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NY Need Worker's Comp Reform


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Joe,

I'm in the middle of this myself. My WC Insurance company has charged us a clerical rate in the past for my service writers. During the audit this April they decided to lump everyone together at the Tech rate, giving me a bill for about $7000. I'm trying to fight it with mixed results so far. I have an employee leasing firm that says they will classify Service Writers as clerical if I start using their service, but I'm not sure I want to go that way yet. We are sending a letter to the Insurance Commissioner to see if we can get anywhere there. Everyone I talk to says that NCCI a company out of Florida does the determination for the various classifications. I feel like I've been talking to the wall, trying to get the same point as you across; Ok maybe the Service Writers are not fully clerical, but they sure are not Techs and should not be classified at the Tech rate. I've gotten no good response to that statement except that NCCI classifies them that way. There has to be some other classification for our SW. I'll keep an eye on this forum and update as we go.

Russ

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  • 2 weeks later...

Joe,

Here's an update as to where I'm at on WC. I've joined the NHADA (NH Auto Dealers Association). They have an in house WC Trust. The rates I've been quoted are cheaper than I had previously and historically they've returned 30% to 40% of premiums back to the group based on loss history. They classify my service writers as clerical not technicians. I'm very frustrated by the run around I've gotten by the carrier I had. They were holding fast to their interpretation of Service Writers as NOT falling into a clerical class. Tried to LOGICALLY discuss the fact that they may not strictly be clerical, but that classification was much closer to their job responsibilities than a Tech class. They used the fact that there were only 2 classifications available; clerical and technician, therefore if they were not clerical they had to be techs. I maintain that there should possibly be a third classification between the two. I am trying to get someone in the Insurance Comisioners office to hear my out on this subject.

 

In the short term I've resolved it by moving the policy to the association, but I think the State Insurance Comisioner needs to address this issue.

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Been that way in California for a long time. We went through the ringer in California awhile back about this whole thing. It's a huge expense with very little control over it. It can kill a new business owner in no time. I went through a horrible issue with not paying enough premiums to Farmer's because of this. Service writers are in the office probably 70% of the day and only walking through the shop the other 30% but the insurance companies feel they should be written the same as a technician who is in the shop doing heavy work 100% of the time. Makes no sense.

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Iit's much the same way in New York. The classifications are regulated and set by the State Workers Comp Board. I switched carriers a few years back because they assurred me that they can classify my service advisors as sales people. Well, the State came in, did an audit and I had to pay back premiums.

 

The state has no service advisor class and lump them into the same class as techs. I am working the the local Serivce Station Dealers Association to set a meeting with the State Board. It may be futile, but I have to see it through.

 

That back premium thing can be horrible. I had it happen to me and Farmer's tried to say I owed $100,000 (which I didn't.) but after I went through everything I had it figured out at about $40,000 (although it was done slight of hand by the sales agent and should have been a lawsuit) but I got them to settle for $20,000. Hurt me bad. This was about three years after I took over ownership.

 

You name it and I've been through it. I got everything I asked for and more buying this place. But, I wouldn't change it for the world. What hasn't killed me has made me sharper, better, meaner, leaner, wiser, and a better business person!

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Wouldn't you think that the cost would still end up being the same? In the end? For example, Workman's Comp needs 500 million to operate, the new policy you are looking for, gets passed, and only gives them 375 million. Don't you think that they would average the comp premiums needed for ALL shops and then charge you accordingly to make up for the loss. Here in Wisconsin it has been a battle too. However by us not having accidents in the shop we are given a rebate. Maybe you need rebates or dividends for no accidents. Sorry if I may seem ignorant on this subject but, I plan on taking over ownership of this shop and I am just starting to learn more about this subject.

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  • 4 months later...

I know this will be a battle, but I cannot sit on my hands when I know that shops in New York and probably around the country are paying too much for workers compensation insurance, when it comes to their service staff.

 

I employ 7 mechanics, 3 service advisors and office personnel. My service advisors are true service advisors. They do not turn wrenches, they do not get their hands dirty and they are not subjected to any of the same hazards as the mechanics. They might get a paper cut once in a while, but that’s it. But, I pay workers comp insurance for my service advisors at the same rate as mechanics. And, I am sure there are a lot of other shop owners in the same boat.

 

New York state workers compensation board has no classification for service advisors and consequently the rate we pay for workers comp for them is the same as the mechanics. Which means each year thousands of dollars are wasted needlessly? I know that the State needs money, and going down this road may seem futile, but I am going down the road anyway. I am working with the local Trade Organization and trying to get a meeting set up with the compensation board.

 

I would like to hear from other shops in New York, send me your thoughts on this and opinions. The more information we have the better.

 

In addition, I would like to hear from shops around the country on their workers compensation laws with respect to mechanics and service advisors.

 

Any help would be appreciated on this matter.

 

Thanks in advance!

 

Joe Marconi

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We our in an audit today and my accountant is handling and they say the same thing rate as technicians.

Thier is a blog that says if we make a new class for service advisors , tech rates would go up so shut up and let be.

I would like to know what about the shops that pay thier employees under the TABLE , PARTS STORES THAT INSPECT CHECK ENGINE LIGHTS , INSTALL BATTERRYS , OIL , WIPER BLADES ETC. WHAT DO THIER COUNTER PEPOLE RATE IS.

WHEN THE GOVERNMENT CANNOT BALANCE THEY PREVAIL!!!

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  • 3 years later...

Hello Joe and all, Good points by all.

 

Several points...Cardinal Insurance did offer a Trust for CI in upstate NY. It did go bankrupt and members did have to pay for losses. It took 3 years to get them paid off. So listen to the sales pitch when they say you could be responsible for future losses.

 

Also, If every shop had to pay it would be competitive. We have many small shops that are "under the table" or Minimum wage with a portion under the table. It would be easy for our state to reconcile this.

I have an 8 bay shop with 2 to 3 SA at any time. Same problem. I just left the Service Station Association due to high cost. Erie was able to save $2000 per year. That is taking a rebate into account also. So, do shop around yearly for CI and all other business insurances. I think the strategy is to sell it at cost the first year and then increase it slowly .

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I think the reasoning is "service advisor" is in the same category as "service manager" meaning the job description entails working on/around/under vehicles. I would welcome a change!

 

I have a huge beef with parts store counter people installing batteries/code scanning without incurring the same costs as the rest of us. I feel NY should force these huge corporations to pay up in the way of facility licenses, WC, and insurance like any repair shop.

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Some points. We went thru an audit 5 years ago and managed to keep our service advisers as clerical. I reviewed my notes and here are the reasons I think it went our way.

 

Different uniforms. Our service advisers wear totally different uniforms than out techs. Don't discount this. You are trying to differentiate your advisers from your techs.

 

Separate work areas. It says right in Ohio's clerical description there must be separate and distinct work areas. That means a wall between where they work and the bays. We don't have a adviser work station in the bays. Additionally, behind the counter we have an office where both advisers have a dedicated desk.

 

All selling is done by the advisers. They specifically asked whether the techs sold any of the service. The answer was no, which is true. All the selling is done by the advisers.

 

Lastly they asked about wholesaling tires. We do a bit with other shops and car dealers. They asked whether the advisers did that selling which the do. I think it re-enforced their status as salespeople.

 

Again, these were from my notes. I don't know for sure why they ruled our way but these are my best guesses.

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  • Have you checked out Joe's Latest Blog?

         3 comments
      Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
      At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
      I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
      Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
      With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
      Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
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