EFFECTIVE July 1: Loss of Earning Power Paid Until Legal Fixity

Washington State Department of Labor & Industries sent this bulletin at 06/26/2025 10:23 AM PDT

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washington state department of labor and industries - claims and insurance

Self-Insurance

EFFECTIVE July 1: Loss of Earning Power Paid Until Legal Fixity

As of July 1, Loss of Earning Power (LEP) payments will continue until a claim has reached legal fixity.

Legal Fixity:

Legal fixity occurs when an order is issued closing the claim. Prior to that, the worker may be found medically fixed and stable, a condition also known as medical fixity. In the following situations, the worker’s LEP eligibility may continue beyond medical fixity, or until legal fixity is reached.

When to continue LEP payments:

  • If a worker declined a valid light-duty job offer.
  • If a worker is terminated for cause while working a valid light-duty job.
  • If a worker is found employable via transferrable skills, or retraining plan completion, and the loss of earning power is greater than five percent.

Under these situations, LEP payments would continue even though the worker is not working.

When to discontinue LEP payments:

  • If the worker is released to full duty.
  • If the worker is found employable and LEP is less than five percent.
  • If the claim reaches legal fixity.

Calculating LEP:

To calculate LEP, we need to determine the worker’s current wages, even if the worker is not currently working.

If a worker declined a valid-light duty job or was terminated for cause while working a valid light duty job:

  • Calculate the worker’s current wages based on what they would have earned if they were working the valid light-duty job.

If the worker is found employable via transferable skills, or retraining plan completion:

  • Calculate the worker’s current wages using the labor market survey in the vocational closing report.

Loss of earning power entitlement would be calculated using Method A, as Method A is calculated by comparing the new earning power to the old.

Method B cannot be used to determine LEP entitlement as Method B is based on the actual difference between present wages and earning power at the time of injury. Without present wages, Method B doesn’t apply.

Watch out for the July edition of the Claims Adjudication Tune-Up (CAT-U) newsletter, which will cover this topic in greater detail. This topic will also be part of the Self-Insurance 2025 training on Aug. 6.

For questions and more information, email: SITrainerQuestions@lni.wa.gov