Illinois Gov. J.B. Pritzker on July 30 signed legislation that changes how manufacturer pay is calculated on warranty work. The bill overcame opposition and takes effect Jan. 1, 2022.

 

In addition to establishing an equitable compensation scheme for warranty work, House Bill 3940 prevents manufacturers from imposing cost recovery fees or surcharges to overcome the legislation’s effect. For manufacturers, it preserves their right to approve or disapprove dealership claims, and it ensures manufacturers have a way to charge back any false or unsubstantiated claims they paid.

 

The new law requires that the booked time allowances for the diagnosis and performance of warranty work be no less than what is charged to retail customers for the same work, that manufacturers pay dealerships the same effective labor rate as the dealership receives for customer-pay repairs, and that manufacturers reimburse dealerships for any parts provided in satisfaction of a warranty at the prevailing retail price charged by the dealership when sold to retail customers. 

 

Mechanics Local 701, whose members include area technicians, worked with the CATA and other groups to advance the legislation. Supporters say it will bring a fairness to the payment process that could attract new technicians to dealerships. Wisconsin has had similar policy in place for more than a decade.

 

Pritzker’s signing came two days before unionized technicians at 56 area dealerships voted to strike rather than negotiate a new collective bargaining agreement. The latest agreement expired July 31.

 

The CATA thanks the legislative efforts of organized labor, the Illinois Automobile Dealers Association and other industry groups in working towards the legislation’s success. Additional thanks are extended to Rep. Lawrence Walsh Jr., D-Joliet, and Sen. Christopher Belt, D-East Saint Louis, for serving as lead sponsors of the legislation.