Loss of Earnings/Diminished Earning Capacity

When you suffer an injury, it is likely that you will miss work time. This will cost you money, even if you use sick leave or personal leave to cushion the financial impact of your injury. If someone else caused your injury, you deserve compensation for your lost earnings as well as any other losses you might have suffered. If you anticipate future lost earnings as a consequence of your injury, especially if your loss is permanent, you deserve compensation for diminished earning capacity.

Personal Injury Damages: The Big Picture

Personal Injury Damages: The Big Picture

Lost earnings and diminished earning capacity are only two of many different components of compensation that you might demand if you suffer a personal injury. Additional components of personal injury damages include:

You might qualify for other damages as well, depending on the circumstances of your case.

Lost Earnings

If you work as an employee for a set wage or salary, you might qualify for the following components of compensation:

Normally, calculating lost earnings is fairly straightforward if you are an employee working for a set hourly wage or monthly salary. It can get a bit trickier if you are a salesperson working for commission. Nevertheless, you can still calculate your losses if you can come up with an average weekly commission and multiply that by the number of weeks you missed.

Freelancers and Entrepreneurs

Calculating lost earnings can get trickier if you operate your own business and your income is variable. You are still eligible for compensation, however. A lawyer can help you calculate your losses.

Sick Leave and Personal Leave

If you used up sick leave and personal leave while you were recuperating from your injury, you can claim these days as lost work time. The reason for this is that by taking leave, you are depleting your supply of leave that you might need in the future for some other reason.

Proving Lost Earnings

Lost earnings are not particularly difficult to prove in most cases. Some cases are different from others, however.

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 a 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, however, 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.

Diminished Earning Capacity

“Lost earnings” refers to income you have already lost. “Diminished earning capacity” refers to income you anticipate losing in the future because your injury prevents you from returning to your previous work duties. Because of its speculative nature, the amount of your diminished earning capacity can be quite difficult to prove. It is critical that you get it right, however.

Following are some of the ways you can prove diminished earning capacity:

  • Documentation of past income, just as if you were trying to prove lost earnings. The earnings you lost in the past are likely related to the earnings you will lose in the future. Include your tax return.
  • Testimony from a medical expert witness on how your injuries have affected your ability to perform your work duties.
  • Testimony from your boss concerning your work performance before and after your accident.
  • Testimony from a vocational rehabilitation expert on your prospects of returning to your previous position, and if not, what type of position (if any) you would be capable of performing in the future.

Remember, you don’t have to wait until trial to call an expert witness. You can file a lawsuit, present expert testimony at depositions, settle your claim, and withdraw your lawsuit before trial.

Contact a Las Vegas Personal Injury Law Firm Immediately

The sooner you get a Las Vegas personal injury law firm involved in your case, the better your chances for a favorable outcome. A favorable outcome doesn’t just mean “winning” your case. Technically, a $1 settlement constitutes a “victory.” How much money will you actually take home? This is the real measure of victory. Get in touch with an attorney at Battle Born Injury Lawyers by dialing (702) 570-9000