Technician Pay Methods

TECHNICIAN PAY METHODS

STRAIGHT-TIME PAY METHODS When the particular service

or repair is not covered or mentioned in a flat-rate guide, it is
common practice for the technician to clock-in and use the actual
time spent on the repair as a basis for payment. The technician uses
a flat-rate time ticket and a time clock to record the actual time.
Being paid for the actual time spent is often called straight time or
clock time. Difficult engine performance repairs are often calculated
using the technician’s straight time.
FLAT-RATE PAY METHODS Beginning service technicians
are usually paid by the hour. The hourly rate can vary greatly
depending on the experience of the technician and type of work
being performed. Most experienced service technicians are paid
by a method called flat-rate. The flat-rate method of pay is also
called incentive or commission pay. “Flat-rate” means that the
technician is paid a set amount of time (flat-rate) for every service
operation. The amount of time allocated is published in a flat-rate
manual. For example, if a bumper requires replacement, the flat-rate
manual may call for 1.0 hour (time is always expressed in tenths of
an hour). Each hour has 60 minutes. Each tenth of an hour is 1/10
of 60 or 6 minutes.
0.1 hour _ 6 minutes
Many service operations are greater than 1 hour and are expressed
as such:
2.4 hours _ 2 hours and 24 minutes
3.6 hours _ 3 hours and 36 minutes
The service technician would therefore get paid the flat-rate
time regardless of how long it actually took to complete the job.
Often, the technician can “beat flat-rate” by performing the operation
in less time than the published time. It is therefore important
that the technician not waste time and work efficiently to get paid
the most for a day’s work. The technician also has to be careful to
perform the service procedure correctly because if the job needs to
be done again due to an error, the technician does the repair at no
pay. Therefore, the technician needs to be fast and careful at the
same time.
The vehicle manufacturer determines the flat-rate for each
labor operation by having a team of technicians perform the operation
several times. The average of all of these times is often
published as the allocated time. The flat-rate method was originally
developed to determine a fair and equitable way to pay dealerships
for covered warranty repairs. Because the labor rate differs
throughout the country, a fixed dollar amount would not be fair
compensation. However, if a time could be established for each
operation, then the vehicle manufacturer could reimburse the dealership
for the set number of hours multiplied by the labor rate approved
for that dealership. For example, if the approved labor rate
is $60.00 per hour and:
Technician A performed 6.2 hours _ $60.00 _ $372.00
Technician B performed 4.8 hours _ $60.00 _ $288.00
The total paid to the dealership by the _ $660.00
manufacturer
This does not mean that the service technician gets paid $60.00 per
hour. Sorry, no! This means that the dealership gets reimbursed for
labor at the $60.00 per hour rate. The service technician usually gets
paid a lot less than half of the total labor charge.
Depending on the part of the country and the size of the dealership
and community, the technician’s flat-rate per hour income can
vary from $7.00 to $20.00 or more per flat-rate hour. Remember, a
high pay rate ($20 for example) does not necessarily mean that the
service technician will be earning $800.00 per week (40 hours _
$20.00 per hour _ $800.00). If the dealership is not busy or it is a
slow time of year, maybe the technician will only have the opportunity
to “turn” 20 hours per week. So, it is not really the pay rate that
determines what a technician will earn but rather a combination of
all of the following:
_ Pay rate
_ Number of service repairs performed
_ Skill and speed of the service technician
_ Type of service work (a routine brake service may be completed
faster and easier than a difficult engine performance
problem)
A service technician earns more at a busy dealership with a lower
pay rate than at a smaller or less busy dealership with a higher pay
rate.

Technician Pay Methods

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TECHNICIAN PAY METHODS

STRAIGHT-TIME PAY METHODS When the particular service

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