Warranty Labor Rate Increase: How to Get Paid Retail
Your factory reimburses warranty labor at one rate. You charge cash customers a higher one. For years that gap was just the cost of doing warranty work. It is not anymore. Most states now require manufacturers to reimburse warranty labor at or near your retail customer-pay rate, though the filing rules vary by state. The catch is that the law does not raise your rate for you. You have to file for it, and the filing lives or dies on documentation you are already supposed to be creating.
TL;DR
A warranty labor rate is the hourly rate a manufacturer pays a dealer for warranty repairs. In many states, dealers can increase that rate to match their retail customer-pay labor rate by filing a retail warranty reimbursement submission built from qualifying customer-pay repair orders.
What is the warranty labor rate, and why is it lower than retail?
Your warranty labor rate is what the manufacturer pays you per flagged hour on warranty repairs. Your retail or door rate is what a cash customer pays for that same hour. For decades the warranty number was a negotiated discount, and on most franchise agreements it landed well under retail. Warranty is no small slice of the work either. Industry reporting puts it at roughly a quarter of service volume and more than 15 percent of total dealership gross, so a rate that trails retail leaks real money. One worked example in WardsAuto pegged a single store running about 500 warranty hours a month at roughly $222,000 a year in lost gross from the shortfall.
The legal picture has shifted hard in the dealer’s favor. Every state now has a dealer law tying warranty reimbursement to the retail rate you charge non-warranty customers, and most cover parts as well as labor (warranty-recovery firm Armatus Dealer Uplift counts 49 states with full retail-rate statutes). The exact standard and filing rules vary by state, and you can look yours up below. The principle is consistent: warranty work should pay close to what the same work pays on a customer-pay job.
How do you raise your warranty labor rate to retail?
Here is the part that trips shops up. The law does not raise your rate on its own, and the manufacturer will not volunteer it. You have to file a submission. This filing is called a retail warranty reimbursement submission, and it works off your customer-pay repair orders, not your warranty ROs.
You pull a sample of consecutive non-warranty ROs and the manufacturer calculates your effective retail rate from it. The common standard is around 100 sequential customer-pay ROs, or 90 days of work, whichever is fewer, drawn from a recent window such as the last 180 days, per guidance summarized by NHADA and Armatus. The math is the same effective-rate formula your DMS runs: total qualifying customer labor charges divided by the labor hours that generated them, as written into statutes like Minnesota’s.
Not every ticket counts. Routine maintenance, tires, batteries, and discounted or promotional work are typically excluded from the sample, because none of those reflect your true retail labor rate. The exact exclusion list, the sample size, and the timing all vary by state and by OEM, so this is one to confirm against your own state statute before you file. Most dealers can file for a warranty labor rate increase only once a year, which means a weak filing costs you for the next twelve months.
Statutory or factory submission: which should you file?
There are two ways to file a labor rate submission, and they are not equal.
A factory submission follows the manufacturer’s own policies and procedures manual. The requirements vary by OEM and can be as light as 20 consecutive qualifying ROs from the last 30 days. The catch is control. There is no required response timeline, and the offer that comes back is take it or leave it, with no recourse if it is low.
A statutory submission follows your state’s dealer law. The requirements are standardized across the state, commonly 100 sequential qualifying ROs closed in the last 180 days. The manufacturer has to respond within a set window, typically 30 days, and if it rejects or cuts your rate, the statute gives you a rebuttal process. That is the comparison drawn by NHADA, and it is why most dealers who have the documentation to support it file under the statute.
Warranty labor rate rules by state
The pattern is similar from state to state, but the details that decide your filing are not. Many states set the repair order sample for parts markup only and handle labor another way, and about half give the manufacturer a way to push back on your rate, often by comparing it with other dealers. Pick your state to see its rules, read from the statute itself.
Look up your state
Choose a state to see how its statute sets your warranty labor rate and parts markup, how often you can file, and how long the manufacturer has to respond.
Alabama
Ala. Code §8-20-7(c),(f)- Labor rate
- Total labor charges on qualified ROs divided by hours, from fewer of 100 sequential or 90 days, last 180 days.
