He get's paid 20% of the labor rate.
Labor rate for independent shops generally floats in $60-100/hr, around where I live. Book seems to take place in Seattle, so $80/hr seems like a reasonable guess (based on my shaky grasp of economies in states on the other side of the country), even with the boss "undercharging." That gets him $16/hr, which is above Seattle minimum wage, but does seem unusually low for a FT mechanic who's been with a shop for as many years particularly in a state with a $15 minimum wage, and the associated cost of living and economy that Seattle has.
I could be wrong, but I even with him admitting he isn't a highly paid mechanic, $16/hr seems too low. $18-20 seems more likely, which would put the shop hourly rate at $90-100/hr, which could actually be spot on.
Unless of course he's approximating, but "20% of the shop labor rate" just seems like a really odd way to calculate what employees are paid (though not necessarily an unreasonable quantification, shops do have a lot of overhead and inventory costs).
Independent shops don't generally go by book/flat rate, but anything's possible. However, my post title aside, I can't see how this would really translate into a misunderstanding of book rate. However, if they did use book rate and he got paid % of the shop labor rate, that seems to work more as a pay rate that can scale (so 20% currently) and in theory makes $16/hr more reasonable.
Also, yes, this is more interesting to me than the copious sex that's started occurring in the book. The writing is... earnest but not something that makes my motor run if you will.