Pay Systems from the Automotive Repair Shop Owners Perspective

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[@JimmyMakingitwork]

When I started as a mechanic in the early 80's the mechanics were complaining that they cut their pay from 60% of the labor rate, to only 50%. Today a good tech is lucky to make 30-35%. Yet at the same time when dining out, in my younger years, a tip used to be 10-12%, then later 15%, then 20% and now I'm seeing 22% suggested as a tip. Why is that?

[@B1G5L1M]

The last shop I worked at before hanging up the wrenches paid straight salary equivalent to flagging 46 hours a week at standard flat rate pay. Worked great for me because I was never one of those guys that would crank out 80 hours of flag time a week. I got to work at a leisurely pace and fix cars the right way without worrying about numbers.

[@sMFq11]

I switched to a flat rate shop finally with the help of all your advice I mentally was able to breakout of the miserable environment I was in… I’m new to flat rate I find myself worrying about my hours etc and my efficiency but if I just turn that mindset off and just focus on fixing cars and checking them over properly I find I’m well over my 100 % efficiency and my stress level is much lower! Thanks again man I love your stuff and have and will be watching for as long as you put stuff out.

[@JC_AUTO831]

Out here in California if u r required to bring your own tools you get paid hourly at double minimum wage right now that’s $31/hr. If u make more hours than your hourly pay then u get flat rate at a higher rate. It works out great and u r still motivated to produce as many hours as u can. I always enjoy your videos! Keep speaking the truth!!!!

[@foodskewed9197]

That won’t work in NC because minimum wage is $7.25 an hour. 😂😂😂

[@abochavez]

Last week i did an evaporator on a 2019 Impala. Well, I didn’t even get credit for it. The other master tech got credit for it. Should i be worried? I’m hourly pay.

[@emiliog.4432]

Flat rate pushes cars through and don’t always do a thorough job.

[@josiahr1375]

No different than hourly. It depends on the person. Flat rate places I've been tended to do a better job because it was well structured. People do shitty jobs everywhere, regardless of how they're paid. This applies to every industry. That's why bad apples need to be weeded out.

[@SS-U23]

@@josiahr1375 I agree!

[@qualityautorepairtireautosales]

My shop is in MO I have an older tech who is used to flat rate and wants to be on flat rate. I love writing those checks he’s gets 50 hours a week! My other tech is on a hybrid system.

[@niteninja0133]

I'm flat rate and the fastest one in our shop my average hrs for the week are 75 to 80. They can fire me before I ever do anything for free

[@chrisevenson9454]

I worked for a short time at a national chain store and it was flat rate. They didn't guarantee hours at all so if it was slow and I worked 50 hours flagging 35 was common.

[@Mallrunner]

Good job improving to your video editing. 👍

[@keithkapusinsky5476]

You got it again Mike! Hourly and commission in the 80s and 90s was the best! I lived in Nj for those times, and it could be 80 degrees and 90% humidity, and I would work my F***KN ass off. I loved it, but those days are gone forever, Sad!

[@TrackstarBR]

Lately I’ve seen flat rate cause a few shops end up working with only one or two techs because the manager/advisor can’t get enough jobs sold and everyone walks because there is not enough hours to flag. Then those techs that stayed get burnt out and move on to a new shop. Just watched it happen to the shop next to mine. They could only be open 4 days a week because they only had one tech for a month. Now they are open 6 days a week but on two of the days they only do basic maintenance stuff because they hired a lube tech. My personal opinion hourly pay is the best option for both parties because everyone knows the expectations. If the tech doesn’t perform cut them like any other industry. If the tech thinks they are worth more an hour look at other shops. It works for every other industry so why does a tech have to hope that they can get enough work on a weekly basis to make the money for the time they actually spend at the shop. How many techs sit around at the shop on a slow week hoping to get one more ticket to hopefully get a decent paycheck for the week.

[@biastv1234]

In Australia there is labour laws . Every hour must be paid, you just get paid to your skill level , which you negotiate with your boss.

