How to Hire Technicians and Build a Pay Plan That Works

To hire good technicians, recruit year-round, test skills with a ride-along, and onboard with a 90-day plan. Pay them with a structure that rewards quality work, such as hourly plus performance pay, commission or flat rate, while following federal overtime rules: time and a half of the regular rate past 40 hours.

Ask any owner what limits growth and you'll hear the same answer: finding good techs and keeping them. The work is there. The people aren't. This guide covers the full cycle: what a tech really costs, where to find candidates, how to interview and test, how to onboard, which pay plan fits your shop, how overtime works with each plan, and how to avoid the W-2 vs. 1099 trap. Examples use illustrative numbers; plug in your own.

1. What does a technician really cost?

A technician costs their wage plus labor burden: employer payroll taxes, workers' comp, unemployment insurance, benefits and paid time off. In the BLS Employer Costs for Employee Compensation survey for June 2026, private construction employers paid $36.13 an hour in wages and $15.84 in benefits, about 44% of wages on top.

The federal share of payroll taxes alone is 6.2% Social Security and 1.45% Medicare on wages, plus federal unemployment tax of 6.0% on the first $7,000 per employee (usually 0.6% after the state credit). State unemployment and workers' comp vary by state and class code. Work out your own number with the labor burden calculator and the payroll cost calculator; labor burden, payroll taxes and workers' compensation explain each piece.

2. Where do you find good technicians?

Find technicians through referrals from your current team, trade schools and apprenticeship programs, supply houses, job boards, and by staying in touch with good techs at other shops. The best candidates aren't job hunting, so recruiting is a constant process, not an emergency when someone quits.

• Referral bonuses. Pay your team a bonus when a referred hire passes 90 days. Good techs know good techs.
• Trade schools and apprenticeships. Build relationships with instructors; offer ride-alongs to students. Growing your own often beats poaching.
• Supply house counters. Counter staff know who's good and who's unhappy where they are.
• Job posts that sell the job. Lead with pay range, schedule, truck take-home, on-call rotation, training and growth. Techs compare shops on these.
• Your reputation. Reviews from employees and customers both matter. Techs check your Google reviews too.
• Always-open application. Keep a short application on your website and respond within a day.

3. How do you interview and test a technician?

Interview technicians in three steps: a short phone screen for license, experience and pay expectations; an in-person interview about real calls they've handled; and a paid working test or ride-along where you see their skills and how they treat customers. Skills can be taught; attitude and honesty are hard to change.

1. 1

   Phone screen (15 minutes)

   Licenses and certifications, years in the trade, driving record, availability for on-call, pay expectations. Cut early if the basics don't match.

2. 2

   Behavioral interview

   "Tell me about a callback you caused and what you did." "Walk me through your last no-heat call." Listen for ownership, not excuses.

3. 3

   Hands-on test

   A bench test or a staged diagnostic: a bad capacitor, a miswired thermostat, a leaking fitting. Watch their process, not just the answer.

4. 4

   Paid ride-along

   Half a day with a senior tech, paid. Ask the senior tech how they talked to customers and handled the truck.

5. 5

   References and checks

   Call past supervisors, verify licenses with the state board, and run checks your state allows. See contractor license.

Don't skip the customer side. A tech who fixes everything but can't explain options in plain language will cost you sales and reviews. Many shops add a short role-play where the candidate explains a repair-or-replace choice to the owner playing the homeowner.

4. How should you onboard a new tech?

Onboard with a written 90-day plan: paperwork and safety on day one, ride-alongs the first weeks, solo calls on simple work once they've shown they're ready, and check-ins at 30, 60 and 90 days. Early turnover is expensive, and most of it comes from new hires who never knew what was expected.

Give new techs a stocked truck and a clear truck stock list, teach them how work orders and dispatching flow, and measure first-time fix rate and callback rate from day one so feedback is based on facts.

5. Which technician pay plan should you use?

Choose a pay plan that rewards the results you want while staying simple enough for techs to understand and for you to calculate correctly. Most trades shops use one of four structures: straight hourly, hourly plus performance pay, commission on sales, or flat-rate pay per task.

