residential work when the total contract price (labor AND materials) is at least:
- a.$200
- b.$500✓
- c.$1,000
- d.$2,500
California requires a written home improvement contract for any work on a residential property totaling $500 or more, including both labor and materials (B&P §7159). Note: this $500 written-contract threshold is a DIFFERENT number from the $1,000 unlicensed minor-work threshold under §7048 — SB 517 amended §7159 for 2026 (subcontractor-disclosure rules), but left this $500 figure in place, so do not confuse the two.
Bus. & Prof. Code §71597. A contractor may demand final payment from the homeowner:
- a.Upon substantial completion of the project✓
- b.When 50% of the work is complete
- c.After all materials are delivered to the site
- d.At the start of the project
A contractor may not demand or accept final payment until the project is substantially complete. Demanding payment before this point is a violation of California Contractors' Law.
Bus. & Prof. Code §71598. A subcontractor begins work on a private project on March 1. To preserve lien rights, the preliminary notice must be served by:
- a.March 1
- b.March 21
- c.April 1
- d.Within 20 days of first furnishing labor or materials✓
On private works, preliminary notices must be served within 20 days of first furnishing labor, services, equipment, or materials. Serving late does not eliminate lien rights entirely but limits them to work performed within 20 days before service.
Civil Code §82049. Which document is required for EVERY California employer with one or more employees?
- a.A written safety data sheet for each chemical
- b.An Injury and Illness Prevention Program (IIPP)✓
- c.A confined space entry permit
- d.An OSHA 300 log
California Labor Code §6401.7 requires every employer to establish, implement, and maintain an Injury and Illness Prevention Program (IIPP). This is the foundation of California's workplace safety system.
Labor Code §6401.710. Prevailing wage requirements apply to public works projects with a contract value of at least:
- a.$500
- b.$1,000✓
- c.$15,000
- d.$25,000
California prevailing wage law applies to public works contracts of $1,000 or more. There is no exemption for small public works projects.
Labor Code §1771