A powertrain system including an internal combustion engine, a transmission and an electric machine is described, and includes the electric machine rotatably coupled to a crankshaft of the internal combustion engine. The transmission is coupled to a driveline to transfer tractive torque and braking torque thereto. A method for controlling the electric machine includes determining a short-term axle torque capacity, a long-term axle torque capacity and a maximum regenerative braking stall torque capacity, and determining an operator request for braking. A preferred regenerative braking capacity is determined based upon the short-term axle torque capacity, the long-term regenerative braking capacity, the engine stall regenerative braking capacity and the operator request for braking. Torque output from the electric machine is controlled based upon the preferred regenerative braking capacity.