Lost Wages VS Loss of Earning Capacity PDF

Lost Wages VS Loss of Earning Capacity FARAHI LAW FIRM, APC BY JJ FLORES What is the Difference? LOST WAGES VS LOSS OF EARNING CAPACITY Lost Wages Income missed while unable to work due to injury. Includes regular wages or salary. Example: Gold's Gym trainer misses workdays due to injury, losing the...

Lost Wages VS Loss of Earning Capacity FARAHI LAW FIRM, APC BY JJ FLORES What is the Difference? LOST WAGES VS LOSS OF EARNING CAPACITY Lost Wages Income missed while unable to work due to injury. Includes regular wages or salary. Example: Gold's Gym trainer misses workdays due to injury, losing their usual pay. Loss of Earning Capacity Reduced future income potential due to injury Includes missed promotions, raises, and career advancement Example: Injury limits Gold's Gym trainer's performance, hindering adv ancement opportunities and potential salary increases. IMPORTANCE LOST WAGES VS LOSS OF EARNING CAPACITY Why do Lost Wages Matter? Economic Damages Compensation Illustrative of Financial Impact Tangible for Calculation Lost wages represent the immediate economic harm caused by an injury, preventing the injured person from maintaining their financial stability. Lost wages provide concrete evidence of the injury's financial impact, demonstrating how it disrupts the ability to earn income. This tangible loss is essential for calculating fair compensation, as it provides a measurable basis for attorneys and insurance companies during settlement negotiations. Why do Lost Wages Matter?  Evidence of Injury Severity: Demonstrates the immediate and significant disruption to the injured person's work life and finances.  Supporting Claims for Other Damages: Contributes to the overall picture of hardship, bolstering claims for medical expenses, pain and suffering, etc. Why does Loss of Earning Capacity Matter?  Long-term Consequences: Highlights the potential for future financial loss if the injury causes lasting disability.  Anticipated Future Losses: This loss can be projected using expert assessment, providing evidence for potential future damages. Why do BOTH Matter?  Lost Wages: Quantifiable Evidence of Immediate Financial Harm.  Loss of Earning Capacity: Addressing Future Income Disruption.  Combined Impact: Demonstrate Injury Severity & Guide Fair Compensation Together, these losses demonstrate the severity of the injury, its short- and long-term impact on the person's livelihood, and play a key role in calculating fair and comprehensive compensation, adding VALUE to cases. Words don’t mean anything! Unless we have proof…  Employment Records: Pay stubs, W-2s, contracts, etc. show pre-injury income vs. income loss after injury.  Medical Records: Injury treatment details link directly to inability to work.  Physician Statements: Experts confirm the extent of work limitations. Ways to prove it Documenting the immediate financial impact of your injury through clear employment and medical records. Ways to Prove it Tax Returns Employer Testimony Life Care Plans Objective evidence of past earnings demonstrates potential loss. Confirms changes in work performance and potential for diminished opportunities. For severe injuries, these project the cost of ongoing care which may hinder work ability. High-Earner VS Low Earner Does it Matter? LOST WAGES VS LOSS OF EARNING CAPACITY Cold Truth… Being a High-Earner Matters because:  Higher Economic Losses: High earners experience greater income loss when unable to work due to injury.  Loss of Earning Potential: Injuries can impact future career paths and income growth for high earners.  Complex Compensation: Calculating damages may require specialized expertise to address unique factors in high-earner cases. Additional Considerations Ensuring comprehensiv e compensation may require specialized assessment for highearner losses.  Valuation of Benefits: Loss of non-monetary benefits (e.g., insurance, retirement, etc.) adds to the financial impact.  Greater Need for Experts: Consultations with vocational or financial experts may be essential for accurate projections. The Role of Experts & Potential for Higher Stakes  Forensic accountants, economists, etc. can provide critical, specialized evidence for income analysis and projections.  Defendants may challenge the extent of losses, requiring a strong evidence-based case.  High-earner cases have the potential for greater settlements or verdicts, reflecting the scale of the losses. Is Your Client a High-Earner? LOW-EARNER  Individuals earning below the California median household income (2022: $91,905). HIGH-EARNER  Individuals earning significantly above the California median household income. The threshold for "high-earner" varies, but is often defined as several times the median income. U.S. Census Bureau. (2023). Household income: 2022 (Table BZA210221). QuickFacts: California. https://www.census.gov/quickfacts/fact/table/CA/BZA210221 Self Employed Clients LOST WAGES VS LOSS OF EARNING CAPACITY Ways to Prove it if Your Client is SelfEmployed  Proving loss of wages or earnings when you are self-employed can be more complex compared to individuals who receive regular paychecks from an employer.  However, there are several strategies you can use to demonstrate the financial impact of a bodily injury on your selfemployment income. Proving Self-employed Lost Wages Actions to Take Purpose Lost Wages 1. Gather Tax Returns (Schedule C) Official proof of income history 2. Provide Financial Records (income statements, invoices, etc.) Track the flow of work-related money 3. Show Bank Statements Confirm income was deposited Proving Self-employed Loss of Earning Capacity Actions to Take Purpose Loss of Earning Capacity 1. Share Client Contracts Demonstrate potential work and its value 2. Provide Correspondence (emails, letters) Show delays or cancellations directly caused by the injury 3. Show Appointment Records Prove the disruption in earning ability due to missed meetings or workdays 4. Cite Industry Standards Compare your earning potential to others in your field 5. Consult an Expert For complex projections of long-term impact The End