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CSLB Law & Business Exam Cram Sheet (2026)
Những dữ kiện quan trọng nhất của kỳ thi CSLB Luật & Kinh doanh, nhóm theo trọng số chủ đề thực tế. Mỗi con số và thời hạn bên dưới lấy từ các chương CSLB đã được kiểm chứng của PrepPass, kèm trích dẫn luật California. In ra và luyện những phần bạn sai.
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Most-tested numbers, deadlines & dollar figures
The figures that decide the most questions. Memorize these first.
| Contractor license bond | $25,000B&P §7071.6 |
|---|---|
| Bond of Qualifying Individual | $25,000B&P §7071.9 |
| Disciplinary bond | $15,000B&P §7071.17 |
| License required (minor-work exemption) | Jobs $1,000+ (labor + materials). Old $500 figure was raised.B&P §7048 |
| Written home-improvement contract required | When labor + materials exceeds $500B&P §7159 |
| Home-improvement down payment cap | Lesser of $1,000 or 10% of the priceB&P §7159 |
| Right to cancel (home improvement) | 3 business days · 5 for seniors 65+B&P §7159 |
| Preliminary notice (subs/suppliers) | Within 20 days of first furnishingCivil §8204 |
| Record a mechanics' lien | After a notice of completion: 60 days (direct contractor) / 30 days (others). No notice: 90 days from completion.Civil §8412 / §8414 |
| Foreclose (enforce) the lien | Within 90 days of recordingCivil §8460 |
| Lien release bond | 125% of the lien amountCivil §8424 |
| GC pays subs after being paid | Within 7 daysCivil §8814 |
| Overtime | 1.5× after 8 hrs/day or 40 hrs/week · 2× after 12 hrs/dayLabor §510 |
| Final pay | Discharge → immediately · Quit → last day (72+ hr notice) or within 72 hrsLabor §201–202 |
| Waiting-time penalty | Up to 30 days of wagesLabor §203 |
| Prevailing wage applies | Public works contracts of $1,000+Labor §1771 |
| Payment bond on public works | Required over $25,000Civil §9550 |
| Fall protection | Required at 6 ft or more8 CCR §1670 |
| Trench protective system | Required at 5 ft deep or more8 CCR §1541.1 |
| Report a serious injury/illness/death | To Cal/OSHA within 8 hoursLabor §6409.1 |
Contracts
~21% của bài thi- Written home-improvement contract
- Required when labor + materials exceeds $500; must state license number, dates, scope, price, and payment schedule; given to owner before work starts.· B&P §7159
- Down payment cap
- Lesser of $1,000 or 10% of the price (before finance charges). $5,000 job → $500 max; $30,000 job → $1,000 max.· B&P §7159
- Progress payments
- Tied to work performed / materials delivered — billing can't run ahead of the work done.· B&P §7159
- 3-day right to cancel
- By midnight of the 3rd business day, no penalty; seniors 65+ get 5 business days; waivable only for a genuine emergency repair.· B&P §7159
- Change orders
- Must be in writing and signed by both parties before the extra work proceeds; unsigned 'extras' are often uncollectible.· B&P §7159
- New home construction
- Governed by its own statute — the $1,000 / 10% down-payment cap does NOT apply; down payment negotiated but reasonable.· B&P §7164
- Bid: lowest responsible & responsive
- Responsive = follows all bid instructions; responsible = qualified, licensed, bonded, capable.
- Bid bond
- Usually 10% of the bid; guarantees the winner signs and posts a performance bond.
- Withdraw a bid
- Only for a genuine clerical/math error (not judgment), with prompt written notice — generally within 5 days of bid opening.
- Contract cost risk
- Fixed-price/lump-sum → contractor bears overruns. Cost-plus & time-and-materials → owner bears cost risk. Unit-price → total varies with quantities.
- Critical path
- The longest chain of dependent activities; delay a critical task and the whole job finishes late. 'Float' = slack on non-critical tasks.
