What is on the CSLB Law and Business exam, section by section?

5 · Contract Requirements and Execution 21%

CSLB’s subtopics

The largest section on the exam, and the one that follows a job from the estimate to the final check. Expect questions on how a bid is put together and what happens when the numbers move; on what a written contract with a homeowner has to contain and what a customer may cancel; on how a project is organized and scheduled once it is signed; and on how progress payments, retention and change orders work between owner, contractor and sub. It is business decisions written into legal documents, which is why one question in five lands here.

On CSLB’s resource list, contract and payment rules live in the California Contractors License Law & Reference Book.

3 · Employment Requirements 20%

CSLB’s subtopics

The second-largest section, and the one most tradespeople have never had to study, because as an employee you were on the other side of it. It covers becoming an employer: what you must do when you hire someone, what supervision and training you owe a crew, which records you have to keep and for how long, and how payroll actually runs — withholding, deposits, reporting. If you have only ever been paid, this is the section where the exam stops being about construction.

CSLB lists two payroll references for the exam: EDD’s California Employer’s Guide (DE 44) and IRS Publication 15 (Circular E), Employer’s Tax Guide.

2 · Business Finances 15%

CSLB’s subtopics

The money side of running the company rather than the job: keeping cash in the account when payments arrive later than bills, building and holding a budget, the taxes a contracting business owes and when, and reading the statements that say whether the year worked. CSLB warns in the same guide that “some questions require mathematical computation” and that a calculator is provided, and this is the section where that usually means something — cost, overhead and depreciation arithmetic rather than formulas to memorize.

CSLB’s list includes the NASCLA Contractors Guide to Business, Law and Project Management, 14th edition, for business-management topics.

7 · Safety 14%

CSLB’s subtopics

Safety as a legal obligation of the licensee, not as jobsite habit. The three subtopics split it cleanly: what you have to train your people on and what you have to report when something happens; the general requirements that apply to a California jobsite; and what changes the moment hazardous or unknown material turns up in the work. Knowing how to work safely is not the same as knowing what the state requires you to document, and the exam tests the second one.

CSLB’s reference here is Cal/OSHA: the State of California General Industry & Electrical Safety Orders and Construction & Electrical Safety Orders, California Code of Regulations, Title 8.

1 · Business Organization and Licensing 13%

CSLB’s subtopics

How the business is set up and how the license attaches to it. Company organization means choosing between a sole ownership, a partnership, a corporation and an LLC, and knowing who the qualifying individual is in each (the person whose experience and exams the license rests on). Licensing requirements means what it takes to get a license, keep it active and in good standing, and what CSLB can do about it. Advertising and subcontracting means what has to appear when you put your name in front of the public, and what you may and may not hand to a sub.

CSLB lists two of its own publications here: Get Licensed to Build and Maintain and Change Your License.

4 · Insurance and Liens 12%

CSLB’s subtopics

Two different things CSLB puts in one section: the coverage you are required or advised to carry, and what you do when you are not paid. Workers’ compensation has its own rules about when a contractor must carry it. Business insurance covers the other policies a contracting business runs on. “Liens and other remedies” is the deadline-driven half — preliminary notices, mechanics liens, releases, stop payment notices — where the answer usually turns on a number of days rather than on judgement. Note that liens sit here, not in the contracts section, and not in Public Works.

Lien and notice deadlines sit in the California Civil Code; the plain-English versions, each with its statute, are in our glossary.

6 · Public Works 5%

CSLB’s subtopics

The smallest section, and a section in its own right rather than a corner of Safety or of Contracts. It is about what changes when the money is public: the wage rates you are required to pay on a public job and the payroll records that prove you paid them, the bonds a public project requires, and the insurance that goes with it. Five percent is small, but it is not zero, and the material is self-contained enough that it is cheap to learn late.

CSLB’s reference for it is the Department of Industrial Relations Public Works Manual. The California Labor Code is also on CSLB’s resource list.

