What Is Lost Earning Capacity

Lost earning capacity on workers' compensation is a type of financial benefit injured workers may receive. It serves to compensate workers for their inability to earn as much as they did or could have before the accident. When it comes to determining workers’ compensation benefits, no two situations are alike. For every employee and every injury, a unique set of circumstances shapes the landscape of what the benefits and the future will look like. Compensation is determined by a combination of many of these different factors. Some are concrete and can be easily calculated, such as medical bills and lost past wages. Others, however, are less clear and can be left to the discretion of the court or adjusted in negotiation with insurance companies. One important element in these cases is lost earning capacity. Workers’ compensation law in Iowa recognizes that a work injury may affect the employee’s ability to earn income going forward, and lost earning capacity attempts to address that loss.

Lost Earning Capacity on Workers' Compensation

Lost earning capacity, sometimes called future loss of earning or impairment of earning power, refers to the fact that an injured employee may not be able to earn the income he or she might have if not for the injury. It attempts to address how an injury will impact a person’s ability to earn income in the future and how a person’s career would have proceeded without the injury. For example, if a police officer is struck by a car on the job and suffers a shoulder injury that prevents him or her from performing his or her duties now and in the future, his or her employment future is changed. He or she may not be able to advance as he or she would have without the burden of the injury, or he or she may not even be able to continue to work as a police officer at all. Determining lost earning capacity can be a complicated process because it's difficult to predict the future. Simply multiplying wages may not provide a clear picture of what could be lost, as many people experience improvements in talent and skill that can lead to promotions and pay raises over the years.

Factors That Affect Lost Earning Capacity in Iowa Workers’ Compensation Cases

In an attempt to best address lost earning capacity as fairly as possible, the parties consider a variety of factors. These can include:
  • Medical condition before the injury.
  • Medical condition immediately after the injury.
  • Current medical condition.
  • The part of the body injured.
  • Length of recovery.
  • Work experience.
  • Intellectual, emotional, and physical capacity to learn to perform other work.
  • Earnings before and after the injury.
  • Age.
  • Education.
  • Motivation.
  • Functional impairment related to the injury.
  • Loss of ability to do your old job.
  • Loss of earnings because of the injury.
Many of these factors will require support from corroborating documents or the testimony of an expert witness. An experienced workers’ compensation lawyer can help an injured worker gather the appropriate medical records, employment and education history, financial papers, and more. In addition, a skilled attorney knows what expert witnesses are appropriate and can find them, interview them, and make sure their testimony is heard to support the claim.

Lost Earning Capacity Can Play an Important Role in Your Future

If you’ve suffered a serious injury on the job, and you will not be able to make a full recovery, the future can seem uncertain. In these cases, it is important that the courts or insurance adjusters understand the full impact the injury will have on you and your family going forward. Lost earning capacity is intended to ensure that injured employees can maintain a safe and secure future. Unfortunately, it is common for insurance companies to dispute many aspects of a case in an attempt to save money. Lost earning capacity can be a gray area, and an experienced workers’ compensation attorney can help protect your interests and help you obtain the compensation you deserve. If you or someone you love has suffered a work-related injury, an experienced workers' compensation lawyer at the Pothitakis Law Firm may be able to help. Call our Iowa legal team today at 866-753-4692 to schedule a free, no-obligation consultation at one of our two convenient locations.