Claims Adjudication Tune-Up (CAT-U)
July 2025 Edition
Welcome to Self-Insurance’s (SI) Claims Adjudication Tune-Up (CAT-U) newsletter. This is where the Washington State Department of Labor & Industries (L&I) shares best practices and information, as well as highlight opportunities for improvement. The focus of this month’s edition of CAT-U is Loss of Earning Power (LEP).
Legal Corner
Revised Code of Washington (RCW) 51.32.090 Temporary total disability—Partial restoration of earning power—Return to available work—When employer continues wages—Limitations—Finding—Rules.
“(3)(a) … If and so long as the present earning power is only partially restored, the
payments shall:
(i) For claims for injuries that occurred before May 7, 1993, continue in the
proportion which the new earning power shall bear to the old; or
(ii) For claims for injuries occurring on or after May 7, 1993, equal 80 percent of
the actual difference between the worker's present wages and earning power at
the time of injury, but: (A) The total of these payments and the worker's present
wages may not exceed 150 percent of the average monthly wage in the state as
computed under RCW 51.08.018; (B) the payments may not exceed 100
percent of the entitlement as computed under subsection (1) of this section; and
(C) the payments may not be less than the worker would have received if (a)(i)
of this subsection had been applicable to the worker's claim.
(b) No compensation shall be payable under this subsection (3) unless the loss of
earning power shall exceed five percent.”
Board of Industrial Insurance Appeals (BIIA): In re Karl Bean (2006) (Summary)
“When a worker is not working, but demonstrates a requisite loss of earning power, the
worker may Be entitled to loss of earning power benefits. Benefits may not be denied
merely because the worker was not working for periods of time in which he seeks the
benefit.” In re Karl Bean, BIIA Dec., 04 19814 (2006)
What this means:
RCW 51.32.090 (3)(a) requires that loss of earning power payments continue so long as the worker’s earning power is lower than 95% of their date of injury earning power. This RCW has no provision for stopping LEP payments if a worker refuses a valid light-duty offer or is terminated for cause. So long as there is still a loss of earning power greater than 5%, the Karl Bean decision found that the worker remains eligible for LEP
payments even if they are not working. If the light duty is made permanent, the worker would continue to be eligible for LEP benefits until a closing order is issued (also known as reaching ‘legal fixity’).
The RCW describes two methods for determining the amount of LEP benefit payable to the worker. The method in (3)(a)(i) is ‘Method A’ on the LEP worksheet. It’s a comparison of the worker’s ‘new earning power’ and their ‘old earning power’. The method in (3)(a)(ii) is ‘Method B’, and calls for paying 80% of the difference between the wages the worker actually earned and their updated date of injury wages. When the worker is eligible for LEP benefits but is not working, the Karl Bean decision states that the worker must still
be paid LEP benefits, and that only Method A can be used to calculate them, since Method B requires actual current wages for the calculation, and Method B does not.
While the law and case are not new, L&I has revised its policy regarding eligibility for LEP to align more closely with them. This means that for any LEP payments after June 30, 2025, a worker who has rejected a valid light duty job offer or was terminated for cause would still be entitled to LEP based on the wage they would have earned at the light duty job.
News You Can Use
Valid Light-Duty Job: RCW 51.32.090(4)(b) gives the requirements that must be met for a temporary light-duty job offer to be considered ‘valid’. The employer may offer a light duty job that may or may not meet these criteria for validity; this is considered an ‘informal’ temporary light-duty job offer. If the worker declines a valid temporary light-duty job, the worker would not be eligible for time-loss benefits, but would be eligible for LEP benefits per the Karl Bean decision. If an informal temporary light duty job offer is declined, timeloss benefits would continue to be paid, as if no light duty were offered or available.
Worsening restrictions require a fresh look at time-loss or LEP entitlement. If a worker declined a valid light-duty job offer, they would be eligible for LEP but not time-loss. If those medical restrictions increase (become more restrictive) beyond the requirements of the declined job, the worker would be put back on timeloss
benefits, until a new valid light-duty job could be offered.
Calculating the Current Wage “Key Number” for LEP when the worker is entitled, but not working. The ‘Four Key Numbers’ section in the Claims Adjudication Guidelines (CAG) ‘Loss of Earning Power’ chapter explains the four key numbers needed to make the LEP calculation. For a worker that is eligible for LEP, but is not working during the LEP period, you won’t have a current paystub to use. Instead, you would need to calculate the worker’s ‘new earning power’ based on their light-duty contract. For example, a worker
released to light duty refuses a valid light-duty contract to work Monday through Thursday, four hours per day at $18 per hour. For an LEP period from May 25, 2025 through June 7, 2025, you would calculate:
8 working days in the period x 4 hours per day x $18.00 per hour = $576.00 in
Current Wages.
Trainer Trivia
On July 15, 1916, the Boeing Company was established in Washington. What was its original name?
Answer to be included in August CAT-U [Pacific Aero Products Company]
More reading/resources:
Self-Insurance Claim Adjudication Guidelines, LEP Chapter.
Loss of Earning Power (LEP) Calculator
Loss of Earning Power (LEP) Calculation Worksheet
Reminders/tips from the SI teams:
LEP training is coming Aug. 6! Check out the list of 2025 training opportunities
For more information, email: SITrainerQuestions@Lni.wa.gov
|