- Prompt-payment penalty
- Wrongful late payment ≈ 2% per month on the amount withheld, plus attorney's fees (no penalty in a good-faith dispute).
- Retention
- Often 5–10% of each progress payment, held until completion and released after acceptance.
- Liquidated damages
- A set $/day for unexcused late completion; enforceable only as a reasonable estimate of harm — a penalty clause is void.· Civil §1671
- Residential arbitration clause
- Must be set apart, in specified type, near the signature line, with a statutory jury-trial-waiver disclosure signed separately.· B&P §7191
- Abandonment
- Abandoning a project without legal excuse is grounds for CSLB discipline.· B&P §7107
Employment & Labor
~20% của bài thi- Form I-9
- Complete within 3 business days of the start date for every worker.· 8 USC §1324a
- New-hire report to EDD
- Within 20 days of the first day of work (form DE 34).· UI Code §1088.5
- ABC test
- All three prongs must be true for independent-contractor status: (A) free from control, (B) work outside your usual business, (C) worker has an independent trade. One fails → employee.· Labor §2750.3
- Willful misclassification
- Civil penalties of $5,000–$25,000 per violation, plus back taxes and unpaid overtime.· Labor §226.8
- Overtime
- 1.5× after 8 hrs/day or 40 hrs/week; 2× after 12 hrs/day; 7th consecutive day = 1.5× first 8 hrs then 2×.· Labor §510
- Meal periods
- 30-min unpaid meal after 5 hrs; a second after 10 hrs.· Labor §512
- Rest breaks
- Paid 10 minutes per 4 hours worked (or major fraction).· 8 CCR §11160
- Missed break premium
- One extra hour at the regular rate for a missed meal, plus one more for a missed rest period.· Labor §226.7
- Minimum wage
- Pay the highest applicable rate (state vs. city/county); it cannot be waived.· Labor §1182.12
- Pay frequency
- At least twice a month; construction employers may pay at least biweekly.· Labor §204
- Final pay
- Discharge → all wages immediately. Quit → last day if 72+ hr notice, else within 72 hrs.· Labor §201–202
- Waiting-time penalty
- One day's wages per day late, capped at 30 days.· Labor §203
- Wage statement
- Must show all 9 required items; penalties $50 (first) then $100 per employee per period, up to $4,000.· Labor §226
- Payroll records
- Keep hours-worked and wage records at least 3 years.· Labor §1174
- Unlawful deductions
- No deductions for shortages, breakage, tools, or ordinary negligence.· Labor §221
- Accrued vacation
- Treated as wages — 'use it or lose it' is illegal; paid out at the final rate at separation.· Labor §227.3
- FEHA
- Discrimination rules apply at 5+ employees; harassment rules apply to every employer; harassment-prevention training at 5+.· Gov. §12940 / §12950.1
Financial Management
~15% của bài thi- Cash flow ≠ profit
- Cash flow is timing; you can be profitable and still unable to pay this week's bills.
- Direct vs. overhead
- Direct costs belong to one job (labor, materials, subs, permits); overhead runs the whole company (rent, insurance, admin, license fees).
- Markup vs. margin
- Markup is a % of cost; margin is a % of price. A 25% markup = a 20% margin. Convert: margin = markup / (1 + markup).
- Break-even
- Fixed costs / (1 − variable-cost ratio). $8,000 fixed at a 0.60 ratio → $20,000/month. The denominator is the contribution margin.
- Accounting equation
- Assets = Liabilities + Owner's Equity. The balance sheet is a snapshot on one date.
- Income vs. cash-flow statement
- Income statement = profit over a period; cash-flow statement = cash movement. Profit on paper ≠ cash in the bank.
- Cash vs. accrual
- Cash basis records money when it moves; accrual records when earned/incurred. Long jobs use percentage-of-completion.
