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CSLB Exam Rule Changes Since 2023: Numbers to Recheck in Older Notes

Updated

CSLB lists the topics the Law and Business exam covers (CSLB study guide). Several rules in those topics have a new version since 2023, and another change is set for 2028 (§7125, operative 2028). Older material, even an official guide, may not match the current law. CSLB's study guide lists Get Licensed to Build as a reference (CSLB study guide), and that guide prints at least two figures that do not match the current statutes.

Below are the main changes and the dates our sources give for them.

Checked against the sources listed at the end of this page on October 29, 2026.

The changes at a glance

Rule What it says Date Source
Use tax "qualified purchaser" More than $10,000 a year in purchases subject to use tax January 1, 2024, through December 31, 2028 CDTFA Pub. 9
Workers' comp codes at renewal Certify the 3 codes with the highest estimated payroll July 1, 2024 §7125.6
Workplace violence prevention plan Written plan, incident log, yearly training, records July 1, 2024 Lab. Code §6401.9
Form 1099-NEC Payments of $2,000 or more Payments made in 2026 IRS Pub. 15
Citation of an unlicensed person $1,500 to $15,000 July 1, 2026 §7028.7
Citation of a licensee $500 to $8,000; $1,500 to $30,000 for §7110, §7114 or §7118 July 1, 2026 §7099.2
Workers' comp for active licenses Now: a licensee with no employees may file an exemption unless it holds C-8, C-20, C-22, C-39 or D-49. From January 1, 2028: only a joint venture with no employees is exempt Not yet in force; operative January 1, 2028 §7125

Citation fines (July 1, 2026)

Both citation penalty ranges come from versions of the law that became operative on July 1, 2026:

  • Unlicensed person. A citation for acting as a contractor or salesperson without a license or registration in good standing carries a civil penalty of $1,500 to $15,000 (§7028.7(c), (g)).
  • Licensee. The usual range is $500 to $8,000. It is $1,500 to $30,000 for a violation of §7110, §7114 or §7118, such as contracting with an unlicensed contractor (§7099.2(b)–(c); §7118).

Get Licensed to Build still describes administrative fines of $200 to $15,000 for unlicensed contractors (Get Licensed to Build). That minimum does not match the current §7028.7. Both sections also let the board adjust the minimum penalties for inflation every five years (§7028.7(f); §7099.2(b)(2)).

Workers' compensation: the rule now and the rule from 2028

Until January 1, 2028

An active license needs a current Certificate of Workers' Compensation Insurance or Certification of Self-Insurance on file (§7125(a)). A licensee with no employees may file an exemption statement instead, unless it holds a C-8 (Concrete), C-20 (Warm-Air Heating, Ventilating and Air-Conditioning), C-22 (Asbestos Abatement), C-39 (Roofing) or D-49 (Tree Service) classification (§7125(b); Get Licensed to Build). A joint venture with no employees may also file the statement. An inactive license needs neither (§7125(c)–(d)).

If a license active after July 1, 2023 holds C-8, C-20, C-22 or D-49 plus another classification and no certificate is received, the registrar removes that classification instead of suspending the whole license (§7125(g)).

This version of §7125 will be repealed on January 1, 2028, unless a law enacted before then deletes or extends that date (§7125(i)).

At renewal (since July 1, 2024)

Since July 1, 2024, every active licensee that has a workers' compensation certificate on file, or is required to have one, must certify on the renewal form the three workers' compensation classification codes with the highest estimated payroll reported on the policy, or every code if there are fewer than three (§7125.6(a), (d)).

From January 1, 2028

A new version of §7125 will become operative on January 1, 2028 (§7125(f), operative 2028). Under it, every applicant or licensee, except as noted below, must have a Certificate of Workers' Compensation Insurance or Certification of Self-Insurance on file at all times. The only no-employee exemption left is for a joint venture with no employees, and an inactive license still needs no certificate (§7125(a)–(c), operative 2028). Unless the law changes again before then, any other licensee that uses the no-employee exemption today, such as a sole owner, partnership, corporation or LLC, will need one of those documents on file from that date to keep its license active.

