Flat-rate pay

The plan is simple and the law around it is not. Two federal provisions get cited whenever "flat rate technician laws" is searched, and they say different things.

The mechanic exemption, 29 U.S.C. § 213(b)(10)(A). The overtime section does not apply to "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers". The overtime exemption for a mechanic in 29 U.S.C. 213(b)(10)(A) requires employment by an establishment primarily engaged in selling vehicles to ultimate purchasers, which describes a dealership and not an independent repair shop.

The retail or service commission exemption, 29 U.S.C. § 207(i). An employer of a retail or service establishment does not violate the overtime rule for an employee whose regular rate exceeds one and one-half times the minimum wage and more than half of whose compensation over a representative period of at least a month comes from commissions on goods or services. Whether a flat-rate plan is a commission plan for this purpose, and whether the shop is a retail or service establishment, are questions the statute's text does not settle on its own, and state law adds its own rules.

None of that is legal advice. What the shop's records have to do is the same under any answer: the flagged hours per technician per pay period, the clock hours beside them, and the rate, so the plan can be checked by anyone who needs to check it. Technician efficiency is the ratio of the two.