Factors Relevant in the Assessment of Wage-Earning Capacity

The estimation of earning capacity in cases involving personal injury is important and often a complex task for the rehabilitation consultant.  The vocational expert’s role is to examine the relevant vocational factors to determine the individual’s pre-injury vs. post-injury capacity to perform jobs and earn wages.
Some of the factors that are relevant in estimating earning capacity include:

  1. Age: The age of the worker is important in determining how long the person will remain in the workforce as well as their wage-earning potential.

  2. Education and Training: The level of education or training of an individual in terms of their knowledge, skills, and abilities.

  3. Work Experience: Past work can be an indicator of potential or transferability of job skills.

  4. Disability and Functional Capacity: Disability is defined as the inability to perform substantial gainful activity due to an impairment. Functional capacity to work is relevant, both pre and post-injury.

  5. Worklife Expectancy: Helps to determine how many remaining years the worker has within the workforce.

  6. Employment Opportunities/Future Trends: This is relevant for making reliable estimates of future employment opportunities and earnings. An understanding of the labor market is critical with respect to estimating future earnings.

  7. Labor Market Surveys: Information regarding jobs in the relevant labor market area, generated by the U. S. Census Bureau as well as from contact with employers.

  8. Employability: Addresses the question of whether a worker is able to be employed within any given labor market, or whether jobs exist in the labor market.

If the individual is unable to return to work at their usual occupation, it is the vocational expert’s role to compare pre-injury earning capacity with the expected post-injury earning capacity.  In some cases, the loss of earning capacity is straightforward.  For example, consider a 55-year-old truck driver (working as a driver since the age of 19) who was injured in a motor vehicle accident resulting in the inability to work in any capacity. His loss of future earning capacity would likely be based on actual earnings at the time of the injury projected over his remaining work-life expectancy. 
Other cases may be less clear. For example, suppose the truck driver also had his 18-year-old nephew in the truck with him.  Assume the boy suffered extensive head injuries which rendered him incapable of gainful employment for the rest of his life.  Since he had very little work history, estimating a loss of earning capacity is more complicated and may be based on pre-injury vocational goals, age, and educational attainment.  Although this example may be an extreme case scenario, many cases do not fit neatly into categories.  A vocational expert can help tease out these complicated issues.

We offer complimentary consultations concerning "hypothetical matters".

To find out more about our methods or to discuss a potential case assignment, we offer complimentary consultations concerning "hypothetical matters." 

To strategize with one of our vocational experts or life care plan experts at Stokes & Associates please call David Barrett at 504-454-5009, visit our website, www.stokes-associates.com or email dbarrett@stokes-associates.com.

Larry S. Stokes, Ph.D.
Aaron Wolfson, Ph.D.
Lacy Sapp, Ph.D. 
Todd Capielano, M.Ed., LRC, CRC, LPC, CLC

David Barrett