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Are you paying your employees what they deserve?

Joe Marconi
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  • Joe Marconi changed the title to Are you paying your employees what they deserve?
bantar Community Regular

bantar

Posted
Posted

I just hired a new C tech at $15.   He finished tech school and is overall a good C Tech and limited tools.    My old B ($22) and C ($18) techs both left to take a job paying $1300/week with 50 hours required.  Given this, it would seem we have a local market range for C Techs of $15-$24/hr.  

bantar Community Regular

bantar

Posted
Posted

Now that we are doing my new C Tech's first payroll, my manager just reminded me that he is $15/hr + $5/flag hour.   This is better as we did want to maintain a competitive rate to reduce turnover.  My previous pay plan was Wall Time or Flag Time whichever is higher.   My new pay plan is now Hourly + a Flag kicker.

dfrisby Collaborator

dfrisby

Posted
Posted
21 minutes ago, bantar said:

Now that we are doing my new C Tech's first payroll, my manager just reminded me that he is $15/hr + $5/flag hour.   This is better as we did want to maintain a competitive rate to reduce turnover.  My previous pay plan was Wall Time or Flag Time whichever is higher.   My new pay plan is now Hourly + a Flag kicker.

I pay similar. My new tech is at $12.50 for time he is here and $12.50 for billed hours.  My tech that's been here almost 4 years is at $15 and $15, and has had 2 raises already this year.  Last week it had my new tech at just over $20/hr combined and my more experienced tech was just over $30 an hour.

Andre R Enthusiast

Andre R

Posted
Posted

We have 3 techs all on hourly. One  at $22.00 one  at $28.00 and one at $35.00. The performance 

bonus starts at 35 flagged hours $2.00 at 35 thru 39 hours bumps to $4.00 at 40 hours $6.00 at 45 hours and $8 at 50 hours.

 

 

 

  • Like 1
  • 2 weeks later...
CTC Rookie

CTC

Posted
Posted

Be careful with bonuses….had my hand slapped by federal labor board! She said we should never have a bonus plan that says if you do this you get this. Only applies to bonus, not flat rate, they consider that piece meal pay, which is entirely different. Take or leave the advice, will just tell you that it cost me a lot of money!  My suggestion is to ask your local labor board, if you have questions prior to them checking in on you.

  • Like 1
bantar Community Regular

bantar

Posted
Posted
5 hours ago, CTC said:

Be careful with bonuses….had my hand slapped by federal labor board! She said we should never have a bonus plan that says if you do this you get this. Only applies to bonus, not flat rate, they consider that piece meal pay, which is entirely different. Take or leave the advice, will just tell you that it cost me a lot of money!  My suggestion is to ask your local labor board, if you have questions prior to them checking in on you.

I'm interested in understanding this more.  There must be some mitigating factors that make this stand out and it may very well impact us directly, but as written, I don't understand it.   There's a real caution in your note.  Can you elaborate more on the specifics of the law or rule being violated?  It'll be easier to probe our local labor boards with a known concern.

I've been on many bonus plans that were based on numerous "if you do this, you get this" criteria and some "if WE do this, you get this" too.  Examples: 

  1. No Individual Contribution:  If business exceeds $X revenue or $Y in GP, then you will get a bonus. 
  2. Individual Contribution:  If business exceeds $X revenue or $Y in GP, then you will get a bonus, but it will be factored by your Review Rating (Bonus * Ind Factor)  It can be greater than or less than the full amount.   5 = 125%, 4 = 100%, 3 = 75%, 2 = 50%, 1 = 0%.  
  3. If you complete Project X in 6 months, you get 2 times $Y, in 8 months, you get $Y and if >8 months, you get $0.   This bonus only applies to Project X.  If you are working on Project Y or Z, there is no bonus plan.
  4. If you complete Project X with < 50 mistakes, you get $Y, < 25 mistakes, $Z, and <10 mistakes, 2 times $Z.
  5. Multifactor Bonuses:   On Time > 95% of the time = 25% of your bonus, Have a good attitude 25%, Team completes Project G in 3Q 25%, You also complete Project X by Jan 3, 25%, with a chance to earn 2x 25% if completed by Nov 30.
  6. All Bonuses are Cancelled (except) Plan:   Director level and above will get paid 50% of your normal bonus, but all lower levels are being paid at $0 because we missed our revenue targets.   Yep, I was on this plan too.