- 1099-NEC threshold
- Issue a 1099-NEC to an independent contractor paid $600+ in a year; employees get a W-2.
- Estimated taxes
- Due April 15, June 15, Sept 15, Jan 15 (federal to IRS, California to the Franchise Tax Board).
- Payroll taxes
- FICA split 50/50; FUTA, CA SUI, and ETT paid by the employer; CA SDI withheld from the employee.
- EIN & EDD
- EIN (IRS) runs federal payroll/taxes; an EDD Employer Account Number runs California payroll taxes.
- Simple interest
- Principal × rate × time. $20,000 at 8% for 2 years = $3,200.
- Working capital
- Current assets − current liabilities; a current ratio above 1.0 is healthy.
Safety (Cal/OSHA)
~14% của bài thi- IIPP
- Every employer needs a written Injury and Illness Prevention Program (8 required elements) — no minimum headcount.· 8 CCR §3203
- Cal/OSHA is stricter
- Enforces Title 8 statewide; where state and federal rules conflict, the stricter California rule governs.· 8 CCR Title 8
- Report serious injury/death
- To the nearest Cal/OSHA office within 8 hours (hospitalization, amputation, loss of eye, serious disfigurement).· Labor §6409.1
- Fall protection
- Required at 6 ft or more — guardrails, personal fall arrest, or safety nets.· 8 CCR §1670
- Excavation/trenching
- Protective system (sloping, shoring, or trench box) at 5 ft or deeper; competent-person inspection daily and after rain.· 8 CCR §1541.1
- Scaffolds
- Must support 4× the intended load; erected/dismantled under a qualified person.· 8 CCR §1637
- Ladders
- Extend about 3 ft above the landing; inspect before use; firm, level footing.· 8 CCR §1675
- Confined space
- Test the atmosphere before entry, ventilate, issue a permit, station an attendant outside; never make an untrained rescue.· 8 CCR §5157
- Hazard communication
- Keep a Safety Data Sheet (16-section GHS format) for every hazardous chemical, accessible each shift; label and train.· 8 CCR §5194
- Heat illness
- ~1 quart of water per worker per hour; shade at 80°F; a 5-minute cool-down rest; high-heat procedures at 95°F.· 8 CCR §3395
- PPE
- Employer-required PPE must be provided at no cost to employees.· 8 CCR §3380
- Injury log
- Record on the Form 300 log (keep 5 years); post the Form 300A summary February 1 – April 30.· 8 CCR §14300
- Lead & asbestos & silica
- Assume lead paint before 1978; asbestos work requires Cal/OSHA registration; control respirable silica dust.· 8 CCR §1532.1 / §1529 / §1532.3
Business Organization & Licensing
~13% của bài thi- Class A
- General Engineering — fixed works needing engineering: roads, bridges, dams, pipelines.· B&P §7056
- Class B
- General Building — projects with 2+ unrelated trades, or framing/carpentry on a habitable structure.· B&P §7057
- Class C
- Specialty — 43 classifications, one trade each, examined and qualified separately.· B&P §7058
- Experience
- 4 years of journey-level (or higher) experience in the trade within the last 10 years; at least 1 year hands-on.· B&P §7068
- RMO vs. RME
- RMO = owner holding 20%+, may qualify more than one license; RME = employee with no ownership, may qualify only ONE active license.· B&P §7068
- Eligible entities
- Sole owner, partnership, corporation, LLC. A trust cannot hold a license. The license is non-transferable.· B&P §7065 / §7075.1
- Entity change
- A new legal entity (incorporating, converting, changing partners) needs a brand-new license application.· B&P §7075
- License bond
- $25,000 — protects consumers/claimants, not the contractor. A lapsed bond suspends the license.· B&P §7071.6
- Qualifier & disciplinary bonds
- Bond of Qualifying Individual $25,000 (RME, or RMO under 10%); disciplinary bond $15,000 when ordered by the CSLB.· B&P §7071.9 / §7071.17
- Display the number
- On all contracts, bids, business cards, advertising (incl. websites), and each commercial vehicle.· B&P §7030.5 / §7030
- Unlicensed bar
