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Loss of Earning Capacity


If an employee sustains an injury to the neck, torso, head, mind and is placed on permanent restrictions which prevent him or her from returning to his or her pre-injury employer at 85% of his or her former wages, he or she may have a claim for loss of earning capacity (LOEC). There is no LOEC claim if the employer makes a good faith job offer that is refused by the employee.

LOEC claims are presented by testimony from a vocational expert who compares an employee’s pre-injury earning capacity to an employee’s post-injury earning capacity. Vocational experts consider many factors when assessing LOEC. Such factors include, age, education, training, and work history.

LOEC is expressed as a percentage and is applied to 1,000 weeks. LOEC is paid at the permanent partial disability rate. (Example: 20% LOEC is 200 weeks paid at the statutory permanent partial disability rate which is a maximum of $322.00 per week for 2014). An employee is entitled to compensation for either the functional permanent partial disability rating or the LOEC rating, whichever is greater.

If a vocational expert believes that the injured worker cannot work based on the permanent restrictions given, an applicant may claim that he or she is permanently and totally disabled. If found to be permanently and totally disabled, the applicant is entitled to payment of 2/3 of his or her average weekly wage (up to the statutory maximum which is $892.00 per week for 2014) for the remainder of his or her life. However, receipt of other benefits such as social security disability, long term or short term disability, unemployment compensation and pension benefits may be used to offset the amount of compensation due from the worker’s compensation carrier.