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Nevada Law & Business - Compliance, Discipline and Complaints

Nevada Law & Business - Compliance, Discipline and Complaints

Nevada Business & Law — Section 10: Compliance, Discipline & Complaints

PSI loves: complaint flow (intake → investigation → hearing/settlement → order), grounds for discipline (unlicensed work, aiding/abetting, misrepresentation, monetary limit violations, abandonment, failure to pay, safety/permit violations), required notifications (address/ownership/QI changes), advertising rules (license number display), and penalties/remedies (fines, probation, suspension, revocation, corrective action, restitution). Tab every definition box and any tables that list who/what/when and deadlines.

1) Complaint & Investigation Process From intake to order

Typical Flow

  • Complaint intake → assignment to investigator → request for documents & site visit.
  • Closing options: resolve by corrective action/settlement or proceed to hearing.
  • Emergency actions possible in severe threat cases.

Contractor Response

  • Respond by the stated deadline; provide contracts, change orders, communications, payments.
  • Demonstrate good-faith repair or restitution if warranted.
2) Grounds for Discipline What gets you in trouble

License & Limits

  • Unlicensed contracting or working outside classification.
  • Exceeding monetary limit or violating bid/contract rules.

Conduct

  • Fraud/misrepresentation; diversion of funds; failure to pay for labor/materials.
  • Project abandonment or gross negligence.

Compliance

  • Advertising without license number; failure to maintain bond/insurance.
  • Ignoring safety/permit requirements or Board orders.
3) Qualifying Individual (QI) Duties & Notifications Supervision & control

QI Responsibilities

  • Provide supervision and control over construction operations.
  • Ensure compliance with classification and monetary limits; oversee employees/subs.

Notify the Board

  • Report address, business name, ownership, and QI changes within required time frames.
  • Failure to notify can be an independent ground for discipline.
4) Advertising & Contracting Rules What must be shown
  • Include the contractor’s license number in ads, proposals, websites, and cards as required.
  • Use the licensed name and classification correctly; avoid implying unheld classifications.
  • Written contracts should include required disclosures; change orders in writing.
5) Hearings, Orders & Penalties Outcomes

Possible Orders

  • Administrative fines; investigative costs.
  • Corrective actions: repair/replace, refund, documentation.

License Status

  • Probation with conditions; suspension; revocation.
  • Cease-and-desist for unlicensed activity.

After the Order

  • Comply with deadlines; submit proof of compliance.
  • Appeal options exist—note filing timelines.
6) Bond, Insurance & Restitution Links Making owners whole
  • Maintain surety bond and required insurance; Board may increase bond based on risk.
  • Orders can require restitution or completion of corrective work.
  • Failure to maintain insurance/bond can trigger immediate discipline.
7) Ethics & Professional Conduct Do the right thing
  • Bid honestly; no misrepresentation of qualifications or experience.
  • Pay subs/suppliers timely; resolve disputes in writing.
  • Avoid conflicts of interest and kickbacks; document change conditions promptly.
8) Records that Win Cases Evidence beats memory
  • Keep contracts, change orders, daily reports, photos, emails, pay apps, waivers.
  • Maintain customer communications logs and correction attempts.
  • Clean records often prevent discipline or reduce penalties.
9) Compliance Calendar Never miss a deadline
  • License renewal, bond/insurance renewals, address/QI change filings.
  • Respond to Board notices by the stated date.
  • Use a tickler system with backups and assigned responsibility.
10) Unlicensed Activity & Aiding/Abetting High-risk area
  • Contracting or bidding without a license is prohibited; so is letting others use your license.
  • Working outside your classification or exceeding your monetary limit can be disciplined.
  • Advertising for work you are not licensed to perform is a separate offense.

Practice Exam — 60 Questions Answers & brief explanations under each

1. A typical complaint sequence is:

  1. Hearing → Complaint → Investigation
  2. Complaint → Investigation → Settlement/Hearing → Order
  3. Order → Appeal → Complaint
  4. Bid → Lien → Complaint
Answer

B — Intake to resolution to order.

