Until the passage of SB 899 Vocational
Rehabilitation provided a significant return-to-work benefit
to injured workers and played a primary role in the management
of workers’ compensation claims and the settlement
of those claims. Now, as the result of SB 899 a new role
for vocational rehabilitation in California’s workers’ compensation
system is emerging.
Much attention has recently been devoted
to the emerging role of vocational rehabilitation professionals
in the determination of diminished future
earning capacity (DFEC) per LC section 4660. The 12/7/06 WCAB en banc decision
in Costa v. Hardy Diagnostic and State
Compensation Insurance Fund (2006) concluded that the California Legislature intended
to allow rebuttal evidence regarding PD ratings and that
the effect of such evidence will be decided on a case by
case basis. The payment of fees for vocational rehabilitation
counselors or DFEC experts was affirmed by the WCAB
(en banc) on 11/13/07.
The Costa decision is of obvious importance and the role
of VR professionals in determination of DFEC will continue
to evolve as DFEC itself becomes better defined both administratively
and through case law. However, it is this author’s
belief that determination of DFEC is only one process that
VR professionals should be assisting in as part of the
California workers’ compensation system. SB 899 also
contains provisions dealing with the determination of return
to work options with the employer of record, and, where
that does not occur, a Supplemental Job Displacement Benefit
or “voucher”. As it is becoming increasingly
clear, both of these additional benefits are being underutilized
and both workers and employers are paying a significant
price for that. Involvement of VR professionals to facilitate
these processes makes sense and should be part of an expanded
role for VR professionals.
A comprehensive vocational rehabilitation
facilitates these three separate processes, i.e. return
to work, the voucher, and DFEC determination would provide
a very useful benefit to workers and employers and facilitate
equitable resolution of claims. These three separate but
closely linked processes will be briefly discussed and
the components of a relevant comprehensive vocational VR
evaluation will be discussed below.
SB 899 provides a significant financial incentive to employers
and workers to develop return to work plans. Employers
with 50 or fewer workers who make modifications to a workplace
to bring an employee injured on or after January 1, 2004
back to the job can be reimbursed for expenses as follows:
(1) $1,250 in expenses incurred
to allow a temporarily disabled employee to perform modified
or alternative work within physician-imposed temporary
work restrictions while recovering;
(2) $2,500 in expenses incurred
to bring a permanently disabled employee back to sustained
modified or alternative work within physician-imposed
permanent work restrictions.
In addition, employers with 50
or more workers who offer injured employees regular, modified
or alternative work will pay 15 percent lower weekly permanent
disability benefits once the offer is made. Conversely,
employers with 50 or more workers who don't make a return
to work offer will pay 15 percent more in weekly permanent
disability benefits. The return to work offer must be made
within 60 days of the permanently disabled worker being
determined permanent and stationary . The worker has 30
days to accept the offer.
It is no wonder that this incentive and benefit appears to
be underutilized. Many, if not most employers, are ill equipped
to effectively respond to this challenge, especially within
the tight time frames. Additionally, because this process
overlaps with the employer’s Fair Employment and Housing
and American’s with Disabilities Act reasonable accommodation
responsibilities, insurance carriers and claims administrators
have historically been reluctant to get too involved and
typically provided little support to the employer in the
return to work process. Many smart employers have, for some
time, been hiring independent third party VR providers to
facilitate the “interactive process”, as required
under AB 2222.
Per the EEOC, a four part process is required:
- analyze the essential functions
and purpose of the particular job at issue;
- consult with the employee
to determine the job-related limitations;
- consult with the employee
to identify potential accommodations and the effectiveness
of such accommodations in enabling the employee to perform
the essential functions of the position; and
- select and implement the
accommodation that is most appropriate for both the employee
and the employer, taking into consideration the employee’s
Clearly, it makes sense that
VR professionals be involved with this process and should
be the first step in conducting a comprehensive vocational
rehabilitation evaluation. This is nothing new. Under the “old” L.C.
section 139.5, vocational rehabilitation services were
mandated by statute to be delivered according to a “hierarchy”,
beginning with a determination of the worker’s ability
to return to their employer in modified or alternate work.
This was good practice then and it still makes sense.
Per SB 899, employees injured on or after Jan. 1, 2004,
who are permanently unable to do their usual job, and
whose employer does not offer other work, may qualify
for this benefit. This “voucher” helps pay
for educational retraining or skill enhancement, or both,
at state-approved or state-accredited schools. The law
(Labor Code section 4658.5) says that employees who do
not return to work for their employer within 60 days
of the end of temporary disability payments will receive
a voucher. The amount of the voucher is based on the
percentage of the injured worker's disability:
partial disability of less than 15 percent
partial disability between 15 and 25 percent
partial disability between 26 and 49 percent
partial disability between 50 and 99 percent
A comprehensive vocational rehabilitation
evaluation should include assistance to the injured worker
in mapping out how best to utilize this benefit. It is clear
that injured workers are being given little help in this regard,
especially with respect to how the funds could be integrated
with other educational, vocational, and rehabilitation services
that exist within their community. This is potentially very
wasteful and injured workers are at risk of getting little
value from this albeit limited benefit. For those permanently
disabled workers unable to return to work with their employers,
a comprehensive vocational rehabilitation evaluation would
greatly facilitate their understanding of their options and
how best to utilize the resources that exist in the community.
This makes a great deal of sense, given that the basics of
the evaluation that are needed for a worker to understand how
best to use their voucher are also needed to evaluate the impact
of their injuries on employability and earning capacity, as
is evolving in response to the DFEC issues.
