Lost Wages vs. Lost Earning Capacity
Lost wages cover actual income missed because of an injury. Lost earning capacity covers a reduced ability to make money in the future, which can exist even if you return to work. Present income doesn’t always reflect permanent restrictions or ongoing loss of career opportunities.
When Can You Claim Lost Earning Capacity?
If your injury is likely to affect your ability to work or generate income in the future, you may claim for loss of future earning capacity. This means having to transition to less demanding employment, working fewer hours, missing out on potential promotions, leaving a physically demanding job, suffering from neurological or cognitive impairments, or being unable to work at all.
Can You Recover Lost Earning Capacity If You Are Still Working?
Yes. Returning to work does not disqualify your claim. Many people earn similar income temporarily but face long-term problems, such as decreased ability to do their old tasks, a loss of possible promotions, fewer hours, or a greater risk of losing future employment.
How Is Lost Earning Capacity Calculated?
Courts and experts review your wages before the injury, age, education, work experience, expected future career, years remaining in the work force, nature and permanency of the injury, and the ability to work after the accident. They also account for the loss of raises, promotions, bonuses, and benefits that you can no longer obtain because of your injury.
Future earning losses must be supported by enough evidence to allow a reasonable estimate and cannot be based solely on speculation.
What Evidence Can Prove Lost Earning Capacity?
Common evidence includes wage records, pay stubs, tax returns, employment history, testimony from prior employers or coworkers, opinions from physicians or vocational rehabilitation experts on work restrictions, and documentation showing failed reemployment efforts or missed advancement. Medical and vocational evidence showing permanent limitations often plays a critical role.
What If You Were Not Working When You Were Injured?
Not having a job at the time of injury does not prevent a lost earning capacity claim. Courts consider factors such as your education, work history, training, age, and plans for entering or re-entering the workforce. This means students, parents preparing to return to work, or people between jobs may still claim lost future earnings.
Can Children Recover for Lost Future Earning Capacity?
Yes. If a child has suffered a serious injury that affects their future potential to work, a claim for lost earning capacity may be brought. Evaluations take into account the child’s age, health, school performance, skills, and potential education and employment options. Expert testimony is typically used to assess what the child’s probable earnings would have been if they hadn’t been injured.
Lost earning capacity can be difficult to prove, especially when the financial impact may continue for years. If an injury has changed the kind of work you can do or how much you can earn, contact our office to discuss what those losses may mean for your claim.