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Benefits for auto repair shops

Techs and service writers work by the hour or by the flag, and a thin benefits package is easy for the next shop to beat.

Confirm anything about taxes with your own CPA or licensed tax advisor before you act.

Last updated: 2026-10-26

A mechanic in blue coveralls stands under a car raised on a lift and turns a wrench on the front suspension in a hazy, brightly lit workshop.
Working on a car's front suspension from below. Photo: Artem Podrez on Pexels (opens in a new tab)

My techs are paid flat rate. How do their hours count?

The federal full-time test counts hours of service, and full-time means an average of 30 or more a week, or 130 a month. For techs paid by the job, keep a record of the hours they are actually at work, and ask your advisor how those hours should be counted.

How do I keep good techs from leaving for a dealership?

Ask your techs what they would value most. Health coverage, disability coverage for a job that is hard on the back and hands, paid time off and a retirement plan are the usual answers. A clear plan you can afford every year beats a rich one you have to cut.

What changes if I open a second shop?

Your headcount grows, and federal rules start at set sizes: COBRA at 20 employees, the health coverage rule at 50 full-time employees. Ask your advisor whether shops under common ownership count together.

Where these facts come from

Questions owners ask

Do I have to offer health insurance to my techs?

Federal law requires it only of applicable large employers, which have 50 or more full-time employees, counting full-time equivalents, on average during the prior year.

How long can a new tech wait before coverage starts?

Up to 90 days. A group health plan cannot apply a longer waiting period.

Can full-time and part-time staff get different benefits?

A CHOICE Arrangement can be offered to some classes of employees and not others, and full-time and part-time status are among the classes allowed.

Does COBRA apply to my shop?

If your shop had 20 or more employees in the prior year and offers a group health plan, federal COBRA generally applies.

Three roofers are silhouetted on the roof ridge of a house against a yellow evening sky, one carrying a long-handled fork tool on his shoulder.

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