A serious injury can affect more than just physical health. It can also lead to financial instability. If an accident prevents a victim from working, they might get compensation for lost wages and reduced earning ability. These damages include immediate lost income and ongoing financial struggles. They arise from not being able to return to work fully.
Understanding how damages are calculated is important. Knowing your legal options can help you get fair compensation after an injury.
What Is the Difference Between Lost Earnings and Diminished Earning Capacity?
There are some important differences between lost earnings and diminished earning capacity.
Lost Earnings
Lost earnings refer to wages or a salary a victim has already missed due to an injury. If someone can’t work for days, weeks, or months after an accident, they might get back the income they would have earned.
These damages can also include:
- Lost bonuses and commissions that would have been earned if the victim had remained employed
- Sick leave or paid time off (PTO) that was used due to injury-related absences
- Self-employment losses, including lost business opportunities
In Pennsylvania personal injury claims, it is often easier to prove lost earnings than to show reduced earning potential.
Diminished Earning Capacity
Diminished earning capacity refers to the reduction in a person’s ability to earn income in the future. Even if a victim can return to work, they may be unable to perform the same job, work the same hours, or earn as much as they did before the accident. This type of loss matters most for people with permanent injuries or disabilities. These conditions stop them from going back to their old jobs.
How Is Loss of Earnings Calculated?
Lost earnings are usually figured from the victim’s salary or hourly wage before the injury. The court also considers how many workdays the victim missed. Pay stubs, tax returns, and employer statements can all serve as evidence to establish these damages.
Courts and insurance companies may also consider:
- The number of hours or shifts missed due to medical treatment and recovery
- Work schedule disruptions caused by doctor’s appointments, physical therapy, or rehabilitation
- The extent to which an injury affects overtime pay, tips, or performance-based incentives
If the person was self-employed, they might need business records, invoices, and profit-and-loss statements to show income loss.
How Is Diminished Earning Capacity Determined?
Diminished earning capacity is harder to calculate. It requires predicting future losses. Courts look at several factors when determining how much a person’s ability to earn has been impacted, including:
- The severity and permanence of the injury
- The victim’s age and career trajectory before the accident
- The type of work the person performed before the injury
- The likelihood of retraining or finding alternative employment
- Testimony from medical experts, vocational specialists, and economists
In many cases, expert witnesses are brought in to provide detailed projections about how much income a victim is likely to lose over time. A vocational expert looks at the skills the victim can still use. An economic expert estimates how much earning capacity will drop over the years or even decades.
Does Pennsylvania Law Limit Compensation for Lost Earnings?
Pennsylvania uses a modified comparative fault rule. This means an injured person might get less if they share fault for the accident. If the victim is determined to be more than 50% responsible, they may be barred from recovering damages entirely. This applies to all personal injury claims, including claims for lost earnings and reduced earning capacity.
Also, Pennsylvania does not have a cap on economic damages. This means victims can recover any amount for lost income and earning potential. Proving these damages requires credible evidence and skilled legal assistance. This way, all financial harm can be fully recognized.
Statute of Limitations for Filing a Lawsuit in Pennsylvania
In Pennsylvania, personal injury victims usually have two years from the accident date to file a personal injury lawsuit for lost earnings or lower earning capacity. Failing to take legal action within this timeframe could result in losing the right to seek compensation.
In some situations, exceptions may apply. For example, if the injury was not immediately apparent, the statute of limitations may be extended based on the discovery rule. Speaking with an attorney as soon as possible can help ensure that all legal deadlines are met.
Contact Our Philadelphia Personal Injury Lawyers for a Free Consultation
If you’ve been injured and it affects your work, you may be entitled to compensation for lost wages and future earnings. Zavodnick & Lasky Personal Injury Lawyers is committed to helping accident victims pursue the financial recovery they deserve. Contact our Philadelphia personal injury lawyers at (215) 875-7030 for a free consultation.
