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About the Massachusetts Auto Body Labor Rate Bill
If the Labor Rate Bill passes:
Q. What does this bill do?
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, based on a repairer’s qualifications as an A-, B- or C-Shop.
Q. How will this bill affect my 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 established labor rate (A-Shops) or 90% of the rate (B-Shops). Registered C-Shops are not affected by this bill.
Q. Does this bill mean that the Commonwealth of Massachusetts will set my rate?
A. No. The commission establishes the rate based on its determination of the national average collision industry labor rate that is then indexed to the Massachusetts labor market. The indexed labor rate is a market-based rate that is validated by the commission to the state government so that it can be enforced.
Q. What do the A-, B-, and C-Shop classifications mean?
A. Not all repair shops produce the same quality of work. Therefore, shops that invest in equipment, tools, and training can qualify for the rates established by the commission. This commission will establish criteria for the classifications. An example of a classification can be viewed on the web at www.ciclink.com/ClassADef2005.pdf.
Q. How does the Auto Body Labor Rate Commission work?
A. As proposed in the bill, the commission is comprised of three representatives from the collision industry, three from the insurance industry, and three political members. An executive secretary administers all functions of the commission and is the only person who receives compensation. The commission establishes its regulations, labor rates, the shop classification system, the shop inspection system, and a complaint process for both shops and insurers. The commission also sets application fees for the classification system and is funded primarily by a $100.00 annual fee from each registered shop. All decisions must be reached by a 2/3 majority vote.
Q. How would this bill affect steering?
A. This bill is a labor rate bill and, as such, deals only with that subject. Steering is another issue that is covered by another bill.
Q. Does the bill allow for ongoing labor rate changes?
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.
Q. Okay, this all sounds great! What can I do to help get this bill passed?
A. First, you must realize that passage of this bill is the single most important opportunity for the success and profitability of your business. When you acknowledge that fact, then it becomes a rather simple process of commitment. Attend at least one of the dinner meetings being promoted by over a dozen supporting jobbers across the state. Find out all you can about the bill, and follow the “political action roadmap” that you’ll get at the meeting. After that, you should join an association, network with your colleagues in the industry, get to know your state representative or senator, and commit yourself to this cause. If you’re serious about being in the collision industry, you’ve got to do everything you can to help get this bill passed. It’s your future!
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