Use of the Workers’ Compensation Earning Capacity (WCEC) Formula in Determining Future Earning Capacity in California

Vega, Enrique N., Eugene E. Van de Bittner, Maria I. Toyofuku, Susan K. Van de Bittner, and Arlene Mohebbi. 2008. “Use of the Workers’ Compensation Earning Capacity (WCEC) Formula in Determining Diminished Future Earning Capacity in California.”  The Earnings Analyst  10: 62-97.


California’s new workers’ compensation law changed the standard for determining permanent disability from diminished ability to compete for jobs in the open labor market to diminished future earning capacity. California adopted a new Schedule for Rating Permanent Disabilities (Schedule), (California Division of Workers’ Compensation, 2005), which provides an adjustment factor for diminished future earning capacity. Challenges to the adequacy and validity of the Schedule were soon brought by injured workers and their attorneys. Courts have ruled that since the Schedule is prima facie evidence regarding permanent disability ratings, it can be rebutted through evidence brought by the injured workers. Van de Bittner (2006) developed a Workers’ Compensation Earning Capacity (WCEC) Formula, which provides an estimate of diminished future earning capacity expressed as a percentage. This article expands on the application of the formula to individual cases, the foundational and often crucial assumptions that the DFEC expert needs to make when applying the formula, the methodology relied upon to meet evidentiary rules of admissibility, as well as its potential use in other legal arenas.


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