- Parts markup
- Total parts charges divided by parts cost, minus 1, times 100. Same ROs or a separate set.
- How often you can file
- Once per 12 months
- Manufacturer response
- Effective 45 days after OEM receives it unless OEM rebuts once in that window. Court win is retroactive to day 45.
Manufacturer can push back: Retail rates count only if not unreasonable, and wage rates paid by similar dealers in the state are a factor.
Alaska
Alaska Stat. §45.25.210- Labor rate
- Not less than the dealer's rate for similar retail nonwarranty work, unless otherwise agreed. No RO method for labor.
- Parts markup
- Lesser of 100 sequential customer-pay ROs or 90 days of ROs, from the last 180 days.
- How often you can file
- 1 rate increase per calendar year
- Manufacturer response
- Disapprove within 30 days or deemed approved. Takes effect no more than 30 days after approval.
Manufacturer can push back: The manufacturer can disapprove a rate that is materially miscalculated or unreasonable compared to similar dealers in Alaska.
Arizona
Ariz. Rev. Stat. §28-4451(D)-(F)- Labor rate
- Optional RO method: lesser of 100 sequential customer-pay ROs or 90 days, from the last 180 days. Labor sales divided by hours.
- Parts markup
- Same RO sample as labor. Parts sales divided by parts cost, minus 1, as a percentage.
- How often you can file
- Once per 12 months
- Manufacturer response
- Rebut within 30 days and propose an adjustment, otherwise effective 30 days after the manufacturer receives the declaration.
Manufacturer can push back: The manufacturer can rebut within 30 days if the rate is inaccurate or unreasonable compared to similar same-make dealers in Arizona.
- Labor rate
- Retail labor rate: labor sales divided by hours on qualified customer-pay ROs, lesser of 100 sequential or 90 days, last 180 days.
- Parts markup
- Retail markup from the same qualified ROs: parts sales divided by cost, minus 1, as a percentage.
- How often you can file
- Not stated in the statute
- Manufacturer response
- Approve or disapprove a rate change request within 45 days, or it is deemed approved. Effective date not stated.
Manufacturer can push back: The retail rate applies only if it is reasonable compared to same-make dealers in the dealer's market area.
California
Cal. Veh. Code §3065.2- Labor rate
- Total labor charges on the submitted ROs divided by the hours that produced them.
- Parts markup
- Total parts charges divided by parts cost, minus 1, times 100. Same ROs or a separate set.
- How often you can file
- Once a calendar year
- Manufacturer response
- OEM may contest within 30 days, only for material inaccuracy or fraud. Uncontested rate takes effect day 30 after receipt.
Colorado
Colo. Rev. Stat. §44-20-141.5- Labor rate
- Dealer's choice: 100 sequential customer-pay ROs or all customer-pay ROs over 90 days, from the last 90 days. Sales divided by hours.
- Parts markup
- Same RO options, separately or together with labor. Parts sales divided by cost, minus 1, as a percentage.
- How often you can file
- Once a year for labor and once a year for parts
- Manufacturer response
- Contest within 45 days only if materially inaccurate, otherwise effective day 45. Rate set in a dispute applies back to day 30.
Connecticut
Conn. Gen. Stat. §42-133s- Labor rate
- All customer-pay ROs from the month before submission. Total labor sales divided by labor hours.
- Parts markup
- Lesser of 100 sequential customer-pay ROs or 60 days of ROs, from the last 180 days.
- How often you can file
- Twice per calendar year
- Manufacturer response
- Rebut within 30 days and propose an adjustment within 30 days, otherwise effective 30 days after declaration, subject to audit.
Manufacturer can push back: The manufacturer can rebut within 30 days by showing the rate is unfair compared to same-make dealers in the vicinity.
Delaware
6 Del. C. §4903(b)- Labor rate
- Rate from the lesser of 100 sequential customer-pay ROs or 90 days of ROs, from the last 180 days.
- Parts markup
- Markup from the same RO sample.
- How often you can file
- Once every 9 months
- Manufacturer response
- Effective within 30 days of submission and presumed fair. A manufacturer info request within 30 days restarts the clock.
