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Vol. 7, Issue 8
August 1, 2016

OSHA INCREASES MONETARY PENALTIES

Near 80% increase on August 1, 2016

     The Occupational Safety and Health Administration (OSHA) is increasing the amount of its monetary penalties by nearly 80% as a result of new federal legislation passed in 2015.  Any citations issued by OSHA after August 1, 2016, for violations that occurred after November 2, 2015, will be subject to the new, higher penalty amounts.   
 
     The maximum penalty for serious violations rises from $7,000 to $12,471 per violation and the maximum penalty for willful or repeated violations increases from $70,000 to $124,709 per violation.  OSHA will continue to adjust penalty amounts for inflation annually based on the Consumer Price Index.

COMMON VIOLATIONS
 
     The most common violations issued by OSHA against auto dealers are:  
  1. Hazard Communication (Written program to educate and train employees on toxic/hazardous chemicals in the workplace);
  2. General Duty Clause  (Compliance with OSHA guidelines, implementing written safety policies and procedures and providing a workplace free from hazards that could cause serious harm or death);
  3. Abrasive wheel machinery (Proper employee training and maintenance of equipment);
  4. Wiring methods, components, and equipment for general use (Using the proper electrical cords and outlets);
  5. Personal Protective Equipment (Providing safety equipment to protect an employee from safety hazards);
  6. Electrical Safety (Protecting employees from electric shock, electrocution and fires);
  7. Spray finishing using flammable and combustible materials (Use of mechanical ventilation adequate to remove flammable vapors);
  8. Respiratory Protection (Providing a written program on respirator use and providing properly fitted respirators for use when handling toxic/hazardous chemicals);
  9. Portable Fire Extinguishers (Providing adequate and accessible fire suppression equipment); and
  10. General Requirements for All Machines (Providing protective guards and warnings where necessary to prevent injury). 
     For more information on the OSHA requirements or for a free evaluation of your dealership's compliance with the OSHA rules in the sales and service departments contact Stevan LaBonte at 516-280-8580.   

ARE YOU RECEIVING RETAIL RATES
FOR WARRANTY PARTS?

(If not read on to find our how!)

      Are you receiving retail rates from the manufacturer for parts used in connection with warranty repairs?  Believe it or not but many dealers are still receiving mark ups well below their retail rate for parts used in warranty repairs.

     New York State Law requires manufacturers to reimburse dealers at the dealer's retail rate for warranty parts.  If the factory is not issuing you reimbursement at retail rates then your dealership is losing hundreds of thousands of dollars in additional revenue annually.  Don't delay; submit your demand for increased reimbursement today.  The average warranty parts markup noted in factory reimbursement submissions prepared by the LaBonte Law Group exceeds 80%; are you leaving well deserved money on the table?
 
     The following is a summary of how to document your retail rate and file the necessary information to secure your increased reimbursement:
 
1.      ANALYZE REPAIR ORDERS.   Dealers must select 100 sequential repair orders (or 90 days of repair orders; whichever is less) demonstrating customer pay (non-warranty) work generated sometime within the last 6 months.  Ideally, the best way to select the 100 sequential repair orders and maximize your increased rate is to select at least one sample of 100 repair orders from each of the last 6 months.  Select the sample which demonstrates the highest retail mark-up.  Be careful; taking just one random sample of repair orders could result in thousands in lost revenue per month.  
 
2.      EXCLUDE MAINTENANCE AND RECALL WORK.   The repair orders submitted to the manufacturer should exclude all maintenance (i.e. oil changes, tire rotation, tires, brake pads, etc.) and recall work.  Only customer pay repair orders are included.  In total you may have to review several hundred to several thousand repair orders before you reach the 100 sequential repair orders necessary to demonstrate your dealership's non-warranty mark-up. 
 
3.      PREPARE A SPREADSHEET :  Input the data from the repair orders into a spreadsheet.  You must include, at minimum, the following information:
 
a.      Repair order number;
b.      Date of repair;
c.      Repair description;
d.      Part number;
e.      Part description;
f.       Part cost;
g.      Dealer retail price; and
h.      Mark-up percentage.
 
      Total up and calculate the average mark-up and highlight the retail rate.
 
4.  SUBMIT REPORT TO MANUFACTURER:  Send the spreadsheet and copies of the 100 sequential repair orders to the manufacturer along with a cover letter requesting the increased warranty parts reimbursement.  The manufacturer must reimburse you at the higher rate within 30 days after filing the request.
 
     Dealers must carefully review each repair order and verify that the correct information is inserted into the spreadsheet.  Most importantly, be sure to double check the calculation of your retail warranty reimbursement rate.

     For a low flat fee the LaBonte Law Group will prepare and submit your request for additional warranty parts reimbursement to the factory.  For more information on preparing your report or to schedule a date for the LaBonte Law Group to prepare your submission call us today at 516-280-8580.     
Should you have any questions or need advice on anything related to dealership operations please do not hesitate to give me a call at 516-280-8580 or send me an e-mail to slabonte@labontelawgroup.com.  Your questions will be answered promptly.
Sincerely,

Stevan H. LaBonte
LaBonte Law Group, PLLC
100 Ring Road West, Suite 108
Garden City, NY 11530

516.280.8580 (Phone) 
631.794.2434 (Fax) 

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