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Labor market survey and divorce

Wage Loss vs Earning Capacity

When a worker is injured, there are many different areas that are examined to determine the impact an injury has had on an individual’s ability to work. Some of the time, what is being explored with regards to compensation for an injured worker can be a very complicated process. One of the more important things to consider in a worker’s compensation case is that of lost earning capacity. 

What does it mean to have a lost earning capacity versus a loss of income?

A loss of income in a worker’s compensation case involves the loss of income for a period of time when an individual is recovering from their injury. This could mean loss of wages for a few weeks or months’ worth of work, or even potential lost commission on sales, depending on the job in question. It can be determined in a very concrete way based on the actual wages or commission that had already been lost due to the worker recovering from their injury.

While a loss of income involves a current loss of wages, the concept of a lost earning capacity is a little more involved. Earning capacity goes further than that, and explores the loss of future missed income that the individual has not earned at this time. This can include the impairment of future earning ability due to the injury that has occurred as well as the loss of future earnings that the worker could have potentially received, if not for their injury.

How is lost earning capacity determined?

Determining lost earning capacity may involve a vocational assessment being conducted. During this process, the worker’s skills, talents, abilities, and work experience would be explored, as these factors have a direct impact on the work that would be available. After the information had been gathered, the current wage rates would be used to assist in determining the amount of income that could have been lost in the future. This amount will be based on the worker’s region, as different areas have different wage ranges and standards of living.

Why is it important?

To have a complete view of the vocational impact of an injury on a worker, both the future earnings as well as the current earnings should be explored. This will help to ensure that the full effect of an injury on an individual’s ability to work is examined. Not doing so could risk that the future concerns from an injury may be overlooked. 

At Vocational Expert Services, Inc, we offer vocational evaluations in divorce cases. These vocational evaluations are conducted by credentialed and experienced consultants. Vocational Expert Services, Inc. can provide services both in-person and online.