Florida
Fla. Stat. §320.696- Labor rate
- If no agreement in 30 days, dealer picks greater of prior month's retail labor sales divided by hours, or gross profit method.
- Parts markup
- If no agreement in 30 days, greater of markup on 50 consecutive retail ROs in 3 months, OEM list price, or gross profit method.
- How often you can file
- Twice a year at most (parts or labor)
- Manufacturer response
- Any increase is paid retroactively on claims filed from 15 days after the OEM receives the request.
Georgia
O.C.G.A. §10-1-641(a)- Labor rate
- Labor sales divided by hours, from the lesser of 100 sequential customer-pay ROs or 90 days of ROs, last 180 days.
- Parts markup
- Markup from the same kind of RO sample: parts sales divided by cost, minus 1, times 100.
- How often you can file
- Once per calendar year
- Manufacturer response
- Approve or disapprove within 30 days, or deemed approved. Effective 30 days after approval.
Manufacturer can push back: The manufacturer can contest the rate by showing it is unreasonable compared with similarly situated dealers nearby.
- Labor rate
- Not less than, and not more than, the dealer's retail labor rate. No RO method for labor.
- Parts markup
- 100 qualifying consecutive customer-pay ROs from recent months. If unavailable, all ROs of all types from the prior 2 months.
- How often you can file
- Once every 12 months (parts)
- Manufacturer response
- Parts markup takes effect within 90 days of submission. Requests for more information restart the clock.
Manufacturer can push back: Labor must be paid at the retail rate, but the parts markup must not be unreasonable compared to same-make dealers in Hawaii.
Idaho
Idaho Code §49-1626(11)- Labor rate
- Same RO sample as parts: lesser of 100 sequential customer-pay ROs or 90 days, from the last 180 days.
- Parts markup
- Lesser of 100 sequential customer-pay ROs or 90 days, from the last 180 days. Menu-priced work excluded.
- How often you can file
- Once every 12 months
- Manufacturer response
- Effective within 90 days of submission. Manufacturer may request more information within 30 days, which restarts the clock.
Manufacturer can push back: The retail rate must not be unreasonable compared to same or competing franchises in the dealer's area.
Illinois
815 ILCS 710/6- Labor rate
- Effective labor rate from 100 sequential customer-pay ROs chosen by the dealer, minus simple maintenance ROs.
- Parts markup
- Lesser of 100 sequential or 90 days of customer-pay ROs, from the last 180 days; declare average markup.
- How often you can file
- Labor once a calendar year; parts twice a calendar year
- Manufacturer response
- Parts markup effective 30 days after declaration, subject to OEM audit within 30 days. Labor: not stated in the statute.
Manufacturer can push back: The parts retail price must not be unreasonable compared with same-make dealers in the area, and the OEM may audit the parts sample.
Indiana
Ind. Code §9-32-13-15.5- Labor rate
- Labor sales divided by hours in 100 sequential customer-pay ROs or 90 days of ROs, from the last 180 days.
- Parts markup
- Lesser of 100 sequential customer-pay ROs or 90 days. Parts charges divided by cost, minus 1. Last 180 days.
- How often you can file
- Once per 12 months
- Manufacturer response
- Rebut within 60 days if unreasonable or materially inaccurate, otherwise effective automatically.
- Labor rate
- Lesser of 100 sequential customer-pay ROs or 90 days, from the last 180 days. Labor sales divided by hours.
- Parts markup
- Same RO sample. Parts charges divided by cost, minus 1, as a percentage.
- How often you can file
- Once per year
- Manufacturer response
- May audit within 30 days, then approve or deny. Effective 45 days after approval.
Manufacturer can push back: The retail rate applies only if reasonable, and the manufacturer can deny it but must prove the denial was reasonable.
Kansas
Kan. Stat. §8-2415(c)- Labor rate
- Lesser of 100 sequential customer-pay ROs or 90 days, from the last 180 days. Labor sales divided by hours.
- Parts markup
- Same RO sample. Parts charges divided by cost, minus 1, as a percentage.
- How often you can file
- Once per year
- Manufacturer response
- May audit within 30 days, then approve or deny. Effective 45 days after approval.
