Lost Wages Vs. Loss Of Earning Capacity
It is common for people to assume that a personal injury case only covers the paychecks that you missed. However, there are actually two separate categories: the actual wages that you lost after being injured, as well as the capacity you lost to earn more. Essentially, lost wages are what you legitimately missed after being injured, while loss of earning capacity is focused on the future and how the injury will affect how you work. As a personal injury lawyer can explain, the difference between these two categories is extremely important.
What Lost Wages Cover
Lost wages are exactly what they sound like: the money you missed out on when you were unable to work due to the injuries you sustained. These are concrete items that can be proven with pay stubs, tax returns, and a letter from your employer. This can even include missed overtime, used-up sick or vacation days, or lost bonuses and commissions. All of that to say, it is not just your base salary that these will cover.
What Loss Of Earning Capacity Means
This focuses on the reduced ability to earn money in the future because the injuries you sustained have far-reaching consequences. You do not have to be currently unemployed to claim this. You may be able to return to work, but are not able to do the same job, during the same hours, at the same capacity you used to. For example, you may have previously had a job where you lifted heavy boxes. If you sustained a back injury, then you may no longer be able to lift those boxes. Your job provides you with hours, but you are unable to fulfill them due to your back pain. This is where loss of earning capacity would come into play, as our friends at Cohen & Cohen can share.
How Each Category Is Proven
Proving each of these is done in a very different way. Lost wages are straightforward. As mentioned above, all it takes to prove this category is a paper trail: pay stubs, employer letters, etc. However, loss of earning capacity is a bit harder to prove, as it involves future potential income rather than income that was actually missed. This often relies on testimony from professionals who can reasonably estimate the funds you were unable to gain. Age, occupation, skills, and the severity of your injury are all factored in to determine this number. Because of all this, loss of earning capacity is often left out of a quick settlement, as it takes time to compile this data.
Why The Difference Matters To Your Claim
If your case only focuses on lost wages alone, that can greatly undervalue your serious injury. Earning capacity can often be the much larger number in your case, and if you choose to take a settlement too soon, this can undercut the value you truly deserve. This is particularly true if you have a permanent or career-altering injury. It is best to contact an attorney as soon as possible who can protect the value of your case and help you understand these two categories of income.