Workplace violence prevention plans (July 1, 2024)

Labor Code §6401.9 applies to all employers except those it lists, such as a workplace with fewer than 10 employees at any time that is not open to the public and follows the injury and illness prevention program rule (Title 8, §3203). Covered employers must set up and keep a written workplace violence prevention plan (Lab. Code §6401.9(b)–(c)). These duties became operative on July 1, 2024 (§6401.9(i)). The parts with numbers:

  • Train employees when the plan is set up and every year after that, plus extra training for a new hazard or a plan change (§6401.9(e)).
  • Keep the violent incident log and hazard records at least five years, and training records at least one year (§6401.9(f)).
  • Make those records available to employees within 15 calendar days of a request (§6401.9(f)(6)).

Tax thresholds that moved

Form 1099-NEC. For payments made in 2025, the threshold was $600. For payments made in 2026, a business files Form 1099-NEC for payments of $2,000 or more to people not treated as employees, such as independent contractors, for services performed for its trade or business. The IRS says this threshold will be adjusted for inflation for each year after 2026 (IRS Pub. 15 (2026)).

Use tax "qualified purchaser." A contractor that does not need a seller's permit may have to register with CDTFA as a qualified purchaser and report use tax every year. Before January 1, 2024, the test was at least $100,000 a year in gross receipts. From January 1, 2024 through December 31, 2028, it is more than $10,000 a year in purchases subject to use tax (not counting vehicles, vessels or aircraft) when the tax was not paid to a retailer. On January 1, 2029, the test will go back to at least $100,000 a year in gross receipts (CDTFA Publication 9).

Other sections with a newer version

Our sources show when the current wording of these sections took effect, but not what the earlier wording said. If your notes are older than the date, check them against the current text.

Rule What it says Current version since Source
Contractor's bond $25,000 (none while the license is inactive) January 1, 2023 §7071.6
Disciplinary bond $25,000 to 10 times the §7071.6 amount ($250,000), set by the registrar January 1, 2023 §7071.8
Small claims court limits $12,500 for a natural person; $6,250 for others, such as a corporation. Lower limits apply to claims against a surety or guarantor (for example, $8,125 when a natural person sues a surety that charges a fee) January 1, 2024 CCP §116.220, §116.221
Specialty contractor subcontracting No more than one subcontractor in your own classification on a single project, unless that subcontractor uses workers classified as employees for that work, or you are signatory to a collective bargaining agreement that covers the work and addresses subcontracting January 1, 2024 §7035

The bond sections

To get, reinstate, reactivate, renew or keep a license, the applicant or licensee must have a $25,000 contractor's bond on file (§7071.6(a)). No bond is required while a license is inactive (§7071.6(c)). This version of §7071.6 became operative on January 1, 2023 (§7071.6(e)). Our sources give the date of this version, not the amount before it.

The disciplinary bond section, for people and firms tied to a license suspended or revoked for discipline, also became operative on January 1, 2023. The registrar sets the amount by how serious the violation was, and the bond stays on file at least two years (§7071.8).

How to spot an outdated number

  • Check the statute, not a summary. Get Licensed to Build says work valued at $500 or more must be done by a licensed contractor (Get Licensed to Build). The current text of §7048 exempts work on one project costing less than $1,000 in total that does not need a building permit (§7048(a)). It does not cover anyone who advertises as a contractor or employs help, work that is part of a larger project, or a job split into contracts under $1,000 (§7048(b)–(c)).
  • Read the last lines of a statute. Many sections state their own operative or repeal dates (§7071.6(e); §7125(i)).
  • Use the right tax year. IRS Publication 15 is marked "For use in 2026" (IRS Pub. 15 (2026)). Use the figures for the year in the question.

Sources

We are not affiliated with CSLB.

Practice questions

Think of your answer first, then open the explanation.

  1. Insurance and Liens

    1. A contractor needs a disciplinary contractor's bond. The registrar sets the amount based on how serious the violation was. Under Business and Professions Code section 7071.8, what is the highest amount the registrar may set?