Manufacturer can push back: The retail rate applies only if reasonable, and the manufacturer can deny it but must prove the denial was reasonable.
Kentucky
KRS 190.046(2)- Labor rate
- No less than the dealer's charge to retail customers for like nonwarranty service. No RO sample method.
- Parts markup
- No less than the dealer's retail charge, with a minimum of dealer cost plus 30% gross profit.
- How often you can file
- Not stated in the statute
- Manufacturer response
- Not stated in the statute
Manufacturer can push back: No RO sample method. The statute sets a floor at the dealer's retail charges, with parts at least cost plus 30%.
Louisiana
La. R.S. 32:1262(A)- Labor rate
- Total labor charges divided by hours, from the fewer of 100 sequential qualifying ROs or 90 days of ROs, last 180 days.
- Parts markup
- Markup from the same RO sample: total parts charges divided by parts cost, minus 1, times 100.
- How often you can file
- Once per 12 months
- Manufacturer response
- Presumed accurate. Effective 45 days after receipt unless the manufacturer rebuts within 45 days.
Maine
10 M.R.S. §1176- Labor rate
- The dealer's retail labor rate, as long as it is posted where service customers can see it. No RO method.
- Parts markup
- Average markup from the lesser (by total cost) of 100 sequential customer-pay ROs or 60 days of ROs, last 180 days.
- How often you can file
- Twice a year (parts markup, per calendar year). Not stated for labor.
- Manufacturer response
- Parts markup takes effect 30 days after the declaration, subject to manufacturer audit and adjustment.
Maryland
Md. Code, Transp. §15-212(c)- Labor rate
- Retail labor rate from whichever gives fewer ROs: 100 sequential qualifying customer-pay ROs or 90 days, within the last 180 days.
- Parts markup
- Cost plus retail markup from the same RO sample: total parts charges divided by total parts cost, minus 1.
- How often you can file
- Once a year
- Manufacturer response
- Approve or rebut within 30 days; if no rebuttal, effective day 31. If approved, payment starts within 30 days.
Massachusetts
Mass. Gen. Laws c.93B §9(b)- Labor rate
- Lesser of 100 sequential customer-pay ROs or 60 consecutive days, last 180 days. Total labor sales divided by labor hours.
- Parts markup
- Average markup from the same RO method, unless dealer and manufacturer agree in writing on a markup within 30 days of request.
- How often you can file
- Once a year (per calendar year, parts and labor)
- Manufacturer response
- Effective day 30 after declaration, subject to audit. Manufacturer must propose any adjustment within 30 days of submission.
Michigan
MCL §§445.1577, 445.1577a- Labor rate
- Total labor sales divided by hours, from lesser of 100 consecutive customer-pay ROs or 90 days, last 180 days.
- Parts markup
- Total parts sales divided by parts cost, minus 1, times 100, from the same RO sample.
- How often you can file
- Once a calendar year
- Manufacturer response
- OEM approves or disapproves within 45 days, or it is deemed approved. Effective 30 days after approval.
Manufacturer can push back: The manufacturer can contest using the parts prices and labor rates of similar same-make dealers in a comparable area of Michigan.
Minnesota
Minn. Stat. §80E.041- Labor rate
- At dealer's election: total customer labor charges divided by labor hours, from the parts RO sample, times the dealer's time guide.
- Parts markup
- At dealer's election: lesser of 100 sequential or 90 days of customer-pay ROs with warranty-like repairs, last 180 days. Otherwise cost plus reasonable markup.
- How often you can file
- Once a year (parts and labor)
- Manufacturer response
- Disapprove in writing within 30 days with substantiation and a proposed adjustment, or the rate is approved. Effective date not stated.
Manufacturer can push back: The manufacturer can disapprove using comparable same-make dealers' rates in a comparable area of the state.
Mississippi
Miss. Code Ann. §63-17-86- Labor rate
- Rate from the fewer of 100 sequential qualifying ROs or 90 days of ROs, from the last 180 days.
- Parts markup
- Markup from the same RO sample.
- How often you can file
- Once per 12 months
- Manufacturer response
- Effective 45 days after submission unless the manufacturer rebuts within 45 days.
