There are 3 types of pay scales used widely in the automotive work force today. Here is a break down of what to expect after graduation when entering the automotive field.
The 3 different types of pay scales used today are:
- Flat Rate
Hourly speaks for itself with one exception, when having an option to make any of these 3 wages, hourly pays the least. Unless you want to perform meaning less tasks with no chance to move up in a position or company, hourly rates usually are a bottom of the barrel pay when starting out.
Salary also speaks for itself. Most positions that are paid salary usually have a fluctuation in worked hours although the pay stays the same. If you calculate your weekly pay divided by the number of hours worked, you’ll find that you don’t get paid as much as you could.
Flat rate is a special type of pay scale that has its ups and downs. Mostly ups. It’s also one of the best and most profitable scales of the three. Flat rate is designed to pay you a specific rate like $15 or $20 per hour only for the hours turned. Hours turned? The automotive field has universally adopted the flat rate system to prevent slackers and non motivated people from costing company’s big money everyday. While on the other hand, the flat rate system rewards those who work hard and understand how to work productive and efficiently.
Labor Time Guides
The universal system otherwise known as labor times, is a set group of repair times for every part on a vehicle. These repair and replacement times were originally generated from the manufactures about 25 years ago. Trying to establish how to pay technicians for warranty repairs was a tedious but yet tremendous undertaking. The manufactures research and development department made a good investment. By tearing down a vehicle piece by piece and timing the amount of time it takes to remove and install these parts with documenting every part on a car into a journal, the manufactures created a labor time guide.
Flat Rate Breakdown
Lets say you were hired at $20 per flat rate hour. A customer brings their car in to have it checked for a coolant leak. Most places use a starting diagnosis charge of 1 hour labor to check it out. If the shop rate is $80 per hour, the customer is charged this $80 to check out the coolant leak. You get paid your $20 per flat rate to check it out.
Next, if you find the leak at the water pump you then look in the labor time guide to estimate the repair for the customer. The guide recommended time to replace the water pump is 4 hours. Take the 4 hours x the shop rate of $80 per hour and get $320 to charge the customer for the repair. Add in the 1 hour check out charge and the customer pays $400 for the labor only. You the technician will receive $20 per flat rate hour x 4 hours labor for the repair and get $80. Add in the 1 hour check out charge of $20 and you now get a total of $100 to perform this job.
The bonus or upside to this job is, If you get it done in 3 hours you still get the $100.
The down side is, if it takes longer than 5 hours you still get $100.
The inside look at flat rate will more often allow you to make money than loose money, and yes if you stand around you get paid nothing. For those who have a motivation problem on Monday morning or loose their motivation after lunch on Friday, this is why the manufactures went to this system, to keep people from milking the clock. Too many places loose money or have to up their rates to offset the loss on pay from people getting paid an hourly wage and not working. The big upswing is that each time you replace that water pump, you’ll get a little bit faster and a little bit more efficient. Time is money in this field, the better you are the more money you will make.
The best recommendation I can give after 22 years in the business, is on weeks where you make more than your clocked hours you need to bank it. If you worked 40 hours this week and got paid for 50 hours, put the extra $200 in your savings account. Trust me, you need a rainy day fund in this business.
There are slow times of the year that people don’t do repairs are when they need to save money. They typically are Christmas (to buy presents), tax time (to pay taxes), and back to school time. (shop for kids) If you have a 30 hour paycheck during the week of Christmas, reach for the rainy day fund. That’s what its there for. Plan ahead and manage your money the best that you can. The automotive industry has so much to offer and being an technician has its great rewards.
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