Military sheds commission pay for mechanics

The Obama administration announced Wednesday it will stop paying commission to the military's civilian auto mechanics, despite concerns that the move could ruin productivity.

The Office of Personnel Management (OPM) said the Department of Defense will move to a flat-rate payment system for auto mechanics, in an effort to keep pace with the private sector, which it says will help the military recruit and retain better mechanics.

 About 80 civilian auto mechanics employed by the military would be affected by the rule.

"The current commission pay plan for automotive mechanics is no longer the prevailing automotive industry pay practice," the agency wrote in the Federal Register. 

"Different from the commission pay practice, the proposed flat rate pay plan would not be linked to shop labor rates, but would instead take into account local prevailing rates, the mechanic's skill level, and the standard number of hours required to complete a particular job," the agecy added.

But critics say the move could also lead to a decline in productivity because mechanics who are paid commission have more incentive to work faster. The management of one auto repair shop told the agency such a rule would have a "significant negative effect on productivity."

"The reason local management believes the flat rate pay system would have a negative effect on productivity and profitability is because automotive mechanics paid under the current commission pay practice are paid more for taking on additional work, while pay under the proposed flat-rate pay system is the same regardless of how much work is done," the agency said.

The rule, which was originally proposed in June 2012, goes into effect immediately.