Missouri
Mo. Rev. Stat. §407.828; §407.583- Labor rate
- No less than the dealer's posted nonwarranty labor rate (§407.583). Retail labor rates are the principal factor.
- Parts markup
- The amount the dealer charges retail customers for similar parts is the primary factor. No RO method.
- How often you can file
- Twice a year (labor or parts rate requests, per calendar year)
- Manufacturer response
- Not stated in the statute. A denied rate increase can be appealed to the Administrative Hearing Commission within 60 days.
Manufacturer can push back: Retail rates are the principal factor for reasonable compensation, not a fixed formula, and there is no RO-sample method.
Montana
Mont. Code Ann. §61-4-213- Labor rate
- Fewer ROs of 100 sequential qualified ROs or 90 consecutive days, last 180 days. Total labor charges divided by hours charged.
- Parts markup
- Same RO method: total parts charges divided by total parts cost, minus 1, times 100.
- How often you can file
- Once per 12 months (labor and parts each)
- Manufacturer response
- Effective day 30 after receipt unless manufacturer objects within 30 days that the rate is materially inaccurate.
Nebraska
Neb. Rev. Stat. §60-1438- Labor rate
- No less than the dealer's rate to retail or fleet customers. Prevailing local dealer wage rates are a principal factor.
- Parts markup
- Average markup from the lesser of 100 sequential customer-pay ROs or 90 days of ROs, from the last 180 days.
- How often you can file
- Twice per calendar year (parts)
- Manufacturer response
- Manufacturer may audit and approve or deny within 30 days. Markup takes effect 45 days after approval.
Manufacturer can push back: The RO sample method covers parts only. Labor must be no less than the dealer's retail or fleet rate, with local dealer wage rates as a principal factor.
Nevada
NRS 482.36385(3)- Labor rate
- No less than what the dealer charges retail customers for nonwarranty labor. No RO method.
- Parts markup
- No less than what the dealer charges retail customers for parts. No RO method.
- How often you can file
- Not stated in the statute
- Manufacturer response
- Not stated in the statute
New Hampshire
N.H. Rev. Stat. §357-C:5, II(b)- Labor rate
- No less than what the dealer charges retail customers for like nonwarranty work. No RO method for labor.
- Parts markup
- If no agreed markup within 30 days: lesser of 100 sequential or 90 consecutive days of customer-pay ROs, last 180 days.
- How often you can file
- Once a year (per calendar year)
- Manufacturer response
- Effective day 30 after submission. Manufacturer must signal rebuttal by day 30 and propose an adjustment by day 60.
Manufacturer can push back: The declared parts rate must be reasonable compared with similar-size same-make dealers nearby.
New Jersey
N.J.S.A. 56:10-15- Labor rate
- Average hourly rate from the lesser of 100 sequential customer-pay ROs or 90 days of ROs, from the last 180 days.
- Parts markup
- Average parts markup from the lesser of 100 sequential customer-pay ROs or 90 days of ROs, from the last 180 days.
- How often you can file
- Twice per calendar year
- Manufacturer response
- Effective 30 days after the dealer's declaration. The manufacturer may adjust only through an audit of the submitted sample.
- Labor rate
- Lesser of 100 sequential or 90 days of customer-pay ROs, last 180 days, declaring the average customer-pay labor rate.
- Parts markup
- Cost plus average markup from the lesser of 100 sequential or 90 days of customer-pay ROs, last 180 days.
- How often you can file
- Twice a year (per calendar year, parts and labor)
- Manufacturer response
- Parts markup takes effect 30 days after submission. Not stated for labor.
Manufacturer can push back: The manufacturer can refuse an increase if the rate was miscalculated or unreasonably exceeds all other same or competing line dealers in the market area.
New York
N.Y. Veh. & Traf. Law §465- Labor rate
- Not less than the dealer's rate to non-warranty customers for like service. No RO method stated for labor.
- Parts markup
- Lesser of 100 sequential customer-pay ROs or 90 days of ROs, from the last 180 days; declare average markup.