Per SB 899, the new Schedule for Rating
Permanent Disabilities (California Division of Workers’ Compensation,
2005) was developed as required by Labor Code section
4660. The Schedule includes an adjustment for diminished
future earning capacity (DFEC) that is designed to
increase the permanent disability rating because of
diminished future earning capacity caused by the work
injury. The current DFEC adjustment factor varies from
10% to 40% according to injury category, with the lowest
adjustment factor being applied to hand, finger, and
vision injuries having the lowest adjustments and the
highest adjustment being applied to hearing and psychiatric
also mandated use of the A.M.A. Guides
to the Evaluation of Permanent Impairment, 5th Edition. As discussed
in the Guides, they cannot be used to make direct estimates
disability”, but are intended for more general use as
an estimate of “whole person impairment” and an “individual’s
overall ability to perform activities of daily living”.
The Guides do describe a process for determining functional
limitations or “work restrictions”, i.e.
what a worker can and cannot do and how activity might
aggravate the medical condition.
The A.M.A. Guides and the A.M.A.’s
Disability Evaluation, 2nd Edition identify the larger issues
surrounding determination of “disability” and “earning
capacity”. These factors are listed as follows:
- an individual’s
age, education, acquired skills, knowledge, and work performance;
individual’s motivation and adaptation to change;
- work environment;
of the job market;
- local economic conditions;
earnings and future potential earnings.
Thus, per the A.M.A.,
the role of the “Vocational Rehabilitationist” is
to “bridge the gap” between “work limitations” and “disability” as
reflected in diminished employability and earning capacity.
In order to form opinions regarding employability and diminished
earning capacity, the Vocational Rehabilitationist must
sequentially evaluate an individual in terms of what they
can offer a potential employer.
This article will not go into a detailed discussion of the
DFEC process. Readers can refer to this author’s
prior article on the SEDEC process.
However, the determination of DFEC requires a VR professional
who can carefully evaluate the residual impact of mental
and/or physical impairment upon an individual’s ability
to utilize their global skills and abilities and perform
specific occupations and work tasks then apply that information
to the relevant labor market to determine issues of earnings
capacity over the worklife of the individual. A comprehensive
vocational rehabilitation evaluation is required to do this.
adequately address the three above processes, the evaluation
must be comprehensive. So, what should be included in such
an evaluation? This is an important question as the evaluation
should be properly sequenced to address the range of issues,
focusing first on the return to work options, but with an
eye on the eventual need to address the more global employability
and earnings capacity issues.
Of course, some natural variability
will always exist due to unique individual factors such as
age, education, language skills, work history, job skills,
geographic location, and the nature & severity of the
impairment(s) and disability. For instance, testing does
not always need to be done, but should be accompanied by
explanation, i.e. no testing was done because of the age
of the individual.
The following steps would typically provide
the foundation for all three processes:
- Through medical opinion and/or
functional capacity testing, determine what functional
limitations exist for the individual (including pre-existing
impairments) that may impact employment capabilities;
- Conduct the interactive process
(see above) regarding return to work options, including
the consideration of job accommodation needs;
a comprehensive assessment of work skills and abilities
(using standardized occupational information) as they relate
to present and future employability;
- Conduct career,
vocational and/or educational testing to determine individual
skills and abilities as basis for job placement and/or
education/training, should a change of occupation be required;
- Determine employment and career
options, including short and longer-term goals/objectives;
- Assess job accommodation needs
relative to vocational goals and objectives;
eligibility for and feasibility of educational, vocational,
and rehabilitation services, including retraining and job
- Research the labor market relative
to goals and objectives to determine likelihood of job
placement and employment demands/conditions.
the availability and cost of future educational and/or
- Analyze standardized wage data
(including benefit data) as basis for estimating of prior
and future earning capacity.
- Determine impact of work
disability on past and future labor force participation
and worklife, using appropriate statistical data.
issues of the cost of such an evaluation and the choice
of the VR provider will always exist. It is this author’s
opinion that there is inherent efficiency in choosing an
Agreed Vocational Evaluator to provide the above services.
A list of credentialed AVEs already is maintained by the
Division of Workers’ Compensation and a subset of
persons on that list (and others that could be on
the list) are actively providing DFEC evaluations at present.
Both sides, in unusual cases, could still retain their
own expert to evaluate the DFEC issues, but this should
be the exception, rather than the rule.
Costs will vary
as each individual that is evaluated will be
different, i.e. is modified or alternative work available
and what services are provided to develop it? What are
the testing needs? Is there a viable DFEC issue present?
However, providers who provide a solid, independent evaluation
and can effectively integrate their services at reasonable
cost will eventually be the providers of choice.
In summary, due to changes in the California workers’ compensation
system, a new approach to the use of vocational rehabilitation
is now needed. Facilitating return to work while at the
same time evaluating the impact of work disability on alternative
employment options and earning capacity can be accomplished
through an integrated comprehensive vocational rehabilitation
Robert Hall, Ph.D.,
Certified Rehabilitation Counselor
Certified Disability Management Specialist
Fax (619) 463-9337
For a complete CV, click here.
Dr. Robert Hall has practiced
as a Vocational Rehabilitation consultant in California
since 1980. He has served as Director of the Work & Health
Technologies Center at San Diego State University and
as Adjunct Professor in SDSU’s graduate Rehabilitation
Counseling Program since 1993. Dr. Hall has conducted
extensive research and training activities in disability,
rehabilitation, and return-to-work programs. Dr. Hall
has consulted with and provided training to a variety
of health and human service organizations in the areas
of rehabilitation program development & evaluation.
He has consulted with several large employers and insurance
organizations regarding proactive compliance programs
with the employment provisions of the FEHA and ADA.
Dr. Hall has developed SEER software, an occupational
information and analysis system that utilizes the O*NET
database. Dr. Hall is also a principal in AtWork Resources,
Inc., a human resource management consulting software
and services company.