Understanding Loss of Income and Loss of Earning Capacity
A LEGAL OVERVIEW OF WHAT LOSS OF INCOME AND LOSS OF EARNING CAPACITY MEANS AND HOW TO RECEIVE DAMAGES IN LOUISIANA
A person suffering from a severe injury may not be able to reenter the workforce for a long time period as they receive medical treatment to heal and regain physical strength. The severity of an injury may even impact a person’s ability to return to their profession or find suitable future work entirely due to life-altering limitations.
When a negligent individual or driver causes an injury, the victim has the right to collect non-economic damages (e.g., pain, suffering, and emotional distress) and economic damages from the negligent individual or their insurance company. Economic damages can be categorized as loss of income or loss of earning capacity.
Loss of Income versus Loss of Earning Capacity
The main distinction between the categories is that loss of income covers the time before the filing of the lawsuit, while loss of earning capacity covers the time after the lawsuit is filed.
Loss of Income
Loss of income is applicable when a person’s injury keeps them from working at their job for a specific time period. The awarded damages compensate the lost wages the victim would have earned if it wasn’t for the injury.
Typically, the amount is based on a person’s hourly rate or annual salary and other benefits, including overtime pay, tips, commissions, bonuses, and incentives. In some cases, a person may receive a settlement or a verdict before returning to work, so estimating an expected return to work date is imperative to obtaining fair compensation.
Loss of Earning Capacity
Loss of earning capacity is more complex, as determining a person’s future earnings can seem subjective. A medical expert’s testimony regarding injury severity, such as a traumatic brain injury (TBI), as well as physical limitations and a recovery timeline, is essential. Additionally, testimonies from an economist and vocational expert are crucial to proving damages.
Determining damages for loss of earning capacity is ultimately based on likely lifetime earnings without the permanent injury versus with the permanent injury. Factors include education, skills, work history, past wages, future bonuses and promotions, 401k matching, profit sharing, age, estimated recovery length, years until retirement, and pre-accident life expectancy.
Hiring a Louisiana Attorney for a Loss of Earning Capacity Claim
Navigating through the legal process is never easy, but it becomes exponentially more difficult when proving loss of income or loss of earning capacity. Hiring an experienced attorney will help prove a claim by gathering the necessary evidence, including tax returns, pay stubs, W-2s, 1099s, employer statements, medical history, and treatment reports.
The law firm of Welborn & Hargett provides victims with a clear assessment of what they deserve by hiring vocational rehabilitation counselors to assess loss of earning capacity to determine the best legal path to take.
The Welborn & Hargett team applies an appropriate strategy involving metrics to measure economic losses and provides necessary information through expert analysis to prove the plaintiff’s loss of earning capacity.
For more information, visit www.wandhlawfirm.com. The firm also answers phone calls 24/7 at 337-234-5533