Lost Wages and Earning Capacity Damages in Personal Injury 2025

## Recovering Lost Wages After a Personal Injury

When injuries prevent you from working — even temporarily — you are entitled to recover those lost earnings as economic damages. Lost wages include all income you would have earned but for the injury: salary, hourly wages, overtime, bonuses, commissions, self-employment income, and the value of fringe benefits like employer health insurance contributions and 401(k) matching. Documenting these losses properly is essential — insurers routinely dispute wage loss claims without solid evidence.

For serious injuries keeping victims out of work for months or years, lost income damages frequently reach six figures — and lost earning capacity can be far larger.

Lost Earning Capacity: The Long-Term Picture

Lost earning capacity differs from lost wages — it represents the reduction in your ability to earn income over your entire remaining career. If a construction worker suffers a back injury that prevents returning to physical labor, the difference between the pre-injury career earnings trajectory and the post-injury earning potential is a recoverable damage. Forensic economists calculate this loss using age, education, career trajectory, injury severity, and labor market data to produce a present-value figure that accounts for decades of reduced earnings.

• Gather tax returns, W-2s, and pay stubs for the past 3-5 years to establish baseline earnings
• Obtain employer letters confirming missed workdays, lost bonuses, and denied promotions
• Retain a vocational expert to assess how the injury limits your occupational options
• Self-employed victims must document business revenue loss with accounting records and client testimony

Government Benefits and Liens on Lost Wage Recovery

If you collected disability benefits during your recovery, Social Security Disability Insurance (SSDI) or employer disability insurance may assert liens on your lost wage recovery. An attorney will negotiate these liens to protect your net recovery. Understanding the interplay between benefit programs and lawsuit proceeds is critical to maximizing what you ultimately receive.