Bonuses are often designed to encourage a desired behavior or outcome.  Often the right behaviors lead to the best outcomes, so they are related. 

In this business, we are saying that we will pay you a percentage of sales for every hour of sales that you personally work on.   Frankly, the criteria is only that you performed the work.  Our desired behavior is to encourage productivity and also to reward you for your contribution to the business.    If you are a 2x producer, you get 2x the reward.

  • Like 1
  • 3 weeks later...
Hands On Community Regular

Hands On

Posted
Posted

In my area Mc Donalds and Walmart pay $15/ hour. We start at $900 a week base for entry level, and go up from there. Bonus kicks in after 30 hours produced each week for a month straight. We bill $132/hr. I think this thread needs all of us to include our labor rate also, pay is different depending on your market area.

  • Like 1
derektinder Rookie

derektinder

Posted
Posted

In high cost SF Bay Area I am now $180/hour labor rate from $155 for a few years and the dealers are all at least $200/hour. My senior tech makes $40 an hour flat rate and he is worth it. My B tech is $30 and my two C techs are $24 and $22. I also keep my reputation high so people are choosing to come to my shop. 

  • Like 1
Grace Automotive Rookie

Grace Automotive

Posted
Posted

We pay flat rate, and hourly rate for time not spent on an actual job.

So, on a busy day where a tech spends his entire 8 hours working on billable jobs, he doesn't get any hourly pay, he gets his flat rate.

However, on a slow day where he may only spend 4 hours on billable jobs, he gets his flat rate for those 4 hours, and his hourly pay for the remaining 4 hours. 

An example is a tech that gets $25/Hour Flat rate + $13/Hour hourly.

During an 8 hour day, if he works 5 hours on billable stuff, but the actually hours billed to the customer were 8 hours, he gets paid 8 hours @ $25/hour and the remaining 3 hours of the day where he wasn't working on a billable job he gets paid 3 hours @ $13/Hour. 

This accomplishes several things:

1.) It gives him piece of mind that even if things get really slow, he's going to get paid for the time he's at the shop. 

2.) It takes away the temptation to say: "I don't get paid for that" when asked to do a menial job like cleaning up or helping another less experienced tech with a diagnosis. (I've seen a lot of this at some shops. Where flat rate techs don't want to do an oil change or check tire pressures because it doesn't pay)

3.) It still incentivizes him to be more efficient when he is working a billable job. 

Of course our Shop Management system can track when a tech is working on a job and when he's just "on the clock". If your shop management system doesn't give you an easy way to track this stuff I can imagine it would be a nightmare.

CTC Rookie

CTC

Posted
Posted

I understand everyone has a different pay plan, I also understand bonuses, I am saying that federal labor laws are easily violated by pay plans. Flat rate is cut & dry & shouldn’t be a problem, however I was specifically told that bonus plans are a problem & I paid heavily for having one. The easiest way to explain it is to say that if you are paying flat rate, don’t deviate without speaking with someone with the federal labor board. They will answer your questions if you ask.  If you pay hourly, or any thing close, you better make sure your people punch a clock & you better pay them for every hour they punch including time & a half over 40. Bonuses change the overtime rate you owe, that’s why if you have a specific plan, you have to account for it while factoring overtime.

  • Like 2
CTC Rookie

CTC

Posted
Posted

Paying flat rate & hourly you must punch clock & pay overtime, otherwise you are setting your self up for fines & backpay. Just a word to the wise, be careful!

CTC Rookie

CTC

Posted
Posted

On a side note….don’t trust the attorneys, just ask the labor board. Seems scary enough to call but they will steer you in the right direction whereas a labor attorney will offer advise, but will balk when fines are issued & leave you holding the bag!

