The Difference Between Lost Wages and Loss of Earning Capacity in Texas Personal Injury Claims

Woman counting money with a calculator

When you suffer injuries in an accident caused by someone else's negligence, the financial impact can be just as devastating as the physical pain. If your ability to work and earn an income is affected, you may be entitled to compensation. However, understanding the distinction between lost wages and loss of earning capacity is critical to ensuring you receive the full financial recovery you deserve.

At MAS Law, our experienced Texas personal injury attorneys are dedicated to helping injured individuals secure compensation for all economic losses related to their injuries. Here's a closer look at these two key types of financial damages.

What Are Lost Wages?

Lost wages refer to the income you were unable to earn due to your injury. This type of compensation applies when you miss work because of:

  • Hospitalization or recovery time
  • Doctor’s appointments
  • Physical therapy sessions
  • Other injury-related medical treatments

To claim lost wages, you'll typically need to provide documentation such as:

  • Pay stubs
  • Timesheets
  • Employer statements verifying the time missed from work

Lost wages are straightforward because they are calculated based on the earnings you would have received if not for the injury. This includes salary, hourly wages, tips, bonuses, or commissions.

What Is Loss of Earning Capacity?

Loss of earning capacity addresses a more long-term financial impact: how your injury affects your ability to earn a living in the future. Suppose your injuries are severe enough to prevent you from returning to your previous job or reduce your ability to perform specific tasks. You may be entitled to compensation for this diminished capacity in that circumstance.

Unlike lost wages, which are based on past income, loss of earning capacity is forward-looking and involves several factors, such as:

  • Age and life expectancy
  • Education and work experience
  • Severity of your injury and its impact on your ability to work
  • Future earning potential in your chosen field

Loss of earning capacity is typically calculated with the help of expert testimony from vocational rehabilitation specialists or economists, who assess how your injuries will affect your long-term career prospects.

What Are Some of the Key Differences?

Understanding the distinctions can help you better assess the compensation you may be entitled to. Here, we’ll break down the key differences in three critical areas: timeframe, proof required, and duration.

Timeframe

  • Lost wages focus on the past, covering the specific period you could not work due to your injury. For example, a construction worker unable to work for two months because of a broken leg would claim compensation for income lost during that time. This timeframe is limited to when the injury directly impacted your ability to work.
  • The timeframe for loss of earning capacity extends into the future, often covering the rest of your career. This applies when an injury permanently impacts your ability to earn at the same level, such as a concert pianist can no longer perform due to a hand injury. It evaluates what you could have earned without the injury, focusing on long-term financial effects.

Proof Required

  • Lost wages are more straightforward to prove because they rely on clear records like pay stubs, timesheets, and employer statements. For instance, an office worker who missed ten days due to an injury could provide pay slips and a letter from their employer to confirm their lost income.
  • Loss of earning capacity requires more complex proof. Because this aspect concerns the future and potential earnings over time, it often involves expert testimony and economic analysis.

Duration

  • While temporary, lost wages can cause significant financial strain, especially when an individual relies on consistent earnings to cover living expenses or support their family.
  • Loss of earning capacity has a lasting impact, as it involves a permanent or significant reduction in an individual’s ability to earn income. This can lead to career limitations, such as the inability to work in a specialized field or perform at a previous level of expertise.

Construction workers helping someone who was hurt on the job.

Why You Need Experienced Dallas Personal Injury Attorneys

Navigating the legal system to recover damages for lost wages and loss of earning capacity can be complex. Insurance companies often attempt to undervalue these claims, especially when calculating the long-term financial impact of a diminished earning capacity.

At MAS Law, we understand the intricacies of Texas personal injury law and the unique challenges faced by accident victims. Our car accident attorneys in Dallas will thoroughly evaluate your case, gather the necessary documentation and expert testimony, and fight to ensure you receive the maximum compensation you deserve.

Contact MAS Law Today

If you or a loved one has been injured in an accident in Texas and are dealing with financial hardships due to lost wages or reduced earning capacity, don’t face this journey alone. We’ll help you understand your rights and seek compensation to secure your financial future.

Contact the dedicated legal team at MAS Law for a free consultation.

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