    • A. $50,000
    • B. $100,000
    • C. $250,000
    • D. $500,000
    Show answer

    Correct answer: C

    • A. $50,000

      $50,000 is only twice the regular $25,000 bond. The highest disciplinary bond is 10 times that amount, or $250,000.

    • B. $100,000

      $100,000 is only four times the regular $25,000 bond. The highest disciplinary bond is 10 times that amount, or $250,000.

    • C. $250,000

      Correct answer

      Correct. The disciplinary bond may not be more than 10 times the $25,000 bond required by section 7071.6, and 10 x $25,000 = $250,000.

    • D. $500,000

      $500,000 is 20 times the regular $25,000 bond. The cap is 10 times that amount, or $250,000.

    Explanation

    Section 7071.8(b) says the registrar fixes the disciplinary bond amount based on the seriousness of the violation. The amount may not be less than $25,000 nor more than 10 times the amount required by section 7071.6. Section 7071.6 requires a $25,000 contractor's bond, and 10 x $25,000 = $250,000. $50,000 is only twice the regular bond, and $500,000 is 20 times it.

    Sources

  2. Business Organization and Licensing

    2. The registrar has probable cause to believe that a person is contracting without a license. No exemption applies, so the registrar issues a citation. Under section 7028.7, what civil penalty (fine) range must the citation assess?

    • A. Not less than $500 nor more than $8,000
    • B. Not less than $1,000 nor more than $5,000
    • C. Not less than $1,500 nor more than $15,000
    • D. Not less than $1,500 nor more than $30,000
    Show answer

    Correct answer: C

    • A. Not less than $500 nor more than $8,000

      $500 to $8,000 is the usual range for citations of licensees under section 7099.2, not for unlicensed persons.

    • B. Not less than $1,000 nor more than $5,000

      The range of $1,000 to $5,000 does not appear in this rule; section 7028.7 sets $1,500 to $15,000.

    • C. Not less than $1,500 nor more than $15,000

      Correct answer

      Correct. Section 7028.7 says each citation of an unlicensed person must contain an order of abatement and a civil penalty of not less than $1,500 nor more than $15,000.

    • D. Not less than $1,500 nor more than $30,000

      $1,500 to $30,000 applies to licensees for a few special violations, not to citations of unlicensed persons, which top out at $15,000.

    Explanation

    Business and Professions Code section 7028.7 says each citation of an unlicensed person must contain an order of abatement (an order to stop the violation) and a civil penalty of not less than $1,500 nor more than $15,000. The range of $500 to $8,000 is the usual range for citations of licensees under section 7099.2, not for unlicensed persons. The range of $1,500 to $30,000 applies to licensees for a few special violations. The range of $1,000 to $5,000 does not appear in this rule.

    Source

  3. Insurance and Liens

    3. A contractor's active license has two classifications: B (General Building) and C-20 (heating and air-conditioning). The contractor has no employees. No workers' compensation certificate is on file. Under Business and Professions Code section 7125, what does the registrar do?

    • A. Removes the C-20 classification and keeps the B classification
    • B. Suspends the whole license until a certificate is filed
    • C. Takes no action, because the contractor has no employees
    • D. Removes the B classification and keeps the C-20 classification
    Show answer

    Correct answer: A

    • A. Removes the C-20 classification and keeps the B classification

      Correct answer

      Correct. Under section 7125, when an active license includes a C-20 plus another classification and no certificate is received, the registrar removes the C-20 instead of suspending the license, and the B stays.

    • B. Suspends the whole license until a certificate is filed

      Section 7125 says the registrar removes the C-20 classification in place of the automatic license suspension. The whole license would be suspended only if the contractor is later found to have employees without coverage.

    • C. Takes no action, because the contractor has no employees

      The no-employee exemption is not available to a contractor who holds a C-20 license. Without a certificate, the registrar removes the C-20 classification.

    • D. Removes the B classification and keeps the C-20 classification

      This removes the wrong classification. Section 7125 has the registrar remove the C-20 classification, while the B classification stays on the license.

    Explanation

    Business and Professions Code section 7125 says the no-employee exemption is not available to a contractor who holds a C-20 license, so a C-20 contractor must carry workers' compensation even with no employees. When an active license includes a C-20 in addition to another classification, the registrar removes the C-20 classification instead of suspending the license, unless a valid certificate is received. The B classification stays on the license. The whole license would be suspended only if the contractor is later found to have employees without coverage.