  • Like 1
Hands On Community Regular

Hands On

Posted
Posted
10 hours ago, CTC said:

I understand everyone has a different pay plan, I also understand bonuses, I am saying that federal labor laws are easily violated by pay plans. Flat rate is cut & dry & shouldn’t be a problem, however I was specifically told that bonus plans are a problem & I paid heavily for having one. The easiest way to explain it is to say that if you are paying flat rate, don’t deviate without speaking with someone with the federal labor board. They will answer your questions if you ask.  If you pay hourly, or any thing close, you better make sure your people punch a clock & you better pay them for every hour they punch including time & a half over 40. Bonuses change the overtime rate you owe, that’s why if you have a specific plan, you have to account for it while factoring overtime.

I agree. My accounting system has a few options for how they are entered in the system, hourly, salary, or commission. All of my guys are entered in as commission, and their base pay is well above minimum wage to ensure I never come close to violating minimum wage laws even if they drag feet all month and take base.

  • Like 1
bantar Community Regular

bantar

Posted
Posted
15 hours ago, CTC said:

I understand everyone has a different pay plan, I also understand bonuses, I am saying that federal labor laws are easily violated by pay plans. Flat rate is cut & dry & shouldn’t be a problem, however I was specifically told that bonus plans are a problem & I paid heavily for having one. The easiest way to explain it is to say that if you are paying flat rate, don’t deviate without speaking with someone with the federal labor board. They will answer your questions if you ask.  If you pay hourly, or any thing close, you better make sure your people punch a clock & you better pay them for every hour they punch including time & a half over 40. Bonuses change the overtime rate you owe, that’s why if you have a specific plan, you have to account for it while factoring overtime.

Great feedback.  Thank you!!!     I called the Dallas Office of the Dept of Labor Wage and Hour Division to check on my compliance.   Very friendly and knowledgeable.  Didn't even ask who I was.  I encourage you to call.  However, what she said was super-complicated if it's the first time that you've heard it.  It still hurt my head on today's call.   I think I can explain it, but it belongs in a separate thread.  I will post that shortly.

Grace Automotive Rookie

Grace Automotive

Posted
Posted
18 hours ago, CTC said:

Paying flat rate & hourly you must punch clock & pay overtime, otherwise you are setting your self up for fines & backpay. Just a word to the wise, be careful!

Agreed.

We do have punch clock for in and out for the day and for lunch, as well as job clock to track how long working on actual flat rate job.

Our system pays a tech more than if they were simply getting hourly plus overtime. 

For example if a tech only works on one job a particular day. He's on the time clock for 8 hours. 

If he is on the job clock for that one job for 5 hours, then he only gets paid for 3 hours at his regular hourly pay.

However, the incentive is if that job calls for 7 hours, he gets 7 hours at his flat rate pay in addition to his 3 hours of hourly pay....and the flat rate pay is always higher than the hourly pay.

On the flip side of that, if that job only pays 2 hours, and he still spent 5 hours on the job clock then he only gets 2 hours at flat rate and 3 hours at regular hourly pay. 

That's an extreme example though. I don't have any techs that take 5 hours to do a job that calls for 2 hours (unless the labor manual is wrong, in which case I make adjustments...never want to rip of my techs or my customers)

With that said...

We are only open 8-5 Monday-Friday and everyone must take a 1 hour lunch break. So, there is no possibility of anyone running into an over-time situation at our shop whether we paid flat rate or not. 
 

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  • Have you checked out Joe's Latest Blog?