[@ben10mama]

The shop I work at is hourly and I'll say I think an advantage you left out was there's more incentive to work together and help with training green techs. Where flat rate if you have to drop 10 minutes to help the new guy you're losing money or if somebody needs help diagnosing or maybe just getting something off that's stuck with flat rate you lose money so why would you do that? It's a waste of time

[@dharley189]

Let’s face it. There isn’t a system that works best. Can you picture the revolt if road workers were paid by the mile. There would sure be more shovel blisters on their hands rather than sore chins leaning on same shovels. As a shop owner you’ve invested a $100k almost before opening the door. Just goes uphill from there. If things go wrong the shop owner is stuck with the bills. The techs back their trucks up to the door, load up their tools and go on to greener pastures. Seldom do the owner and tech understand where each stands on income and expenses. I worked at Subaru dealer 14 years, thought I knew it all , started own shop and saw the other side of the car repair coin. I’ve had trusted employees steal from me. Seen two techs I thought were happy give their notice on same day (half my force). Six started their own shops. Now that pleased me that they got well trained at my place. They all are still friends and now they know the other side as well. If I went back into the workforce I think I would be a much better employee. My only gripe would be if I had a greedy dishonest boss. That describes most of the road building owners as well as others with fat government contracts. I’m sure that’s why their employees seem lazy to us when we bust our butt for a whole lot less. Rant over. Hope you find a solution. I never found that happy medium.

[@nitrous07me]

I’ve stopped checking my hours years ago, it stresses me out too much to be constantly checking them

[@foodskewed9197]

Ive been flat rate most of my career. I’ve yet to find an hourly shop that will pay anywhere near what I’m worth. Most hourly techs make $25 an hour around here. I won’t even set my alarm clock for that price. 😂😂😂

[@Judo-kd7ne]

For shop owners and techs that cut the corners flat rate is very profitable but not so much for customer and honest techs .

[@ghostwrench2292]

That is usually true but I have worked with some techs who did well on flat rate and they were legitimately very good technicians. In my experience, those techs are very rare, however. Most flat rate techs who flag a lot of hours I would never let them touch my personal vehicles.

[@Steve.191]

The waiting for parts on flat rate sucks post beer sickness!

[@eddieds312]

Some shops actually let you choose flate rate or hourly this is always a RED flag for me

[@ghostwrench2292]

I have worked hourly + commission, hourly, flat rate with guarantee and most of my career pure flat rate. I was never a high flagger under any sort of flat rate but I did well enough. I now work hourly at a performance shop and I’m loving life! In this environment, I would NEVER work flat rate because 99% of the cars we get are modified and labor times do not exist for much of what we do to cars. I would make a higher hourly rate if I went back to the dealer but dealership life grinds techs down by running us full speed all the time. I had enough of that.

[@AT-wl9yq]

There's one trend you may not have seen because every shop is different. But its starting to become more common. When you have a shop that has a mix of flat rate and hourly workers, they try to dispatch as much as possible to hourly people. Why pay a flat rate tech like me over $30 an hour when they can have an hourly worker do the same job for half? That's one of the main reasons I work for dealerships. The work we do is much more technical. For every brake job I do, I'll pull 10 dashboards. And probably 10 motors. Also, most of my hours are from warranty and recalls, so they can't just give the jobs to anyone.

[@drummerTBM]

I can’t help but to say but you were all for dealership/shop mentality/flat rate and just saying that people were lazy. Now you have been back stroking since getting let go. I think you owe it to us to admit that.

[@iamtheoffenderofall]

What you dont realize.....parts changers...yea....flat rate them. Theres no real skill to swap an engine, do brakes and such. Flat rate for diag guys....just simply doesnt work. Lose 4 hours for 1 hour pay diagnosing an electrical problem.

