When personal injury affects your ability to work, the financial toll can last long after the medical bills are paid. In New York, compensation for loss of earning capacity helps bridge that gap—but how much can you actually claim?

What Is Loss of Earning Capacity?

Loss of earning capacity refers to the reduction in a person's ability to earn income in the future due to a long-term or permanent injury. Unlike lost wages, which cover time already missed from work, this category accounts for future limitations that could hinder promotions, career changes, or even continued employment in the same field.

Loss of Earning Capacity vs. Lost Wages

It’s important to distinguish between two related but separate types of compensation:

• Lost wages refer to income missed during recovery.
• Loss of earning capacity considers your diminished ability to earn over the course of your working life.

For example, a construction worker who suffers a spinal injury may return to work in a limited administrative role. Although they’re still earning, their capacity to perform higher-paying physical labor is gone.

Eligibility to Claim Loss of Earning Capacity in NY

Not every injury results in a viable claim for reduced earning potential. To qualify for this type of compensation in New York, a plaintiff must demonstrate:

• A permanent or long-lasting impairment
• A direct link between the injury and the reduced ability to work
• Reliable evidence of what the future earning potential would have been

In personal injury claims, these damages are typically pursued in cases involving severe physical or neurological trauma, including traumatic brain injuries, spinal cord damage, or amputations.

How Loss of Earning Capacity Is Calculated in New York

There’s no flat-rate formula, but several factors are considered by courts, insurance adjusters, or juries when estimating future losses.

Key Factors Used in the Calculation

• Age at the time of injury
• Occupation and skill level
• Pre-injury income and work history
• Projected career growth or promotions
• Educational background
• Extent and permanence of the injury

A younger person with a long career ahead may receive a larger award than someone nearing retirement, especially if they were in a high-growth field.

Use of Expert Testimony

Vocational experts, economists, and medical professionals often contribute to these evaluations. They may assess labor market trends, wage projections, and the individual’s ability to return to similar work.

Example Scenario

Suppose a 30-year-old union plumber earning $90,000 annually suffers a hand injury that prevents them from using tools. If they are only able to work in a supervisory role at $50,000 per year, a jury could calculate $40,000 per year in lost earning capacity. Multiplied over their remaining work life (say, 30 years), the potential claim might reach $1.2 million—before adjusting for inflation or present value.

What Evidence Supports a Claim?

New York courts require solid, well-documented evidence. These are some of the most common types used:

• Tax returns and W-2s showing historical income
• Statements from employers about job performance and trajectory
• Vocational evaluations showing reduced capabilities
• Medical records proving the injury and its long-term effects
• Labor statistics indicating likely career earnings

If the injury occurred while the person was unemployed or self-employed, documentation becomes even more important to show a likely earning path.

Challenges in Proving Future Losses

Since this damage category is speculative by nature, insurance companies often resist paying large sums without rigorous justification. They may argue:

• The injury doesn’t prevent all forms of work
• The injured party may adapt or retrain
• Projected future income is too uncertain

This is why legal guidance is essential. A skilled personal injury attorney will know how to build a persuasive case using expert witnesses and thorough documentation.

Does Comparative Fault Impact Compensation?

Yes. New York follows a pure comparative fault rule, which means your compensation is reduced by your percentage of fault in the accident. For instance, if you’re found 30% at fault and the total loss of earning capacity claim is $500,000, you’d receive $350,000.

Loss of Earning Capacity in Settlement Negotiations

Many personal injury cases settle before trial. Loss of earning potential is often a key negotiating point and can significantly influence settlement value. However, because it's based on long-term projections, insurers may undervalue it. Attorneys often bring in economists and experts early in the process to strengthen the claim before negotiation begins.

How Long Do I Have to File a Claim in NY?

In most personal injury cases in New York, you must file a lawsuit within three years from the date of the injury. However, shorter deadlines may apply for claims involving municipalities or government agencies. Failing to act within the statute of limitations can bar you from recovering damages altogether, including compensation for loss of earning capacity.

Tips to Strengthen Your Loss of Earning Capacity Claim

• Start documenting income losses and limitations immediately
• Follow through with all recommended medical care and therapy
• Avoid returning to work too soon if it risks worsening the injury
• Consult with a vocational or economic expert early
• Work with a qualified personal injury attorney in NY

Conclusion

Loss of earning capacity claims in New York require more than proof of injury—they demand a clear, evidence-based projection of future limitations. Whether through expert testimony or thorough financial records, the strength of your documentation can make a difference worth hundreds of thousands—or even millions—of dollars. If your injury has altered your long-term ability to earn, don’t settle for less than your future is worth.

Need Legal Help? Brandon J. Broderick, Attorney at Law is One Phone Call Away

Navigating New York personal injury claims can be challenging. Fortunately, you don't need to do it alone. The experienced lawyers at Brandon J. Broderick, Attorney at Law, are available 24/7 to help you understand your legal options, gather necessary evidence, and build a strong case to secure the settlement you deserve.

Contact us now for a free legal review.