How to Calculate Lost Earning Potential After an Injury

Published on February 21, 2020, by Matthew Sharp

Personal Injury

How to Calculate Lost Earning Potential After an Injury

Work-related injuries that result in time away from work, lost wages, and personal injury claims require accurate calculations of current and future lost income.

Loss of Earning Potential Following Injuries

Work-related injuries, especially in certain occupations, are not unusual, but some can have devasting consequences for a worker’s potential earnings and career path. Serious work injuries often result in temporary or permanent disabilities, vocational rehabilitation to develop new skills, permanent loss of a job, and complete career changes.

When a workplace injury occurs, an employee may be away from work while healing and recuperating. Depending on the severity of the injury, this may be several days, several months, or even several years. During this period, an injured worker can suffer numerous hardships including high medical bills, emotional distress, pain and suffering, and loss of normal income to cover living expenses. While existing lost income may be easy to calculate, calculating potential lost income is a bit more complicated without legal guidance and documented evidence.

If an injured worker files a personal injury claim or lawsuit with a personal injury attorney for future lost earnings, proof of injury and damages are essential. To negotiate a fair settlement or claim accurate damages, the injured worker (the plaintiff) must have accurate calculations that support the value of the claim. This requires documented evidence that shows proof of injury, job status,  employment history, medical history, and witness testimony. To arrive at a reasonable estimate of the plaintiff’s lost earning potential, these factors will be taken into consideration.

Plaintiff’s Age

If an injured worker is young at the time of his/her injury, a longer period of lost earning potential must be projected and calculated. Typically, an experienced financial expert is necessary to arrive at a reasonable figure.

Plaintiff’s Work History

Projection and calculations of a worker’s future earnings will be based on evidence of his/her past earnings, work history, and job performance records. Calculations will be based on employment history, base earnings, and benefits, bonuses, and commissions received.

Medical Records

Medical records showing proof of injury, diagnosis, medical treatments, and injury prognosis will have a significant impact on calculations for a worker’s lost earning potential, as well as any disability benefits paid for long-term injuries.

In injury cases that result in job loss, vocational rehabilitation, or career changes, calculating lost earning potential can only be compared to income received if the worker’s injury had not occurred.