Pass The Labor Rate Bill

A. The bill establishes the Automobile Repairer Labor Rate Commission that will be empowered to establish a system to validate labor rates that insurers must pay to repairers, bases on a repairer's qualifications as an "A" or "B" shop.

A. If you choose to apply for an "A" or "B" shop classification, and are approved, then your shop will receive 100% of the indexed labor rates ("A" shops) established by the commission, or 90% of the rates ("B" shop). All registered shops that do not apply for classification are not affected by the labor rates established by the commission.

A. No.

The commission establishes the rates based on its determination of the national average collision industry rates, then those rates are indexed to the Massachusetts labor market. The indexed labor rates are market-based amounts that are validated by the commission to the state government so that they can be enforced.

A. Not all repair shops produce the same quality of work. Generally speaking, shops that are invest in and properly use the most up to date equipment, tools, training, and management techniques more than likely produce a work product that is of higher value to consumers. Because of this considerable investment by such shops, the bill requires that insurers pay a higher set of labor rates to those shops that apply to be classified by the commission. The commission will establish the criteria for its classification system after the bill is passed into law. For an example of a the requirements of a classification, please go to this web page: www.ciclink.com/ClassADef2005.pdf.

A. As proposed in the bill (H1043/S122), the commission will consist of eleven members, including the Undersecretary of Consumer Affairs and Business Regulation, or a designee, two State Senators, two members of the House of Representatives, three representatives from the insurance industry and three members of the collision repair industry. The commission will be authorized to establish its own regulations, can make amendments to those regulations, and collect fees to pay for staffing and administrative costs. The commission will develop and implement procedures to establish rates for body, paint, frame, and mechanical labor based on the national average rates indexed to the Massachusetts labor market using information provided by the US Department of Labor's Bureau of Labor Statistics. Those rates must be updated at least once every three years. In addition, the commission will develop a shop classification system, including application and inspection procedures, as well as a complaint resolution system for both insurers and collision shops. The commission will meet in public at least eight times per year.

A. Yes. In the first section of this bill, it is clearly delineated that the commission "establishes and oversees, on a periodic basis, recurring at an interval of not more than three years", all of its procedures, including the establishment of labor rates.

A. This bill is a Labor Rate Bill and, as such, deals only with that subject. Steering is another important issue, but it is not directly addressed in this legislation. It is the belief of the promoters of the bill that more properly compensated shops would have a greater ability to advertise and market their business services to the public and would, therefore, be able to gain greater control over their transactions with their customers. Thus, each shop that is classified under the system created by the Labor Rate Bill has the opportunity to create and implement their own marketing programs instead of those of the insurance companies.

A. First, you should realize that passage of the Labor Rate Bill represents the single most important opportunity for the collision industry in Massachusetts to "rejoin" the real economy. According to most credible reports, labor accounts, on average, for approximately 45% of shop revenues (parts account for 45% and paint and materials account for 10%). So, the Labor Rate Bill certainly addresses a major portion of your shop's revenue - it's very important! When you fully acknowledge this fact, then your involvement becomes a simple process of how committed you are to making vast improvements in your own business. We've made it simple for you to do several things to help, and, it all starts with visiting our website, www.passthelaborratebill.org. On our site, you can get educated about the Labor Rate Bill, learn about the political "roadmap" that we must navigate to win, look over all of the "tools" that we provide to you to make your involvement a matter of moving through a few checklists of activities, and then, decide how much of a commitment you want to make towards your future business success. If you need further clarification on certain matters, we invite you to contact our office.