New Act Bans Race and Sex from Lost Wage Calculations in Federal Lawsuits, Mandates New Labor Dept. Guidelines

The Fair Calculations in Civil Damages Act of 2025 is tackling a deep-seated issue in how courts determine how much money someone should get if they lose future earnings due to an injury or wrongful act. The core idea is simple but powerful: when a federal court calculates how much you would have earned in the future, they can no longer factor in your race, ethnicity, or sex.

This is a big deal because, historically, forensic economists often used demographic data that showed, for example, that women or certain minority groups tend to earn less over a lifetime. When calculating damages, this data effectively baked in societal bias, leading to lower payouts for those plaintiffs. This bill, found in SEC. 3, explicitly bans that practice in federal court, aiming to ensure that the calculation of your future earning potential is based on a level playing field, not on discriminatory averages. It’s about making sure the math doesn't punish you for being part of a “protected class” (SEC. 2).

The New Math: Federal Guidelines and State Pressure

This isn't just about telling courts what not to do; it requires the government to build a new system. The Secretary of Labor has 180 days to create brand-new guidelines for forensic economists. These guidelines will dictate how “future earnings tables”—the data sets used to project lost income—must be constructed. Crucially, these new tables must ignore race, ethnicity, gender, and sexual orientation (SEC. 4). Think of it as replacing the old, biased spreadsheets with new ones that only look at things like age, job type, and education, removing the demographic assumptions.

Furthermore, the Department of Labor and the Attorney General are tasked with creating guidance for states to clean up their own civil lawsuit calculations, or “tort proceedings.” This is a significant push to ensure that even state-level personal injury and wrongful death cases stop using biased math to determine compensation. For anyone involved in a serious injury case, this means the potential compensation should be calculated based on what they could have achieved, not what national averages for their demographic suggest they would have earned.

Watchdog Studies and Judicial Training

To back this up, the bill mandates a couple of deep-dive studies. The Judicial Conference of the United States has a year to study all damages awarded in federal personal injury cases, breaking the data down by case type (like discrimination vs. standard torts) and by protected class (SEC. 5). This will give Congress a clear picture of how much money is currently being awarded and to whom, highlighting any existing disparities.

Separately, the Administrative Office of the U.S. Courts must study how to calculate future earnings while considering things like age and disability—but without violating equal protection laws. This study, due within a year, will help judges and economists figure out the right way to estimate future income without resorting to the forbidden demographic factors. Finally, the Federal Judicial Center must train all federal judges on how to implement these new rules and properly use the new, unbiased earnings tables (SEC. 6). This is the necessary step to ensure the new policy actually sticks in the courtroom.

The Real-World Impact and the Fine Print

For an everyday person, this bill aims to ensure that if you are seriously injured or lose a loved one, the compensation you receive isn't artificially depressed just because of who you are. If you’re a woman or a person of color, the calculation of your lost wages will now assume the same earning potential as anyone else with your professional background and age.

However, the devil is always in the details. The success of this law hinges entirely on the new guidelines created by the Department of Labor. If those new “future earnings tables” are flawed, or if the methodology for determining the “average wage” (SEC. 2) is vague, it could introduce new, unintended consequences or biases. While the intent is to remove discrimination, any change to the damage calculation methodology is closely watched by the insurance and liability industries, as it directly impacts their potential payouts. This bill is a massive step toward equity in civil justice, but we'll need to watch closely as the Labor Department writes the new rulebook.