Wage Earning Capacity of the Unemployed or Underemployed

Determining wage-earning capacity is a complex task for the rehabilitation consultant. Wage earning capacity references an individual’s ability to work and earn wages, pre-injury versus post-injury. Typically, when determining wage-earning capacity, the individual’s demonstrated earnings are used as a reference if the actual earnings fairly and appropriately represent the individual’s capacity to earn. This is not the case; however if the individual is unemployed or underemployed at the time of injury. The demonstrated wages, or lack thereof, may not appropriately represent the individual’s capacity to earn wages. Examples of this include the individual being previously incarcerated, a downturn in job availability (seen frequently in oilfield industries), or family obligations.
 
In these instances, it is the vocational rehabilitation consultant’s role to examine the individual’s vocational profile to accurately determine the individual’s capacity to earn wages. The vocational profile of the evaluee consists of age, education, training, work history, vocational test results, the severity of injury or disability, functional capacity, and work-life expectancy. Vocational consultants must also consider employment opportunities available, employment trends, labor market research, employability, and placeability of the individual.
 
For example, an offshore welder with a 15-year history of earning $130,000.00 per year is laid off due to a lack of available work. He has since found work as a small parts assembler earning approximately $35,000.00 per year. He was then involved in a motor vehicle collision and subsequently required a three-level lumbar fusion. His treating physicians have permanently limited him to a light physical demand level, which falls within his job at the time of injury as a small parts assembler. One may assume that there is no wage loss claim, as he can recapture his earnings at the time of injury. However, his true earning capacity is his demonstrated earnings as an offshore welder, which he can no longer do. At Stokes & Associates, we take great care to ensure a comprehensive and thorough vocational analysis when assessing an individual’s vocational outlook and wage-earning capacity.  
 
We offer complimentary consultations concerning "hypothetical matters." To strategize with one of our experts at Stokes & Associates, please call David Barrett at 504-454-5009 or email dbarrett@stokesassociates.com.
 

Larry S. Stokes, Ph.D.
Aaron Wolfson, Ph.D.
Lacy Sapp, Ph.D. 
Todd Capielano, M.Ed., LRC, CRC, LPC, CLC
Ashley Lastrapes, MHS, CRC, CCM, CLCP, LPC, LRC