New NYS Labor Time Warranty Law What Does This Mean For Dealers?

Executive summary

New York’s labor-time warranty law, signed September 4, 2024, gives dealers a route to seek manufacturer reimbursement for warranty and other covered repairs using a retail third-party labor-time guide, rather than relying solely on OEM labor times. The panel stressed that the law’s repeated use of “reasonable” leaves room for disputes—both over whether a guide is appropriate and whether the time claimed for an individual repair is reasonable.

The law is intended to bring warranty compensation closer to the time a dealer would be paid for comparable customer-pay work. Its practical value depends on dealers selecting and using a guide consistently, documenting work carefully, notifying OEMs, and tracking claims and payments.

What the law covers

• Applies to warranty repairs and extends the process to extended-warranty repairs, recalls, factory-compensated repairs, diagnostics, and certain voluntary stop-sale repairs.
• Allows dealers to use a third-party retail labor-time guide that is reasonably utilized by the dealership.
• Adds diagnostic time as a compensable component. If the selected guide does not include diagnostic time, the panel recommended tracking actual diagnostic time.
• Includes a provision intended to prevent an otherwise timely warranty claim from being denied solely because a part was unavailable and the vehicle was driven beyond the warranty’s time or mileage limit while awaiting that part.
• Took effect immediately on September 4, 2024.

The panel distinguished this law from the earlier warranty provisions governing labor rates and parts reimbursement. It described the labor-rate standard as compensation no lower than the dealer’s retail rate for like services, and said the new law also expands the covered work eligible for parts markup.

Dealer implementation playbook

• Choose a standard third-party guide. The panel cited guides such as ALLDATA, Chilton, and Mitchell as examples of commonly used sources. Pick one guide and apply it consistently; switching among guides to select the highest time for each repair could invite a reasonableness challenge.
• Put the guide into use before giving notice. The statute requires the guide to be “reasonably utilized.” Dealers already using a third-party guide for customer-pay work may be positioned to notify the OEM promptly. Dealers using an OEM guide plus a multiplier may need to implement a third-party guide first.
• Notify the OEM in writing. The panel said there is no formal enrollment or approval process, but recommended sending dated written notice identifying the selected guide and invoking the law. Ask the OEM for its claim-submission process. Review OEM forms with counsel to ensure they do not waive statutory rights.
• Track diagnostic time and repair details. Train technicians to punch in and out accurately for individual operations and to complete repair-order information thoroughly. If the guide lacks diagnostic time, retain records of actual time spent.
• Follow claims through to payment. Keep warranty receivables and claims organized by OEM or franchise as needed. Record whether claims are pending, rejected, delayed, or paid—and whether payment reflects the full requested amount.
• Prepare for closer audits. The panel warned that OEMs may scrutinize repair orders more closely. Use the change as a reason to reinforce documentation and process training across service teams.
• Coordinate technician communications. For unionized dealerships, compensation is a mandatory bargaining subject; involve the union rather than discussing compensation changes directly with technicians. For all stores, communicate clearly and retain records of covered work performed from the law’s effective date.

Areas of uncertainty and OEM responses

• The law does not resolve every case involving a repair absent from the selected guide. OEMs may direct dealers to use OEM times, but panelists said that approach may be contested. They advised against delaying claim submission while the issue is worked out.
• A dealer might argue that another third-party guide can fill a gap in its chosen guide, but the panel described this as an unsettled issue.
• Although the law became effective September 4, panelists advised dealers to give notice promptly. They cautioned that the practical ability to obtain reimbursement for earlier work may depend on timing and implementation; the panel did not offer a definitive resolution of retroactive claims.
• OEMs may challenge the reasonableness of the guide or a particular repair’s time. The panel characterized common, consistently used retail guides as more likely to withstand such challenges.
• Some manufacturers offered a multiplier as an alternative. The panel said this is a business decision, not the approach specified in the New York statute. Dealers considering one should confirm it can be revisited and watch for reductions to the underlying OEM hours.
• Panelists described Volkswagen’s request for 100 repair orders from the prior four months as an example of an OEM demand they believed went beyond the statute. They also cited Volvo’s 1.5 multiplier offer as an example of a manufacturer-specific approach, not a statutory requirement. These were discussed as examples of differing OEM responses, not universal industry rules.

Workforce and management implications

The law does not itself specify how much dealers must pay technicians. However, panelists said unions and technicians may expect compensation to reflect the additional reimbursement, potentially from the law’s effective date. Dealers should review applicable labor agreements, work with unions where relevant, and maintain records of warranty work so compensation questions can be addressed.

The panel also framed improved warranty reimbursement as a potential technician-retention and recruiting benefit, while warning that inconsistent treatment could create workforce or labor-relations problems.

Metrics, dates, and examples

• September 4, 2024: Law signed and effective.
• More than 500: Webinar attendees, according to the host.
• $75 to $175: New York dealer documentation-fee increase secured in 2021, cited as an example of the association’s advocacy work.
• 1.5 multiplier: Volvo approach described by the panel; not required by New York law.
• 100 repair orders / four months: Volkswagen documentation request discussed by the panel.
• 1.4 to 1.25: Hypothetical example used to illustrate how excluding a small number of high-time repairs could reduce an average multiplier; not an actual reported result.
• No specific adoption deadline or reimbursement target was stated. Panelists urged dealers to implement a guide and notify OEMs as soon as practicable.

Other dealership advocacy discussed

GNYADA also mentioned efforts on dealer fees and operations, including a possible inspection-fee adjustment, electronic lien releases, centralized vehicle registration for multi-store groups, and implementation of a 2023 credit-card surcharge law. It also discussed heavy-duty truck emissions rules, a broker bill awaiting gubernatorial action, and dealer participation in state and federal advocacy. These were separate policy updates rather than provisions of the labor-time law.

Presenters and sources

Presenters and panelists: Eddie Gillow (GNYADA COO); Mark (GNYADA moderator; surname unclear in the subtitles); Douglas Clark (Shenker Russo & Clark); Russ McRory and Kevin Timson (ArentFox Schiff); Frank O’Brien (Withum); and Jim McGrath (Bond, Schoeneck & King).

Other sources or organizations mentioned: Greater New York Automobile Dealers Association (GNYADA); UAW Local 259; United Service Workers Union Local 355; Rochester Dealers Association; Buffalo Niagara Frontier Dealers Association; and sponsor CLA, including Paul Charles, CPA.