Whatever you choose, write the plan down, show how pay is calculated with an example, and decide upfront how you'll handle callbacks, training time, shop time and slow days. Plans that change without notice destroy trust faster than low pay. Labor burden and gross profit per hour help you test whether a plan still leaves the business a margin.

6. How does overtime work with each pay plan?

Under the FLSA, nonexempt employees must get at least one and a half times their regular rate of pay for hours worked over 40 in a workweek, and the DOL says hours can't be averaged across two or more weeks. The regular rate includes nearly all pay for the week, including commissions and most bonuses, not just the base hourly rate.

Regular rate = Total pay for the workweek (minus statutory exclusions) ÷ Total hours worked in the workweek

Two more rules trip up flat-rate and commission shops. First, every hour worked counts: shop time, meetings, required training and waiting for parts on the clock are all hours worked, so they enter the regular-rate math (DOL Fact Sheet #22 covers hours worked). Second, total pay for the week must equal at least the minimum wage for all hours worked. The federal minimum is $7.25 an hour, and many states and cities set higher minimums that you must follow. For on-call pay and callout minimums, see on-call rotation.

7. W-2 employee or 1099 contractor?

A technician who works your schedule, drives your truck, follows your methods and wears your shirt is almost certainly an employee, not a 1099 contractor. The IRS looks at behavioral control, financial control and the relationship; the DOL uses an economic reality test. Misclassification can bring back taxes, overtime claims and penalties.

Real subcontractors, such as a licensed electrician you hire for one job who runs their own business, can be 1099 workers. Collect a W-9 before paying them and track totals for 1099-NEC reporting. Read W-2 vs. 1099, 1099 for subcontractors and W-9 for subcontractors, and compare costs with the 1099 vs. W-2 calculator. The contractor taxes guide covers payroll tax obligations.

8. Pay plans by trade

Pay structure tends to follow how the trade sells its work. Service-heavy trades lean toward flat rate and commission; install and project trades lean toward hourly with crew bonuses. These are common patterns, not rules.

9. How do you keep good techs?

Keep good techs with fair, predictable pay, a clear path to earn more, good trucks and tools, a manageable on-call rotation, and respect. Most techs leave because of the boss, the schedule or feeling stuck, not just money. A tech who quits takes their training, your customers' trust and often a coworker with them.

• Career ladder. Apprentice → tech → senior tech → lead or trainer, with pay ranges for each step.
• Paid training. Certifications and manufacturer training make techs better and show you're investing in them.
• Fair dispatching. Rotate the good calls; don't stack one tech with all the callbacks. See dispatching.
• Good equipment. A reliable, organized truck saves time and frustration every day.
• Reasonable on-call. Pay for availability and callouts; share the rotation fairly.
• Recognition. Share good reviews that name the tech. Pay spiffs for them if you like.

Hiring and pay checklist

• Calculated the full burdened cost of a new tech.
• Confirmed you have enough calls to keep another tech busy.
• Job post with pay range, schedule, truck, on-call and training.
• Three-step interview with a paid hands-on test or ride-along.
• Licenses verified with the state board.
• Day-one paperwork: I-9, W-4, state forms, handbook, safety.
• Written 90-day onboarding plan with check-ins.
• Written pay plan with a worked example, callback policy and training-time policy.
• Overtime calculated on the regular rate, including commissions and nondiscretionary bonuses.
• Every hour worked is recorded, including shop time and travel between jobs.
• State minimum wage and overtime rules checked.
• Workers classified correctly as W-2 or 1099.

Common hiring and pay mistakes

• Hiring in a panic. The wrong tech costs more than an empty truck.
• Overtime on base rate only. Spiffs and commissions must be in the regular rate.
• Flat-rate with no overtime. Piece-rate pay doesn't remove the overtime requirement.
• Unpaid shop time. Meetings, loading the truck and required training are usually hours worked.
• 1099 techs who are really employees. The IRS, DOL and your state can all come calling.
• Changing the pay plan without notice. It reads as a pay cut even when it isn't.