    • Joe Marconi
      The Technician Shortage Is Our Fault, And It's Time We Own It
      By Joe Marconi in Joe's Blog
         0 comments
      The Technician Shortage Is Our Fault, And It's Time We Own It
      Nearly every day, I hear shop owners complain: "There's a technician shortage. We can't find qualified people. There's no one out there." If that's true, then who's to blame?
      The industry? The schools? The government? I don't know how you feel, but who promised us an endless supply of qualified technicians?
      Another common complaint is that young people do not want to work in the trades. Well, if that were true, then why are other trades such as HVAC, electrical, and plumbing growing? What are they doing that the automotive industry is not? 
      Here's the reality we need to face: We do have a problem, but we shouldn't look for someone or any entity to rescue us. Not the government. Not the trade schools. Not the recruiting companies. No one owes us a workforce. If we want great people in our industry, it's up to us. At some point, we need to own up to the truth: Building a pipeline of qualified technicians is our responsibility.
      In this blog article, I will break down the key reasons we are in this situation today and what we, as an industry, can do to solve the technician shortage. Are you ready to look in the mirror?
      Have We Pushed Technicians Away?
      Let's take a look at flat-rate pay. True flat rate, which pays a technician only for the hours they produce, is a controversial pay plan that emphasizes high production levels and creates a competitive work environment that, if not properly controlled, can lead to increased mistakes and a decline in morale and team spirit. Additionally, the stress and physical demands placed on technicians as they age are not favorable to long-term employee retention. What do we do with technicians as they grow older into their fifties and begin to slow down? 
      I have heard all the arguments and pros and cons of flat-rate pay, and I am not going to judge any pay plan. Let the facts speak for themselves. True flat rate has changed in most areas around the country and has evolved into a pay plan that gives technicians some pay guarantee.
      Many shop owners have learned that team morale, along with the opportunity to earn income, is important to technicians and to the company's long-term success. But let me ask you: how many technicians have left or been pushed out over the years because of the old flat-rate pay system?
      Another issue is the workplace environment. I remember being grateful to be hired as a young technician at a local repair shop. While very thankful, the work environment was not ideal. The shop owner kept the bay doors open year-round (I am from New York) unless it rained or snowed. He felt that if the bay doors were closed, customers might think we were closed for business. We had no heat and no hot water. Many of the jobs were done outside, year-round,  in all types of weather. The starting pay was minimum wage, with no benefits, sick days, or vacation pay. 
      Now, again, I need to point out that I was truly grateful for the opportunity this shop owner gave me. I learned a lot working there, and the experience was pivotal in my career. But looking back, I wonder how many people were discouraged by these working conditions?
      While the physical demands of the repair workplace are daunting, perhaps even more critical is the culture. Too many of my generation shop owners preached the mindset of "my way or the highway." We were the business owners, after all. We started our companies, took all the risks, and provided jobs. Why shouldn't we be the ones to set the ground rules our way?   
      Many of us found over the years that the "my way or the highway" mentality was a sure way to isolate employees and make them more likely to look over the fence for greener grass. In other words, it led many technicians to seek employment elsewhere, where they felt they could be appreciated and recognized for their hard work. The issue, however, was that there wasn't much green grass around. Disappointment after disappointment, bouncing from repair to repair shop, eventually led to despair. So, I ask you: were workplace conditions a contributing factor in today's technician shortage?
      Another factor that we are all well aware of is the complexity of the modern automobile. When I started, the work was mostly physical, and you were required to master essentially three vehicle models: General Motors, Ford, and Chrysler. Let's fast-forward to today. The evolution of automotive technology, along with the extensive training and tools required, has outpaced the typical technician's pay compensation, with no clear career path. Again, leading to frustration and insecurity about the future.
      Here is the bottom line: people don't leave their job; they leave their experience. We must do a better job. 
      The News Isn't all Bad; Your Next Steps to Fix the Technician Shortage
      To fix the technician shortage, it will take a combined effort from everyone in the automotive industry, particularly automotive shop owners. Shop owners are in the perfect position to make the greatest impact, not only on their businesses but also on the future automotive workforce.
      First, shop owners must become better leaders and understand that their ultimate success is directly dependent on the people they assemble around them. Any shop owner who mistakenly believes they can build an empire solely on their abilities is destined for serious disappointment. Business owners who think like this will eventually plateau. Without the collective contributions from a team of qualified people, your business will stall; it will not continue to grow.
      Create a workplace that attracts top talent: a clean, professional, well-equipped facility designed to support productivity, teamwork, and a career, not just a job. Build a great reputation in your community by getting involved locally. Become the auto repair shop that people take notice of as "the" place to work.
      Next, shop owners must become more financially knowledgeable. Knowing your numbers and what you need to achieve for a strong bottom-line profit is essential to paying technicians the money they need and deserve. Profit will also allow you to compete with other trade industries by providing a benefits package that has real take-home value and security.
      When it comes to culture, this is where the rubber hits the road. People crave recognition, praise, and a sense of purpose. Despite what you hear, people are not just money-motivated. Once people feel secure in their financial situation, retaining and motivating technicians can only be achieved by connecting with them on an emotional level. You cannot show enough appreciation. Give out praise for a job well done as if your business depended on it, because it does.
      As technicians age, we need to have a place for them. Expecting a 58-year-old to perform like a 35-year-old is unrealistic. We need to be more focused on career pathing. Provide training, skill development, and coaching to develop leaders and mentors within our older workforce. While their bodies may have slowed, the knowledge they have gained is priceless. 
      Our future is dependent on young people entering our industry. We need to give more young people opportunities. Every shop owner across the country should consider hiring an apprentice, then build an apprentice training plan and career path for them. If every shop did this, we could solve the technician shortage within five years. Get involved with the trade schools and high schools in your area. Look into the NAPA Apprenticeship Program. Don't sit on your hands with this one. Do it today.
      Lastly, don't get left behind. Commit to ongoing training for all your employees. Keep up to date with tools and equipment tailored to your business model. Don't try to be all things to all people and all vehicles. Identify your core profile customer and the vehicles they drive, and become an expert on those vehicles and the services you offer.