- How often you can file
- Once a calendar year
- Manufacturer response
- Declared rate takes effect 30 days after declaration. If rebutted, dealer can resubmit within 60 days; OEM responds within 60 days.
Manufacturer can push back: The manufacturer can rebut by showing the rate is unreasonable compared with all same-make dealers in the vicinity.
North Carolina
N.C. Gen. Stat. §20-305.1(a)-(a4)- Labor rate
- Average labor rate from lesser of 100 sequential customer-pay ROs or 60 days with warranty-like parts, last 180 days.
- Parts markup
- Average markup from the same RO sample (lesser of 100 sequential or 60 days, last 180 days).
- How often you can file
- Not stated in the statute
- Manufacturer response
- OEM may rebut within 30 days as inaccurate, proposing an adjustment by day 60. If dealer wins a protest, effective day 60.
North Dakota
N.D. Cent. Code §51-07-29- Labor rate
- Same RO sample as parts. Total labor sales divided by hours, times the dealer's own time guide.
- Parts markup
- Average markup from the lesser of 100 sequential or 90 consecutive days of customer-pay ROs with warranty-like parts, last 180 days.
- How often you can file
- Once per 12 months (parts and labor each)
- Manufacturer response
- Contest within 30 days with calculations and a proposed rate, or approved. Effective day 30 after receipt.
- Labor rate
- Total labor sales divided by labor hours, from 100 sequential customer-pay ROs or all ROs in 90 days, last 180 days.
- Parts markup
- Total parts sales divided by parts cost, minus 1, times 100. Same ROs or a separate set.
- How often you can file
- Once a calendar year
- Manufacturer response
- OEM may contest within 30 days as materially inaccurate; otherwise rate takes effect. Disputed outcome applies retroactively from day 30.
Oklahoma
47 O.S. §565(A)(9)(b)- Labor rate
- Labor sales divided by labor hours on the lesser of 100 sequential ROs or 90 days, last 180 days.
- Parts markup
- Average markup on the same RO sample. One request can set parts, labor, or both.
- How often you can file
- Once every 12 months
- Manufacturer response
- Rebut within 45 days; rate takes effect 30 days after approval. Dealer may protest to the Commission.
Oregon
ORS 650.158(2)- Labor rate
- Hourly rate from the lesser of 100 sequential ROs or 90 days, last 180 days. Never below the nonwarranty rate.
- Parts markup
- Same RO sample. Pays what the dealer charges nonwarranty customers, if not unreasonable.
- How often you can file
- Once a year
- Manufacturer response
- Contest within 30 days or it is approved; effective 30 days after approval.
Manufacturer can push back: The manufacturer can contest using rates from at least 3 same-make dealers in contiguous or economically similar markets.
Pennsylvania
Board of Vehicles Act §307 (63 P.S. §818.307)- Labor rate
- Total labor sales divided by labor hours, from lesser of 100 sequential customer-pay ROs or 90 days, last 180 days.
- Parts markup
- Average markup from lesser of 100 sequential customer-pay ROs or 90 days with warranty-like parts, last 180 days.
- How often you can file
- Once a calendar year
- Manufacturer response
- OEM may rebut within 60 days. Otherwise the rate takes effect 60 days after the declaration.
Manufacturer can push back: The manufacturer can rebut within 60 days by showing the declared rate is unreasonable or materially inaccurate.
- Labor rate
- Rate is labor sales over hours on all customer-pay ROs from the prior month, paid on technicians' actual punched time.
- Parts markup
- Lesser of 100 sequential ROs or 60 days, last 180 days. Average markup on warranty-like parts.
- How often you can file
- Twice a calendar year
- Manufacturer response
- Rebut within 30 days; rate takes effect 30 days after declaration. Dealer may protest to the department.
Manufacturer can push back: The manufacturer can rebut using rates at other same-make dealers nearby (for parts, their advertised retail rates in the relevant market area).
South Carolina
S.C. Code §56-15-60(C)- Labor rate
- Labor sales divided by hours on the lesser of 100 sequential ROs or 90 days, last 180 days.
- Parts markup
- Same RO sample. Warranty parts paid at cost times 1 plus average markup.