[@sonofmontezuma3732]

The greatest example of flat rate of a broken. There used to be a company called Sears and I point you to the case in California we’re it got out of hand to the point there national care repair came to an end across the country. Look it up folks and read into it. In the 70’s & 80’s it was very good thing all around till the modern car showed up and it all went down hill. Flat rate can be a good thing if you can keep up but it basicly removes all the fat and is lean on the mechanics side you hv to be knowledgeable & fast

[@seachins9174]

Thank you for your wisdom Mike!

[@baileyhatfield4273]

Everyone else in a dealer or any shop is paid Hourly. Why is it different for the techs? Maybe to inscentivise them to rush every job out so the shop makes more money...maybe to screw them on pay because they can ''make more if they hustle''. Why can a service advisor, parts guy, ect be paid hourly yet slack off? The tech gets the worst of it all. Hourly, if you pay good, have a good foreman (IF the shops big enough for that kind of thing), don't have a bunch of asshole co workers or management...is ideal. If theres a slacker, tell them how it is. If they don't improve, write them up a few times, then its a real cause for firing them later. But end of the day Hourly is it. Like you said though, if you get paid well, thats all that matters. If flat rate i'm gonna get 40 an hour, but hourly i get 25...well, you could still take your time, do a really nice quality yet quick job and make good money, but that's rare that it's such a difference.

[@mikedaugharty5544]

Great breakdown of the system there Mike great explanations and scenarios

[@bluelightguy1]

I see alot of management degradation

[@carlbyington5185]

We tend to keep it low key here... Most of my guys make between $80K, to $90K, and depending on what kind of week we had, we dole some out on Friday nights, Everybody gets along Great, and everybody hustles for that Friday night, (How is Carl feeling today) pay off. Since I have been here 40 years now, I kind of get to "pick" my clients, and most of my clients just drop the keys on the counter, and know we have their backs (Not all, ohhhh Not all)

[@tracydiller9378]

Great insight Mike and video.

[@CharlesJohnstone-c2n]

flag with gurantee is the best.

[@allancanty9579]

Nope, performance usually drops due to management issues

[@ahmadghosheh3104]

If I was a shop owner I would pay young, inexperienced techs base salary and flat rate. You work with guaranteed income to support yourself but you get the flat rate pay too. Gives them a chance to not leave and stick around since at least they can pay rent and buy food and gas. Experienced techs go to flat rate. As far as being taking advantage of, in my work if there is not ticket there's no work, period. I have to bill to a ticket when I do my time at the end of the day. If that means I sit and watch KZbin that will be it.

[@Jglivermr2]

If you dont get commission on a comeback that is slavery. I will walk the fuck out of a shop for that. My name is not on the building I am not covering the shop's labor warranty. Shop owners always claim the parts markup covers warranty, but techs do not get paid on parts profit...hmm.

[@twostroke12v71]

Commenting on the video for the algorithm

[@isorozco511]

13:45 explained exactly why i quit. The just want you to “look at something” and the dumbass writer just says they got you on the next one but that never comes. Essentially wasting your time. Or when the boss pays us 1 hr to do brakes on a car because its the brand reps or his neices car so for some mysterious reason its ok to pay us less??Thats what im worth to you????? Ok. No wonder this field is struggling to find talent.

[@AT-wl9yq]

Don't diag a car unless you get diag time.

[@isorozco511]

@@AT-wl9yq when its under warranty at a dealer you have no choice but to do it for free. Or when the writer takes it in anyways and when you ask diag time they say its not needed then you realize this job isnt worth it

[@fixntoteachya]

Commission

[@americanautoduelist2233]

Flat rate is the only way that gives the mechanic a fair cut of the profits.

[@chuckmiddaugh7908]

The only one that gives us an even cut, a proportional cut, dare I say a flat cut. I receive 27/191 of our shop rate. Is that fair? I'll be the judge of that.

[@isorozco511]

I want what you’re smoking 🤡

[@biometal770]

Bullshit. It shifts the burden of car volume onto the mechanic. That should be borne by the business itself. I get paid the same regardless how many machines my company sells.

[@biastv1234]

What if you get a heap of ‘ shit ‘ jobs ?

[@chuckmiddaugh7908]

@@biastv1234 I earn very little.