A subject of great debate and much criticism, the new Permanent Disability Rating Schedule used RAND study results “to establish the ratio of average California standard ratings to proportional wage losses for each of 22 injury categories” (page 1-6, California Schedule for Rating Permanent Disability).
We now know this means that we no longer rate an impairment by adjusting up or down for age and occupation. While these adjustments for age and occupation are still part of the rating process, the WPI is first adjusted by giving “consideration to an employee’s diminished future earning capacity” (FEC). [See Labor Code Section 4660(a).] This language replaces LC Section 4660’s earlier instruction that we give “consideration… to the diminished ability… to compete in an open labor market.”
The FEC adjustment factors have been broken down into eight FEC Ranks. The higher the assigned FEC Rank, the greater the impact on a WPI rating. For example, once rated and a WPI has been assigned, injuries assigned an FEC Rank of 1 are adjusted by a factor of 1.1 (a 10% increase), whereas injuries assigned an FEC Rank of 8 are adjusted by a factor of 1.4 (a 40% increase).
Table B, found on p. 1-7 of the California Schedule for Rating Permanent Disability, provides numerous examples of FEC Ranks and the body parts to which they are assigned.
Do not use Table B when rating WPI adjustments!
Why? If you do, there is an excellent chance that you will arrive at the wrong rating! For example, per Table B, the spine (thoracic, lumbar, and cervical) always receives an FEC Rank of 5. This is incorrect.
Instead of using Table B, always locate the applicable FEC rank using pages 2-2 through 2-5 of the PDRS. The FEC Rank is just to the right of the Impairment #.
Returning to our example, if we determine the FEC Rank for a spinal injury, pages 2-3 through 2-4 demonstrate that the FEC Rank of 5 applies to the vast majority of spinal injuries (27 out of 31 such injuries receive a 5 FEC). However, several corticospinal tract injuries receive different FEC ranks. For example, bladder, anorectal and sexual impairments stemming from spinal injuries receive a 2 FEC Rank (representing 14% increase of the WPI), rather than a 5 (which increases a WPI by 27%). Thus, assuming the physician provided a 60% WPI for corticospinal impairment of the bladder, the incorrect application of a 5 FEC Rank would modify the WPI—before adjustment for age and occupation—well into a lifetime pension rate:
15.04.04.00 – 60 – 76
By contrast, the correct FEC Rank has a much less significant impact:
15.04.04.00 – 60 – 69
Bradford & Barthel recommends deleting Table B from your PDRS (or risk dramatically overrating Permanent Disability).
Donald R. Barthel is a founding partner of Bradford & Barthel, LLP.
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