    Source

    • Bus. & Prof. Code §7125(g)(1)

      For any licensee whose license, after July 1, 2023, is active and includes a C-8, C-20, C-22, or D-49 classification, in addition to any other classification, the registrar shall, in lieu of the automatic license suspension otherwise required under this article, remove the C-8, C-20, C-22, or D-49 classification from the license unless a valid Certificate of Workers' Compensation Insurance or Certification of Self-Insurance is received by the registrar.

      View source: Bus. & Prof. Code §7125(g)(1)Official site for Bus. & Prof. Code §7125(g)(1) (opens in a new tab)

  4. Business Finances

    4. In 2026, a contractor pays an independent contractor (not an employee) for services in its business. According to IRS Publication 15, what is the smallest total payment for the year that requires the contractor to file Form 1099-NEC?

    • A. $600
    • B. $1,000
    • C. $2,000
    • D. $5,000
    Show answer

    Correct answer: C

    • A. $600

      $600 was the threshold for payments made in 2025. For payments made in 2026, the threshold is $2,000 or more.

    • B. $1,000

      $1,000 is not a threshold for Form 1099-NEC. For payments made in 2026, the threshold is $2,000 or more.

    • C. $2,000

      Correct answer

      Correct. Form 1099-NEC must be filed for payments of $2,000 or more made in 2026 to persons not treated as employees, such as independent contractors.

    • D. $5,000

      $5,000 is not a threshold for Form 1099-NEC. Payments of $2,000 or more made in 2026 must be reported.

    Explanation

    IRS Publication 15 says Form 1099-NEC reports payments to persons not treated as employees, such as independent contractors, for services in your trade or business. For payments made in 2025 the threshold was $600 or more, but for payments made in 2026 it is $2,000 or more. The $600 figure is the old rule for 2025 payments. $1,000 and $5,000 are not thresholds for this form.

    Source

  5. Business Finances

    5. In 2026, a contractor works only on lump sum jobs. It holds no seller's permit and no use tax account. It buys $15,000 of materials for its California jobs from out-of-state sellers that do not collect California tax. According to CDTFA Publication 9, what must it do?

    • A. Nothing, because out-of-state purchases are not taxed in California
    • B. Register as a qualified purchaser and report use tax yearly
    • C. Get a seller's permit and charge its customers sales tax
    • D. Pay nothing until its purchases go over $100,000 a year
    Show answer

    Correct answer: B

    • A. Nothing, because out-of-state purchases are not taxed in California

      Out-of-state purchases used in California are subject to use tax. With $15,000 in purchases on which no California tax was paid, the contractor is a qualified purchaser and must register.

    • B. Register as a qualified purchaser and report use tax yearly

      Correct answer

      Correct. From January 1, 2024 through December 31, 2028, a person with more than $10,000 a year in purchases subject to use tax, with the tax not paid to a retailer, is a qualified purchaser. It must register with the CDTFA and report and pay use tax every year.

    • C. Get a seller's permit and charge its customers sales tax

      A lump sum contractor is the consumer of materials, so it does not need a seller's permit to charge sales tax. Its duty is to register as a qualified purchaser and report use tax.

    • D. Pay nothing until its purchases go over $100,000 a year

      The $100,000 figure was the old gross receipts test, not a purchase limit. The current test is more than $10,000 a year in purchases subject to use tax, and $15,000 is over that.

    Explanation

    CDTFA Publication 9 says that, from January 1, 2024 through December 31, 2028, a qualified purchaser is a person who makes more than $10,000 a year in purchases subject to use tax when the tax was not paid to a retailer. A qualified purchaser must register with the CDTFA and report and pay use tax every year. This contractor bought $15,000 of materials without paying California tax, so it must register. Out-of-state purchases used in California are subject to use tax. A lump sum contractor is the consumer of materials, so it does not need a seller's permit to charge sales tax. The $100,000 figure was the old gross receipts test, not a purchase limit.

    Sources