Gino DiCaro

DWC proposes changes to permanent disability rating schedule

By Gino DiCaro, VP, Communications

Capitol Update, May 15, 2008 Share this on FacebookTweet thisEmail this to a friend

On Friday, May 9th, the Division of Workers’ Compensation (DWC) released the much anticipated proposal for changes to the Permanent Disability Rating Schedule (PDRS). The new regulations will increase benefits for injured workers by an average of 16 percent.

The California Labor Code authorizes the Administrative Director of DWC to review all relevant data on permanent disability and base any schedule changes on these studies. For the last 18 months, DWC has been gathering data on return-to-work and wage loss.  A recent comprehensive study shows that return-to-work rates were up by five percent overall and that the current future earnings capacity (FEC) multiplier in the PDRS needs to be adjusted to reflect the empirical data on wage loss.  The study concludes that the current age adjustment should also be changed.

The proposal reflects these points by adjusting the FEC multiplier to reflect data on wages lost by workers with specific injury types, such as injuries to the spine, hands and knees. It increases the FEC range – the total spread of the numeric FEC formula – from the existing range of 1.1 to 1.4 to a new range of 1.2 to 1.5. In addition, injury types would be re-ranked within the range to correlate with wage loss. The proposal also changes age adjustment factors in the PDRS by deleting the decrease applied currently to workers below the age of 37 and by only providing an increase for those under age 21 and over age 52.

DWC Administrative Director Carrie Nevans stated "Workers’ compensation reforms require the disability rating schedule to be based on empirical data that ties wage loss to injury type.  We’ve been studying how those two factors intersect under the 2005 schedule and now have enough data and analysis to support this increase. We look forward to receiving input on this proposal."

The proposal is currently posted on the DWC web site at : http://www.dir.ca.gov/dwc/DWCWCABForum/PDRS.htm

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