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      Is Your Shop the Problem? Hard Truths from the Voice of the Technician Survey Results [RR 1084]
      By carmcapriotto
      Thanks to our Partners, NAPA Auto Care and NAPA TRACS Watch Full Video Episode Host Carm Capriotto speaks with Jay Goninen, co-founder and president of WrenchWay, about insights from the 2026 Voice of the Technician Survey and what it reveals about the state of the automotive workforce.
      Jay encourages shop owners to download the free report to uncover blind spots and start meaningful conversations with their teams. The data show that technicians strongly prefer a four-day, 10-hour workweek with no weekends, along with proper equipment, paid vacation, retirement benefits, and paid training.
      While dealership technicians made up a larger share of respondents, independents stood out in workplace culture. 63% of independent technicians would recommend their shop to a friend, compared to 36% at dealerships, though dealerships scored higher in providing paid training. Across both groups, technicians favor an hourly wage plus bonus structure, which many feel better supports diagnosticians than traditional flat-rate systems.
      The discussion also highlights a troubling trend: the industry’s Net Promoter Score dropped to -60 in 2026, signaling that many technicians would not recommend the profession to others.
      To strengthen the talent pipeline, Jay discusses ASE Connects, a new initiative aimed at connecting shops with high school and technical school automotive programs to support them through mentorship, advisory roles, and community engagement.
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      https://wrenchway.com/resources/2026-voice-of-technician-survey-report/
      Jay Goninen, Co-Founder and President, WrenchWay
      Thanks to our Partners, NAPA Auto Care and NAPA TRACS Learn more about NAPA Auto Care and the benefits of being part of the NAPA family by visiting https://www.napaonline.com/en/auto-care NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at http://napatracs.com/ Connect with the Podcast: - Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ - Join Our Virtual Toastmasters Club: https://remarkableresults.biz/toastmasters - Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976 - Subscribe on YouTube: https://www.youtube.com/carmcapriotto - Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ - Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ - Visit the Website: https://remarkableresults.biz/ - Join our Insider List: https://remarkableresults.biz/insider - All books mentioned on our podcasts: https://remarkableresults.biz/books - Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom - Buy Me a Coffee: https://www.buymeacoffee.com/carm - Special episode collections: https://remarkableresults.biz/collections - The Automotive Repair Podcast Network: https://automotiverepairpodcastnetwork.com/ - Remarkable Results Radio Podcast with Carm Capriotto: Advancing the Aftermarket by Facilitating Wisdom Through Story Telling and Open Discussion. https://remarkableresults.biz/ - Diagnosing the Aftermarket A to Z with Matt Fanslow: From Diagnostics to Metallica and Mental Health, Matt Fanslow is Lifting the Hood on Life. https://mattfanslow.captivate.fm/ - Business by the Numbers with Hunt Demarest: Understand the Numbers of Your Business with CPA Hunt Demarest. https://huntdemarest.captivate.fm/ - The Auto Repair Marketing Podcast with Kim and Brian Walker: Marketing Experts Brian & Kim Walker Work with Shop Owners to Take it to the Next Level. https://autorepairmarketing.captivate.fm/ - The Weekly Blitz with Chris Cotton: Weekly Inspiration with Business Coach Chris Cotton from AutoFix - Auto Shop Coaching. https://chriscotton.captivate.fm/ - Speak Up! Effective Communication with Craig O'Neill: Develop Interpersonal and Professional Communication Skills when Speaking to Audiences of Any Size. https://craigoneill.captivate.fm                         Click to go to the Podcast on Remarkable Results Radio
