Massachusetts Labor Rate Commission Releases Recommendations - BodyShop Business
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Massachusetts Labor Rate Commission Releases Recommendations

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Massachusetts’ Special Commission on Auto Body Labor Rates, which studied the logistics, benefits and cost of developing an auto body repair labor rate system, has recommended giving “managed competition” in the state’s auto insurance industry six more months before any legislative action is taken to set collision repair labor rates.

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“As soon as the data for auto body labor rates through June 30, 2009 becomes available, the General Court should review it to determine what effect, if any, the implementation of managed competition has had on the auto body labor rate paid by insurance companies to auto body shops located in Massachusetts,” the commission recommended in its final report released Dec. 30.

The commission said the court should determine whether any action, including legislation, is necessary to ensure that insurers pay a “fair and reasonable” labor rate to body shops. The commission also recommended that representatives from the auto body and insurance industries meet bi-monthly to discuss best practices and other actions “that will improve the accountability and quality of services that both industries provide.”

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The approach recommended by the commission was supported by the insurance industry, while collision repairers believed “immediate relief is needed,” according to the report.

“We feel the nature of the market for labor rates is controlled so tightly in all aspects by one party – from the initial appraisal to the final payment, and all actions in between – that no force, except for the force of law, can be a counterbalance to that control,” representatives for collision repairers wrote in the commission’s report.

Repairers also asked that the commission follow guidelines set by the bill under which the commission was created – H.B. 1085, nicknamed the labor rate bill – to set labor rates. The bill enables the commission “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,” according to the Alliance of Automotive Service Providers of Massachusetts (AASP-MA) Web site www.passthelaborratebill.org.

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AASP-MA is planning meetings throughout the state to explain the commission’s findings to repairers and discuss strategy for this year’s legislative session.

Click HERE to access a copy of the commission’s report.

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