2. A licensee must report changes to QI/ownership/address:

  1. Never
  2. Within required time frames listed in the book
  3. Only at renewal
  4. Only if asked
Answer

B — Tab the notification deadlines.

3. Advertising without your license number can result in:

  1. Awards
  2. Discipline
  3. Tax refund
  4. Bond reduction
Answer

B — Display the number as required.

4. Bidding a project over your monetary limit is:

  1. Allowed
  2. A ground for discipline
  3. Encouraged
  4. Insurance issue only
Answer

B — Stay within limit/classification.

5. Aiding/abetting unlicensed activity includes:

  1. Verifying subs’ licenses
  2. Letting another business use your license
  3. Posting safety signs
  4. Paying taxes
Answer

B — Prohibited.

6. Failure to pay for labor or materials may lead to:

  1. No issue
  2. Discipline and possible restitution orders
  3. Bonus
  4. Higher monetary limit
Answer

B — Financial responsibility is key.

7. Project abandonment is generally defined as:

  1. Finishing early
  2. Ceasing work without cause and without notice
  3. Taking a lunch break
  4. Submitting a change order
Answer

B — A common discipline ground.

8. Using a business name different from the licensed name can be:

  1. Fine
  2. Misleading and subject to discipline
  3. Preferred
  4. Required
Answer

B — Use the licensed name and number.

9. During an investigation, the contractor should:

  1. Ignore requests
  2. Respond timely with documents and propose corrective action if appropriate
  3. Delete emails
  4. Threaten the owner
Answer

B — Cooperation matters.

10. A cease-and-desist order is typically used for:

  1. Safety trainings
  2. Unlicensed contracting
  3. Design approvals
  4. Sales tax
Answer

B — Stops activity immediately.

11. Probation often means:

  1. No conditions
  2. License remains active but with conditions and monitoring
  3. Automatic revocation
  4. Advertising only
Answer

B — Comply or face stiffer action.

12. If insurance lapses, the Board may:

  1. Send flowers
  2. Discipline and/or suspend until proof is restored
  3. Upgrade license
  4. Increase retainage
Answer

B — Maintain continuous coverage.

13. Misrepresentation in a bid or application can lead to:

  1. Award
  2. Discipline or denial
  3. Bonus
  4. Tax credit
Answer

B — Honesty required.

14. Failure to comply with a Board order by the deadline may result in:

  1. Nothing
  2. Escalated penalties or suspension
  3. Award of fees
  4. Contract addendum
Answer

B — Meet all compliance dates.

15. Unlicensed advertising typically includes:

  1. Listing the license number
  2. Omitting the license number when required
  3. Project photos
  4. Safety awards
Answer

B — Display the number.

16. A contractor can reduce discipline risk by:

  1. No contracts
  2. Using written contracts and written change orders
  3. Cash only
  4. Verbal promises
Answer

B — Paper trail wins.

17. If a QI leaves the company:

  1. Do nothing
  2. Notify the Board and replace per rules
  3. Reuse their stamp
  4. Bid larger jobs
Answer

B — QI continuity is required.

18. Working outside your classification can result in:

  1. Commendation
  2. Discipline
  3. Bonus
  4. Tax break
Answer

B — Stay in your scope.

19. Paying subs/suppliers late can escalate to:

  1. No issue
  2. Complaints, bond claims, and discipline
  3. Extra credit
  4. Insurance discount
Answer

B — Financial responsibility.

20. At hearing, persuasive evidence includes:

  1. Memory
  2. Contracts, change orders, emails, payment records, photos
  3. Rumors
  4. Texts without context
Answer

B — Keep complete files.

21. License name must match:

  1. Any DBA used
  2. The name advertised and on contracts
  3. Only payroll
  4. Only tax return
Answer

B — Consistency prevents confusion.

