You should never have to worry about your finances if you sustain an injury caused by the careless or negligent actions of another individual or business. However, when an injury occurs, this can lead to significant setbacks, including a loss of earnings from a job. Here, we want to discuss the differences between lost wages and a loss of earning capacity. Even though these two things sound similar, they are actually different when it comes to securing compensation for your losses after an injury.
Understanding Lost Wages After an Injury
After an individual sustains an injury, there is a good chance that they will have to undergo medical treatment. In some cases, this medical treatment is not too extensive, and an injury victim may not miss much, if any, work. However, for moderate to severe injuries, victims often have to take time away from work while they recover. When a person cannot work during the time frame from when the injury occurs to when they make a recovery, the income they lose out on will be considered lost wages.
When working to calculate lost wages, an injury victim and their attorney will use various types of documentation to show what they are missing out on during their time away from work. These documents will include:
- All recent pay stubs
- Tax returns
- Letters from an employer
- Bank statements
When an individual has recovered and returns to work, they will then be earning an income again and have no further lost wages.
Understanding Loss of Earning Capacity After an Injury
Unfortunately, there are times when injuries are so severe that they lead to some sort of disability. This is where a loss of earning capacity comes in. When an individual sustains a severe injury, their disabilities could affect their ability to return to work in the same capacity as before. In fact, an injury could prevent a person from working altogether.
When we discuss a loss of earning capacity, we want to look at two possibilities:
- A return to work in a diminished capacity. When a person sustains a disability after an injury, they may still be able to work. However, they may not be able to work in the same capacity as they were able to in their previous position. This could lead to a person having to take a lower-paying job or working fewer hours. In this situation, the loss of earning capacity will be the difference between their earnings at their job before they were injured and the earnings at the job they are able to take when they come back from an injury.
- Not being able to work at all. When an individual is no longer able to work because of an injury they sustained, their loss of earning capacity will be the entire income that they will no longer earn as a result of the injury. The loss of earning capacity will be calculated by looking at what the individual would have earned over their lifetime had they not been injured and if they were to work until the typical age of retirement.
Working With an Attorney
When an individual sustains an injury caused by the careless or negligent actions of someone else, they need to work with an attorney who can properly calculate their total losses. This includes any type of lost income they are expected to sustain, including income lost while a person is recovering and any future income losses caused by the injury.