- How often you can file
- Once per 12 months
- Manufacturer response
- Approve or deny (base deadline not stated; extended 30 days if more documents requested). Effective 30 days after approval.
South Dakota
SDCL §32-6B-61- Labor rate
- Not less than the dealer's nonwarranty labor rate. The manufacturer must rely on the dealer's written rate schedule.
- Parts markup
- Not less than the dealer's current retail price for the parts.
- How often you can file
- Not stated in the statute
- Manufacturer response
- Not stated in the statute
Tennessee
Tenn. Code Ann. §55-17-121- Labor rate
- Dealer files a sworn retail labor rate with the commission. The manufacturer pays it unless it shows the commission the rate is improper.
- Parts markup
- Markup from the lesser of 100 sequential customer-pay ROs or 90 days of ROs, from the last 180 days.
- How often you can file
- Once per year (parts)
- Manufacturer response
- Parts: manufacturer approves or denies within 30 days. Effective 45 days after approval.
Manufacturer can push back: Labor is set by the dealer's sworn rate statement to the Motor Vehicle Commission, not an RO sample. The RO method covers parts only.
- Labor rate
- Greater of average labor rate on 100 sequential non-warranty ROs or 90 consecutive days, both within prior 6 months.
- Parts markup
- No markup method. General rule only: not less than what retail customers pay for similar work.
- How often you can file
- Once a year (labor), unless both sides agree
- Manufacturer response
- OEM approves or disapproves within 60 days. If the board sides with the dealer, rate is effective day 60.
- Labor rate
- Labor charges divided by hours on qualified repairs: fewer of 100 sequential ROs or 90 days, last 180 days.
- Parts markup
- Same RO sample. Parts charges divided by parts cost, minus 1, as a percentage.
- How often you can file
- Once per 12 months (labor and parts each)
- Manufacturer response
- Effective day 30 unless the manufacturer objects to accuracy or requests more ROs within 30 days. Payment starts within 15 days.
Vermont
9 V.S.A. §4086- Labor rate
- Dealer's retail labor rate, if routinely posted where service customers can see it.
- Parts markup
- Lesser total cost of 100 sequential ROs or 60 days, last 180 days. Average markup.
- How often you can file
- Twice a calendar year (parts)
- Manufacturer response
- Parts markup takes effect 30 days after declaration, subject to audit and adjustment.
Manufacturer can push back: The manufacturer can rebut using the practices of at least 4 nearby dealers of the same or a competing make.
Virginia
Va. Code §46.2-1571(A)- Labor rate
- Not less than the retail rate. Increases based on 100 consecutive ROs or 90 days, whichever comes first.
- Parts markup
- Agreed markup. If no agreement, average retail markup from the same RO sample.
- How often you can file
- Not stated in the statute
- Manufacturer response
- Not stated in the statute
Washington
RCW 46.96.105- Labor rate
- Dealer's retail labor and diagnostic rate. No RO method stated. Dealer may resubmit if refused.
- Parts markup
- Lesser of 100 sequential ROs or 90 days, last 180 days. Average markup.
- How often you can file
- One increase per calendar year
- Manufacturer response
- Parts markup takes effect 30 days after submission. Labor response not stated.
Manufacturer can push back: The manufacturer can refuse a labor increase that unreasonably exceeds all same-market dealers' rates.
West Virginia
W. Va. Code §17A-6A-8a- Labor rate
- Labor sales divided by hours on 100 sequential ROs or 90 days, last 180 days.
- Parts markup
- Same RO sample or a separate one. Average markup on warranty-like parts.
- How often you can file
- Once per 12 months (parts and labor each)
- Manufacturer response
- Approve or rebut within 30 days or it is deemed approved; effective 30 days after approval.
Manufacturer can push back: The manufacturer can rebut a rate as unreasonable compared with same-make dealers in an economically similar area of the state.
Wisconsin
Wis. Stat. §218.0125(3m), (4m), (5)- Labor rate
- Customer labor charges divided by the manufacturer's warranty time allowances for those repairs, from the RO sample.
- Parts markup
- Lesser of 100 sequential ROs or 90 days, last 180 days. Cost times average markup.