3½ hours, on a computer

CSLB: “You will be given 3-1/2 hours to complete each examination,” and “All exams are taken on a computer and consist of multiple-choice questions.” PSI shows one question at a time, with the minutes remaining at the top of the screen. The tutorial before the exam, up to 15 minutes, does not count against your time.

CSLB’s study guide adds the format: four choices per question, written so there is “only one BEST answer,” some questions requiring math, a calculator provided, and — worth remembering at minute 200 — “There is no penalty for guessing.”

How many questions? CSLB doesn’t publish it

Neither CSLB’s study guide, its examination FAQ, its Get Licensed to Build guide nor PSI’s candidate bulletin states a question count for the Law and Business exam, as of 22 September 2026. Numbers you see quoted elsewhere do not come from either of them.

The passing score is not published either. CSLB’s answer, in full: “The applicant can inquire with CSLB regarding the percentage needed to pass the exam as it varies for each exam.” If you want the number, ask CSLB directly.

$51.43, paid to PSI, for every registration

PSI’s bulletin lists a single “EXAMINATION FEE” of $51.43 and says: “The fee is for each registration, whether you are taking the examination for the first time or repeating it.” You pay PSI, not CSLB, and registration fees are “NOT REFUNDABLE OR TRANSFERABLE.”

Taking a trade exam too? CSLB: “Each exam is a separate fee.” $51.43 is what PSI’s bulletin listed on 22 September 2026; confirm the current amount in your PSI account before you pay.

A passing report shows no score

You get a printed report before you leave the test center, and what it says depends on the outcome. CSLB: “The failing score report will indicate the candidate’s overall score, including the number of items answered correctly. The passing score report does not show the overall score.”

Fail and you also get detail: “you are provided a breakdown by section of how many questions you answered correctly and incorrectly” — the same seven sections above. The questions themselves are never released, and PSI will not read a score over the phone. How to turn a failing report into a study list.

It is offered in Spanish

CSLB: “Spanish versions of 10 exams commonly taken by candidates are available, including Law and Business, B – General Building” and eight trade exams. CSLB publishes the study guide in Spanish too, with the same seven sections and the same weights.

One rule that surprises people: candidates who ask for a translator on one of those ten exams “are required to take the Spanish versions.” Esta página en español.

The trade exam is separate

Law and Business is one of two exams for most applicants; the other is the trade exam for your classification. They are scored separately, paid for separately, and CSLB lets you choose the timing: “Each exam is a separate fee and can be scheduled on the same day or at different times, depending on your preference.”

Both sit inside one clock. CSLB gives an accepted application 18 months to pass, and a failed exam means waiting “21 calendar days to pay and reschedule.” Pass one and fail the other and you retake only the one you failed, as results are good for five years.

Three sections carry more than half the exam

Contract Requirements and Execution (21%), Employment Requirements (20%) and Business Finances (15%) add up to 56% of the questions. None of the three is about how to build anything. If you came to this exam from a trade, that is the honest headline: the majority of the paper is the business you are about to run, not the work you already do.

Small sections are still worth finishing

Public Works is 5% and Insurance and Liens is 12%. Both are narrow, deadline-and-rule material that can be learned in a short, contained stretch, which makes them the cheapest points on the exam per hour spent. Leaving a 5% section entirely blank is a choice to give away one question in twenty before you start.

Every section is on the paper

There is no section you can skip, and a failing report tells you exactly which ones cost you, section by section. Weights are for allocating hours, not for choosing what to ignore — and CSLB marks them “approximate,” so treat 21% as bigger than 15%, not as an exact count of questions.

Guess every question you cannot answer

CSLB’s own test strategy, quoted: “There is no penalty for guessing. If you are unsure about a particular question, it is better to answer the question than to leave the question blank.” With four choices and no penalty, a blank is strictly worse than a guess. Watch the clock so you never leave one.

A, B, B-2 and every C classification

There is no classification whose applicants skip Law and Business by default. The requirement comes from the statute: the written examination “shall include pertinent questions relating to the laws of this state and the contracting business and trade” (§7065(a)). C-61 Limited Specialty is the classification with no trade exam — and its applicants still take Law and Business.

