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What Is Lost Compensation And Lost Earning Capacity?

What Is Lost Compensation And Lost Earning Capacity?
Christian J. Amendt

Sustaining an injury due to an auto collision or some other accident could keep you from going back to work for a while. Your time away from your job is time you are not spending earning money, which means you may have to make a claim for lost wages. You may have also heard about similar concepts like lost compensation and lost earning capacity.

Depending on the nature of your case, you will probably have to deal with additional concepts relating to your injury and your diminished ability to work. FindLaw explains what you should know about lost compensation and lost earning capacity.

Lost compensation

Since your paycheck is a form of compensation for your labor, you probably think the phrase “lost compensation” is the same as lost wages. The truth is that lost compensation is much broader. Your paycheck is a form of compensation, but so are other financial and work-related benefits. Your job may give you one or more of the following:

  • Tips
  • Bonus pay
  • Recognition pay
  • Vacation benefits
  • Non-cash benefits

Because of your accident, you may have lost out on some of these benefits. If so, you would have suffered lost compensation and not just lost wages.

Lost earning capacity

As part of discussions with your doctor or loved ones concerning your injury, the topic of lost earning capacity may have come up. This refers to limits of your capacity to do work because you got hurt. While you recover, you probably cannot go back to your job, but you may perform a less physically intensive job that earns less. Because of your injury, you earn less than you did before.

Since concepts such as lost compensation and lost earning capacity have a strong relation to lost wages, you may have to deal with them as part of your injury case. These concepts may paint a more complete picture of what you have lost due to your injuries and what you need as part of an injury claim.

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