I Stand Corrected on my Ogilvie Analysis

Friday, April 17, 2009 | 0

By Michel LeClerc

Thanks to Kenneth Kingdon for pointing out an error in the Ogilvie analysis I did (posted on WorkCompCentral Feb. 21, 2009) in the case of Maria [below].  Here's what went wrong and how it should look.

In my example, Maria returned to a minimum wage job that, over a three-year period, would earn $49,920 compared to $51,105.60 of earnings by similarly situated employees. The difference is earnings loss of only $1,185.60.

Here's where I goofed: When I calculated Maria's proportional earnings loss, I incorrectly divided her post-injury earnings of $49,920 by the $51,105.60 earned by similarly-situated employees to come up with proportional earnings loss of .9768.

In fact, I should have divided her earnings loss of $1,185.60 by the $51,105.60 to come up with a proportional earnings loss of .023. This changes the outcome substantially.

After determining proportional earnings loss, Maria's standard rating of 13% is divided by the proportional earnings loss and results in a rating to loss ratio of 5.652. This is way beyond the range of ratios in Table A of page 1-7 of the 2005 Schedule, rebutting the Schedule per Ogilvie.

When the rating-to-loss ratio is plugged into the Ogilvie formula, it looks like this:

([1.81/5.652] x .1) +1 = 1.032

This multiplier results in no future earnings capacity (FEC) adjustment to Marias 13% standard rating (13% x 1.032 = 13.4).

Maria would be better off with the scheduled low back FEC modifier of 1.08 (FEC rank 5) that adjusted her 13% WPI to 17%.


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Michel LeClerc is a partner in the law firm of Hansen LeClerc LLP in Redding, Calif.  
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