Reciprocity waives the trade exam, not this one

If your trade exam is waived because you are licensed in one of the five reciprocity states, this exam is the one that remains. CSLB’s application form: the Law and Business exam “will still be required if the applicant has not passed that examination within the last five (5) years.” The five states, and what reciprocity actually waives.

Exception 1: you already passed it, within five years

Passing is good for five years. CSLB: “Exam results are good for five years. If you pass one exam and fail the other, you only have to retake and pass the one you failed within five years.” The same five-year rule is what excuses a reciprocity applicant from sitting Law and Business again, in the wording quoted above. The statute behind it is §7065(d), and it is an exemption rather than a discretionary waiver: “No examination shall be required of a qualifying individual if, within the five-year period immediately preceding the application for licensure, the qualifying individual has either personally passed the written examination for the same classification being applied for,” or served as the qualifier for a licensee in good standing in that classification in the same window.

Cal. Bus. & Prof. Code §7065(d); CSLB form 13A-1 (rev. 01/2026), Application for Original Contractor License; CSLB, Get Licensed to Build, Q19.

Exception 2: a §7065.1 waiver

Section 7065.1 is the waiver provision CSLB’s own application routes people to — form 13A-1 says that if you qualify for a waiver, “do not use this application – please instead use the Application for Original Contractor License – Waiver (7065) (form 13A-1A)” — and it is one of the provisions that can reach the whole examination rather than only the trade half. It opens: “Notwithstanding Section 7065, the registrar may waive the examination for a contractor’s license under any of the following circumstances,” and lists three — five of the last seven years on a licensee’s personnel of record in the same classification; an immediate family member keeping an existing family business going; and a long-serving supervisory employee replacing a company’s qualifier. Each has conditions, and it says may.

Cal. Bus. & Prof. Code §7065.1 (amended Stats. 2010, Ch. 698, Sec. 6 (SB 392), effective January 1, 2011); form 13A-1, Examination Waivers and Exemptions.

§7065.1 is not the only waiver in the code

Two neighbouring sections do the same work for different applicants, so it is worth knowing they exist before you conclude no waiver fits you. §7065.2 opens with the same operative words — “Notwithstanding Section 7065, the registrar may waive the examination for a contractor’s license” — for a different applicant: one who “has previously held a valid contractor’s license in this state and has been acting in the capacity of a contractor for the United States government in a position exempt from licensure under this chapter.” §7065.3 is narrower: it lets an existing licensee add a classification “without further examination” on a conclusive showing of experience, under conditions that include four years as a journeyman, foreman, supervising employee or contractor in that classification within the last 10. CSLB’s own form points past all of them: “See BPC sections 7065 – 7065.4 for a complete list.”

Cal. Bus. & Prof. Code §7065.2 (added Stats. 1987, Ch. 630, Sec. 1); §7065.3 (amended Stats. 2013, Ch. 319, Sec. 7 (SB 822), effective January 1, 2014); form 13A-1, Examination Waivers and Exemptions. Reciprocity has its own section, §7065.4, and it reaches the trade exam only — see the card above.

Start with CSLB’s own book

CSLB’s answer to “How can I prepare?” is to review the current edition of the California Contractors License Law & Reference Book, and it says free access is on CSLB’s website. The study guide lists the rest: DE 44 and IRS Publication 15 for payroll, the DIR Public Works Manual, Cal/OSHA’s Title 8 safety orders, the California Labor Code, and the NASCLA business guide.

Split your hours by weight

Give the 21%, 20% and 15% sections the most time, because that is where more than half the questions are. Keep the 5% section on the list. Then work the way the exam runs: closed book, four choices, one best answer, and a clock. How the study options compare — self-study, courses, and what each costs.

Nail the vocabulary early

Most of what makes this exam feel foreign is words: RMO, RME, preliminary notice, stop payment notice, certified payroll, retention. They are not hard once defined, and a question you misread is a question you lose. The plain-English glossary defines 32 of them, each with its statute.