- How often you can file
- Not stated in the statute
- Manufacturer response
- Must start paying the substantiated rate within 30 days. May dispute in writing with an explanation.
Manufacturer can push back: For parts, the manufacturer has a defense if the markup is not reasonably competitive with similar dealers in the state.
Wyoming
Wyo. Stat. §31-16-117- Labor rate
- Labor charges divided by hours, from the lesser of 100 sequential qualified ROs or 90 days of ROs, last 180 days.
- Parts markup
- Markup from the same RO sample.
- How often you can file
- Once per 12 months, unless set by mutual agreement
- Manufacturer response
- Manufacturer may request more ROs or contest within 30 days. Otherwise effective 45 days after receipt. Contests go to mediation.
All states
Read from each state's statute, October 2026. Statutes get amended, so confirm against the current text before you file. This is a reference, not legal advice.
Warranty rate submission checklist
Run through this before anything goes to the manufacturer:
- Pick your path. Read your state statute and your OEM’s submission protocol, then decide between a statutory and a factory filing.
- Pull the sample. Gather the consecutive customer-pay ROs your statute requires, commonly 100 sequential ROs closed in the last 180 days, or 90 days of work if that is fewer.
- Strip the exclusions. Remove what your statute excludes. Routine maintenance, tires, batteries, alignments, service contract or insurance-paid work, fleet or government work, and discounted or promotional tickets are common exclusions.
- Audit every RO in the sample. Each one needs technician time punches, the required signatures, and a complete complaint, cause, and correction on every line.
- Run the math. Total qualifying customer labor charges divided by the labor hours that generated them. That is the effective retail rate you are submitting.
- Calendar the response window. Note the date the manufacturer has to answer by, and have your support ready in case it rebuts.
- Calendar the next filing. Most dealers can file once every 12 months. Mark the earliest date you can file again.
- Do not forget parts. Where your state covers parts markup too, file for it, following the same sample discipline.
The Retail Rate Submission, in Three Steps
What gets a warranty rate submission rejected?
A manufacturer can dispute your declared rate as materially incomplete, materially inaccurate, or materially unreasonable, and then audit the sample. Thin repair orders are what give them the opening. The defects that get lines pulled or the rate chipped down are the same ones that get individual claims denied: missing technician time punches, missing customer or manager signatures, and vague 3Cs that do not show a clear complaint, cause, and correction on each line. As one warranty-audit resource puts it, incomplete repair documentation is one of the largest causes of warranty non-compliance. Your sample only proves a rate as high as your documentation supports.
The rate you can claim is the rate you actually document
This is the part most shops miss. The number you get to submit comes straight out of your customer-pay labor charges divided by your customer-pay hours. Two stores with the identical sign out front can submit very different effective rates, depending on how many billable hours actually land on each RO and how much labor gets discounted away at the counter.
That makes this the same fight as your effective labor rate. Every finding a tech never logs and every labor discount written off the ticket lowers the sample, so you end up submitting a number below what your shop really earns. Capturing every billable hour does double duty here. It lifts the rate you live on day to day, and it supports the warranty rate you are asking the manufacturer to reimburse. The fastest place to find those hours is the inspection, which is exactly the leak in your MPI completion rate.
Where TenthGear fits
TenthGear does not file your submission and it does not set your rate. It helps the submission by improving the repair orders underneath it. More of the billable work a tech finds gets captured during the inspection, so the customer-pay lines in your sample reflect what the shop really does instead of what made it onto the clipboard. The complaint, cause, and correction on each line stay complete and consistent, which gives an auditor less room to call the sample materially incomplete. And weak stories get flagged before they ship, so the warranty work you write after the increase keeps passing review. That last part matters, because a wave of denied warranty claims or a failed warranty audit claws back the exact gross you just fought to raise.
The higher rate is already available to you in most states. The manufacturer is not going to hand it over, and a stack of thin repair orders will not get it for you either. File the submission, build it on clean customer-pay documentation, and keep your warranty stories strong enough to hold the rate once you have it.
One more thing worth knowing once the rate is settled: rate is only half of what you get paid. The other half is time, and that is the fight state legislatures are moving on now. It shows up first on diagnostic work.