The CSLB Law and Business exam has 7 sections and 25 subtopics. The two biggest sections are Contract Requirements and Execution (21%) and Employment Requirements (20%). Public Works is the smallest at 5%. These weights come from CSLB's own Law and Business study guide, which says the percentages are approximate.
This page walks through each section, shows where the points are, and gives a study order based on the weights. Every fact below links to the official source it comes from.
The 7 sections and their weights
The CSLB study guide (form 13E-LAW, dated 03-2026, for exams scheduled on or after December 1, 2021) divides the exam into these sections:
| # | Section | Weight | Subtopics |
|---|---|---|---|
| 1 | Business Organization and Licensing | 13% | 3 |
| 2 | Business Finances | 15% | 4 |
| 3 | Employment Requirements | 20% | 4 |
| 4 | Insurance and Liens | 12% | 3 |
| 5 | Contract Requirements and Execution | 21% | 5 |
| 6 | Public Works | 5% | 3 |
| 7 | Safety | 14% | 3 |
| Total | 100% | 25 |
The guide marks these percentages as approximate. CSLB does not say how many questions are on the exam, so you cannot turn a percentage into an exact number of questions. Treat the weights as a guide to where to spend your study time.
Where the points are
Ranked by weight:
- Contract Requirements and Execution: 21%
- Employment Requirements: 20%
- Business Finances: 15%
- Safety: 14%
- Business Organization and Licensing: 13%
- Insurance and Liens: 12%
- Public Works: 5%
Two things stand out:
- Contracts and Employment together are about 41% of the exam. If you are short on time, start there.
- The top four sections add up to about 70%. Safety (14%) carries nearly three times the weight of Public Works (5%), so do not leave it for last.
The 25 subtopics, section by section
The subtopic names below are copied from the study guide. Each section heading links to our study notes for that section. The example rules show the kind of law each section tests; each one links to the statute or official guide it comes from.
1. Business Organization and Licensing (13%)
- Company organization
- Licensing requirements
- Advertising and subcontracting
This section covers how a contracting business is set up and what it takes to get and keep a license. Example rule: a licensee must have a contractor's bond of $25,000 on file as a condition of issuing, renewing or keeping a license (Bus. & Prof. Code §7071.6). Study notes: Business Organization and Licensing.
2. Business Finances (15%)
- Cash management
- Budget and planning
- Taxes
- Financial reporting
This is the money side of running a contracting business: cash flow, budgets, taxes and financial statements. Example rule: a Form 941 filer that reported $50,000 or less of taxes in its lookback period is a monthly schedule depositor; above $50,000, it is a semiweekly depositor (IRS Publication 15). Study notes: Business Finances.
3. Employment Requirements (20%)
- Hiring employees
- Supervising and training employees
- Evaluation and record-keeping
- Payroll
This section is about your duties as an employer, from hiring through payroll. Example rule: under the ABC test, a person paid for labor or services is an employee unless the hiring business shows that all of the test's conditions are met (Lab. Code §2775). CSLB lists the EDD California Employer's Guide (DE 44) as a study resource. Study notes: Employment Requirements.
4. Insurance and Liens (12%)
- Workers' compensation insurance
- Business insurance
- Liens and other remedies
This section covers protecting the business with insurance and getting paid through liens and related remedies. Example rule: a preliminary notice must be given no later than 20 days after the claimant first furnishes work on the project (Civ. Code §8204). Study notes: Insurance and Liens.
5. Contract Requirements and Execution (21%)
- Bidding
- Cost control
- Project organization
- Contracts
- Payments
The largest section. It covers the job from bid to final payment. Example rule: on a home improvement contract, the down payment may not be more than $1,000 or 10% of the contract amount, whichever is less (Bus. & Prof. Code §7159.5). Study notes: Contract Requirements and Execution.
6. Public Works (5%)
- Prevailing wage requirements
- Bonding requirements
- Insurance requirements
The smallest section, about work for public agencies. Example rule: except on public works projects of $1,000 or less, workers on public works must be paid at least the general prevailing rate of per diem wages (Lab. Code §1771). CSLB lists the DIR Public Works Manual as a study resource. Study notes: Public Works.