- An unlicensed contractor can't sue to collect for licensed work; a customer can even recover money already paid.· B&P §7031
- License required
- A license is required once labor + materials reach $1,000 (the old $500 minor-work threshold was raised).· B&P §7048
- Discipline & renewal
- Advisory → citation → suspension → revocation; citations public for 5 years. Renew every 2 years; expired 5 years = reapply.· B&P §7124.6 / §7141
Insurance, Bonds & Liens
~12% của bài thi- Workers' comp trigger
- One employee triggers mandatory coverage — no minimum headcount, in place before the first day of work.· Labor §3700
- No coverage penalty
- Automatic license suspension + stop-work order; penalties up to $10,000 per employee, capped at $100,000.· Labor §3722
- No-fault / exclusive remedy
- Benefits paid regardless of fault; workers' comp is generally the worker's only remedy against the employer.· Labor §3600 / §3602
- DWC-1 claim form
- Give the worker a DWC-1 within one working day of notice of injury.· Labor §5401
- Treatment while claim reviewed
- Up to $10,000 in medical care authorized before the claim is accepted or denied.· Labor §5402
- Temporary disability
- Pays about two-thirds of average weekly wages while recovering.· Labor §4653
- Uninsured sub
- Hiring an uninsured sub makes you the employer of its workers; an unlicensed worker is automatically your employee.· Labor §2750.5
- CGL insurance
- Covers third-party bodily injury and property damage — NOT your own employees (that's workers' comp).
- Insurance vs. surety bond
- A bond has three parties (principal, obligee, surety); the surety recovers from the contractor what it pays — a bond isn't insurance.
- Mechanics' lien
- Secures payment for work/materials on private property (can force a sale).· Civil §8200
- Preliminary notice
- Subs/suppliers serve it within 20 days of first furnishing; the prime contractor need not notice the owner.· Civil §8204
- Record the lien
- After a notice of completion: 60 days (direct contractor) / 30 days (others). No notice: 90 days from completion.· Civil §8412 / §8414
- Enforce & clear
- Foreclose within 90 days of recording; a lien release bond of 125% clears the lien from title.· Civil §8460 / §8424
- Stop payment notice
- Forces the owner or lender to withhold project funds on a private job.· Civil §8500
Public Works
~5% của bài thi- What makes it public works
- Public funds pay for the work (in whole or part) — regardless of who owns the property.· Labor §1720
- Prevailing wage applies
- On public works contracts of $1,000 or more; only contracts under $1,000 are exempt.· Labor §1771
- Prevailing wage = base + fringe
- Set by the DIR per craft and county; post the wage determination at the job site.· Labor §1773 / §1773.2
- DIR registration
- Register annually with the DIR before bidding and before award; agencies can't accept an unregistered contractor's bid.· Labor §1725.5
- Certified payroll & apprentices
- Submit certified payroll to the Labor Commissioner; employ apprentices from a DIR-approved program in the required ratio.· Labor §1776 / §1777.5
- Payment bond
- Required on public works over $25,000 — protects workers, subs, and suppliers.· Civil §9550
- No lien on public property
- The stop payment notice + payment bond replace the mechanics' lien on government land.· Civil §9350
- Overtime & penalties
- Overtime after 8 hrs/day or 40 hrs/week at the prevailing overtime rate; per-worker/per-day penalties for underpaying prevailing wage.· Labor §1815 / §1775
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Every figure above is drawn from PrepPass's fact-checked CSLB Law & Business chapters and 2025-26 law-changes reference, each carrying its California Business & Professions Code, Labor Code, Civil Code, or Title 8 (Cal/OSHA) citation.
Study aid, not legal advice — always confirm the current rule with the official source (CSLB / California Legislature). Last verified: August 13, 2026.