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Posted

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

  • 2 weeks later...
Posted

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.

Posted

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.

Posted

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!

Posted

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.

  • 4 months later...
Posted

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

Posted

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!!!

  • 3 years later...
Posted

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 .

Posted

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.

Posted

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?

         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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