7. Safety (14%)
- Training and reporting requirements
- General safety
- Hazardous/unknown materials
This section covers Cal/OSHA safety duties on the job site. Example rule: every employer must have an Injury and Illness Prevention Program in writing that, at a minimum, names the person or persons with authority and responsibility for carrying it out (8 CCR §3203). Study notes: Safety.
How the questions work
The study guide describes the format:
- Closed book. No reference materials may be used during the exam.
- Four choices per question, written so that only one is the BEST answer.
- Some questions require math. A calculator is provided.
- No penalty for guessing. CSLB says it is better to answer a question than to leave it blank.
- Questions are written and reviewed by licensed contractors who are actively working in the trade.
CSLB's Get Licensed to Build guide adds that the exam is taken on a computer, that you have 3½ hours to complete each exam, and that the percentage needed to pass varies for each exam. You can ask CSLB about it. CSLB does not publish a fixed passing score or a question count, so be wary of sites that quote exact numbers for either.
What the math looks like
The study guide does not list which topics use the calculator. Rules with numbers in them are a natural place for it. Two examples from the sections above:
- Down payment limit. On a $25,000 home improvement contract, 10% is $2,500. The lesser of $1,000 and $2,500 is $1,000, so the limit is $1,000 (Bus. & Prof. Code §7159.5).
- Deposit schedule. A Form 941 filer with $38,000 of lookback-period taxes is under $50,000, so it is a monthly schedule depositor (IRS Publication 15).
CSLB's three sample questions
The study guide includes three sample questions. Their topics show the range of the exam:
- What decides how often an employer's payroll deposits go to the IRS? Answer: the amount of payroll liability.
- Within how many days must an "agreement to arbitrate" be returned after CSLB's Registrar mails it? Answer: within 30 calendar days.
- A construction company buys a car for general use by its sales staff. Where is its depreciation charged? Answer: general and administrative costs.
Your score report points back to these sections
The section list matters after the exam too. According to Get Licensed to Build, candidates who pass are told they passed but get no detailed score information. Candidates who do not pass see how they did on each section, and those sections match the "Content of the Examination" list in the study guide. If you need to retake, start with the sections where you scored lowest.
A 3-week study order by weight
This is our suggested plan, not a CSLB requirement. It front-loads the heaviest sections and leaves a few days for review.
| Week | Sections | Combined weight |
|---|---|---|
| 1 | 5 Contract Requirements and Execution (21%), 3 Employment Requirements (20%) | 41% |
| 2 | 2 Business Finances (15%), 7 Safety (14%) | 29% |
| 3 | 1 Business Organization and Licensing (13%), 4 Insurance and Liens (12%), 6 Public Works (5%), then mixed review | 30% |
Tips for using it:
- Read, then practice. Read the section notes first, then answer practice questions on that section the same day.
- Track misses by section. That is how CSLB reports a failing result, so practice the same way.
- Do the math by hand once. A calculator is provided, but you still need to know which numbers to compare.
- Study without notes open. The exam is closed book.
Official resources CSLB recommends
The study guide lists these reference materials:
- California Contractors License Law & Reference Book (Matthew Bender). Get Licensed to Build says free access to the book is on CSLB's website, and suggests reviewing the current edition.
- California Employer's Guide (DE 44) from the Employment Development Department (DE 44).
- IRS Publication 15 (Circular E), Employer's Tax Guide (Publication 15).
- Public Works Manual from the Department of Industrial Relations (Public Works Manual).
- Cal/OSHA safety orders in Title 8 of the California Code of Regulations, including the Construction Safety Orders (Cal/OSHA Construction Guide).
- California Labor Code and California Financial Code (the latter for the PACE program).
- NASCLA Contractors Guide to Business, Law and Project Management, 14th Edition.
- CSLB's own Get Licensed to Build and Maintain and Change Your License publications.
You do not need to read all of these cover to cover. Use the section weights to decide where to go deep.