Massachusetts House Bill H4019

Massachusetts 2025-2026 Regular Session

• Introduced: 4/10/25
• Refer: 4/10/25

Caption

To ensure fair compensation for warranty service labor

Impact

The impact of this bill on state law is significant, particularly for automotive dealerships and their relationships with manufacturers. By implementing a standardized method for establishing labor rates, H4019 seeks to eliminate ambiguity and ensure that dealers are compensated fairly for warranty service. The bill implies that dealers will no longer have to rely solely on manufacturer-set rates, allowing them more autonomy in setting prices based on their operational realities. This could lead to increased financial stability for dealerships that often face challenges with warranty reimbursements that do not align with their actual labor costs.

Summary

House Bill H4019 aims to ensure fair compensation for warranty service labor by amending existing laws related to labor rates in automotive repairs. Specifically, it seeks to establish guidelines for determining the retail labor rates that dealers can charge for warranty service. According to the proposed amendments, dealers would be allowed to determine their labor rates using reasonable labor time allowances or by submitting customer-paid service repair orders to the manufacturer or distributor for review. This approach is intended to provide a structured framework for determining what constitutes fair and reasonable labor compensation for warranty services.

Contention

While the bill addresses an important issue for dealers, there are notable points of contention surrounding its provisions. Critics may argue that the bill gives manufacturers excessive control over the compensation process by allowing them to audit submitted labor rates and propose adjustments. This raises questions about whether such oversight could lead to further disputes between dealers and manufacturers, especially regarding what is deemed as 'fair and reasonable.' Additionally, the requirement for dealers to document a specific number of non-warranty repair orders may present a burden for smaller dealerships that struggle with record keeping or have lower volumes of repairs.