22. A Board may increase a bond amount when:

  1. It snows
  2. Risk factors or history warrant it
  3. Owner asks
  4. Any time randomly
Answer

B — Bond level can be adjusted.

23. “Cease work and correct deficiencies” is an example of:

  1. RFI
  2. Corrective action order
  3. Pay app
  4. Lien release
Answer

B — Compliance remedy.

24. A license revocation generally means:

  1. More bids
  2. Loss of the privilege to contract until reinstated per rules
  3. Bigger limits
  4. Fewer records
Answer

B — Severe discipline.

25. A contractor avoiding complaints should:

  1. Ignore customers
  2. Communicate in writing and resolve punch promptly
  3. Work without permits
  4. Skip schedules
Answer

B — Communication prevents disputes.

26. Using someone else’s license is:

  1. Allowed with permission
  2. Prohibited aiding/abetting
  3. Insurance only
  4. Bonding tip
Answer

B — Don’t lend or borrow licenses.

27. If a contractor exceeds the contract price without approved change orders, risk includes:

  1. No risk
  2. Non-payment and discipline exposure
  3. Tax credit
  4. Faster closeout
Answer

B — Get COs signed.

28. Failure to maintain workers’ compensation can lead to:

  1. Bonus
  2. Stop-work orders and discipline
  3. Warranty extension
  4. Bid credits
Answer

B — Insurance compliance is mandatory.

29. If you disagree with a disciplinary order, you should:

  1. Ignore it
  2. File an appeal/contest within the deadline
  3. Tell a friend
  4. Post on social
Answer

B — Track appeal timelines.

30. A contractor’s best defense to “failure to pay” claims is:

  1. No records
  2. Proof of payment or valid dispute with notices
  3. Rumors
  4. Promises
Answer

B — Keep waivers and proof of payment.

31. Posting ads implying you hold a specialty classification you don’t have is:

  1. Creative
  2. Misrepresentation and subject to discipline
  3. Required
  4. Fine if small font
Answer

B — Advertise only what you’re licensed to do.

32. During probation, failure to file required reports may cause:

  1. Automatic promotion
  2. Revocation or suspension
  3. Prize
  4. Bond refund
Answer

B — Follow conditions exactly.

33. If a customer refuses access to correct work, the contractor should:

  1. Abandon the job
  2. Document offers to correct and keep evidence
  3. Pay cash
  4. Ignore
Answer

B — Shows good-faith compliance.

34. Performing work without required permits is:

  1. Efficient
  2. Ground for discipline
  3. Preferred
  4. Owner’s issue only
Answer

B — Pull permits as required.

35. “Restitution” in a discipline order means:

  1. Tax refund
  2. Paying the complainant amounts ordered
  3. Bond increase
  4. New permit
Answer

B — Money or corrective work.

36. A license may be suspended when:

  1. Owner smiles
  2. Non-compliance presents risk or orders are ignored
  3. Project finishes
  4. It rains
Answer

B — Suspension protects the public.

37. A contractor can demonstrate “supervision and control” by:

  1. No meetings
  2. Documented policies, site visits, qualified supervisors, and oversight of subs
  3. Cash pay
  4. Oral direction only
Answer

B — QI oversight.

38. If a Board sets a compliance deadline, you should:

  1. Wait
  2. Calendar it and submit proof before/at deadline
  3. Contest silently
  4. Forget
Answer

B — Proof of compliance is required.

39. Which best prevents “abandonment” allegations?

  1. No schedule
  2. Maintain communication, change orders, and document access issues
  3. Stop work quietly
  4. Remove sign
Answer

B — Paper trail and progress.

40. A settlement agreement may include:

  1. Nothing
  2. Corrective work, refunds, and stipulated penalties if not completed
  3. Vacation plans
  4. Tax forms
Answer

B — Binding commitments.

41. Working while the license is suspended is:

  1. Fine
  2. Additional violation
  3. Upgrade path
  4. Bond practice
Answer

B — Don’t contract during suspension.

