Loss of Earnings/Diminished Earning Capacity

Proving Lost Earnings as an Employee With a Stable Income

As a regular employee, it’s not all that difficult to prove your lost earnings – provided that your employer cooperates with you. The most important evidence will probably be a letter from your employer on company letterhead that includes the following information:

• Your name,
• Your position,
• Your pay,
• The number of hours per week you normally work, and
• The amount of work time you missed due to the accident.

The letter does not need to specify whether you took sick leave or personal leave.

Proving Lost Earnings if Your Income Is Variable

Your income might be variable if you work on commission, if you are a freelancer, or if you are an entrepreneur. The basic principle is the same as calculating your lost income as an employee. You need to show how much work time you missed and how much money that missed work time was worth. The details of the calculation get tricky, however, when your income is variable.

Some of the documentation you can use to show how much money you were making before your accident might include invoices or bank statements, a calendar showing appointments you had to cancel, or emails showing which appointments you had to cancel. You can use these documents to calculate your average income, from which you can calculate your lost earnings.

Even this might not be enough if your income is seasonal or wildly fluctuating. As long as you can use valid documentation to prove your annual income, you can calculate an average and scale the average to the work time you missed due to your injury. Your income tax return can be very useful in this regard.