    • Hands On
      "Service Up" Contacted me today saying one of their members wanted to use my shop
      By Hands On
      The emailed me a form to sign up to be a "service provider" The company Service Up will send me the client. They will bill the client and pay me after the repair. Look at some of the highlights from the terms:
       All transactions completed through the Platform are subject to a transaction fee ranging from 1.99% to 10% of the gross amount of each repair, with a baseline marketplace fee of 3.99% unless otherwise specified in a fleet-specific addendum.
      The marketplace fee applicable to a given repair is one of the following:
      • 3.99% (baseline) of the gross amount of all repairs completed through the Platform for all other customers, including customers to whom ServiceUp has referred you.
      • A rate specified in a fleet-specific addendum, which overrides the baseline, provided such rate falls within the 1.99%–10% range stated above.
      In addition to the marketplace fee, the following optional fee may apply:
      • QuickPay fee — an additional 3.50% of the gross amount of the repair if you elect to receive early payment (typically next business day). In the event a credit card is used by the customer for payment, the 3.50% QuickPay fee will be automatically applied.
      So, the fee they charge is any where from 1.99% to 17% if they pay credit card and you want funds next day
      Company reserves the right, in its sole discretion, to modify, increase, decrease, or otherwise change the transaction fees, early payment fees, or any other amounts payable under these Terms at any time. 
      But those fees could go up with no notice at all
      The Company shall remit payment to you net of any applicable transaction fees as promptly as practicable after, and contingent upon, Company’s receipt of payment from the applicable fleet customer for the services rendered by you. 
      They will pay you for the work you did, as long as they are able to get paid.
      You acknowledge and agree that the Company shall not be responsible for any delays or failure to pay that may be caused by a fleet customer.
      And if the customer fails to pay them, too bad.
      You further acknowledge and agree that (i) the Company may withhold funds in the event of any dispute between you and the Company pending the resolution of such dispute, (ii) you shall not collect any fees for services rendered hereunder directly from a fleet customer and shall receive payment for such services solely from the Company, (iii) in the event the Company determines that you have violated the foregoing subsection (ii), the Company shall have the right to charge a penalty of 10% of the gross value of the applicable services and may withhold that amount from future payments or debit your bank account to recover the penalty and any applicable fees for services.
      AND if they customer fails to pay them and you go directly after the customer yourself, tack on another 10%
      So basically, you fix our cars, and we maybe pay you after we take fees.
      Has anyone used this platform? What do you think?
    • Changing The Industry
      Episode 268 - Mastering Shop Management and Technician Relations in Today’s Auto Industry
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    • Changing The Industry
      Why Technician Pay Isn’t the Real Problem
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