Calif. Law Changes Dealer's Reimbursement Rate for Recalls

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Oct. 15, 2019—California Governor Gavin Newsom signed a bill into law that requires manufacturers in the state to pay dealers "equal to the franchisee's retail labor rate and retail parts rate" for recall work, per a report by CNET.

Before the new bill, the dealer might be paid as little as 60 percent less it would get paid for similar work from a customer.

According to the bill, AB-179, "existing law requires a franchisor to fairly compensate for labor and parts used to fulfill warranty obligations."



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