42. “Diversion of funds” generally refers to:

  1. Using progress payments for unrelated purposes contrary to contract
  2. Filing a lien
  3. Buying PPE
  4. Submitting an RFI
Answer

A — Financial misconduct.

43. The fastest way to answer discipline questions on the exam is to:

  1. Guess
  2. Go to your “Compliance/Discipline” tab and scan the grounds/penalties tables you highlighted
  3. Check liens
  4. Check OSHA
Answer

B — Keywords will jump out.

44. “Unlicensed practice” includes:

  1. Renewed license
  2. Contracting or advertising without an active license
  3. Using PPE
  4. Posting waivers
Answer

B — Don’t bid/contract unlicensed.

45. If a licensee changes business entity type:

  1. No notice
  2. Notify the Board and update records
  3. Use old name
  4. Skip advertising rules
Answer

B — Keep records current.

46. “Good-faith repair” efforts help because they:

  1. Prove intent to comply and may reduce penalties
  2. Are secret
  3. Replace permits
  4. Increase limits
Answer

A — Document everything.

47. If a sub is unlicensed for its trade:

  1. No issue
  2. Prime may face discipline for hiring/allowing unlicensed work
  3. Faster schedule
  4. Lower audit risk
Answer

B — Verify licenses before award.

48. “Corrective action” may include:

  1. Publicity
  2. Repair, replace, refund, or obtain missing permits
  3. Vacation
  4. Logo change
Answer

B — Fix what’s wrong.

49. If you miss an appeal deadline, the order usually becomes:

  1. Optional
  2. Final
  3. Void
  4. Automatic refund
Answer

B — Calendar deadlines.

50. The best single habit to avoid complaints is:

  1. Silence
  2. Clear written scope, schedule, and change documentation
  3. Cash jobs
  4. No photos
Answer

B — Manage expectations.

51. License classification matters because it:

  1. Decorates certificates
  2. Defines the scope you can legally contract for
  3. Sets payroll tax
  4. Sets lien rights
Answer

B — Don’t exceed your scope.

52. A monetary limit is typically based on:

  1. Logo size
  2. Financial statements and Board criteria
  3. Permit number
  4. Number of trucks
Answer

B — Financial capacity.

53. If a homeowner complains about workmanship, first step is:

  1. Ghost them
  2. Acknowledge in writing and schedule inspection
  3. Send a gift card
  4. File a lien
Answer

B — Professional response.

54. Orders may require proof such as:

  1. Selfie
  2. Receipts, permits, photos, signed releases
  3. New logo
  4. Yard sign
Answer

B — Abatement verification.

55. “Working under someone else’s classification” to perform restricted work is:

  1. Normal
  2. Prohibited unless properly subcontracted to a duly licensed specialty
  3. Required
  4. Optional
Answer

B — Use appropriately licensed subs.

56. If you change your business address, you should:

  1. Wait until renewal
  2. Notify the Board within the required period
  3. Only update bank
  4. Do nothing
Answer

B — Keep records current.

57. A contractor that refuses to correct defective work risks:

  1. No risk
  2. Order to repair or refund plus penalties
  3. Faster closeout
  4. Insurance discount
Answer

B — Corrective action is common.

58. A “final order” is:

  1. Informal letter
  2. Binding decision unless timely appealed
  3. Draft
  4. Permit
Answer

B — Know the dates.

59. If a sub files a bond claim for non-payment, the Board may view this as:

  1. Praise
  2. Evidence of failure to pay
  3. Tax issue
  4. Permit problem
Answer

B — Pay downstream parties timely.

60. On the exam, if a question mentions unlicensed activity, monetary limit, advertising, orders, or QI notifications, your quickest move is:

  1. Safety tab
  2. Liens tab
  3. Compliance/Discipline tab
  4. Estimating tab
Answer

C — You pre-highlighted this section.

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