Before we can answer this question, we need to determine exactly what is included under “lost wages.”
The court in Strauss v. Continental Airlines, Inc., 67 S.W.3d 428, 435 (Tex.App.-Houston [14th Dist.] 2002, no pet.), distinguished between “past lost earnings” and “loss of earning capacity,” both of which are under the umbrella of lost wages. In the court’s analysis, “past lost wages are the actual loss of income due to an inability to perform a specific job…”
On the other hand, the court explained, loss of earning capacity is not based on the actual earnings lost, but rather on the loss of capacity to earn money.
Past lost earnings are much easier to calculate than loss of earning capacity, since with loss of earning capacity we are forecasting what the future will bring as a result of the injury.
You can prove your past lost earnings with pay stubs, tax returns, bank deposits, or some other hard evidence that can substantiate the monetary loss.
Proving lost earning capacity is a bit more complex. You’ll need an expert, such as a vocational economist, to estimate your future earning potential based on your disability, occupation, skill level and other factors.
In addition, you will need to prove that your injuries are long-term or permanent to recover lost earning capacity damages.
Calculating Past Lost Earnings
To calculate your past lost earnings, add up the total amount of hours you missed from work as a result of the injuries.
This can include down-time where you experienced too much pain to work and time you took to receive medical treatment, including commuting. Include both the time where you were unpaid and the time where you were paid but used your sick or vacation time.
Next, multiply the total hours you missed by your hourly wage. If you were paid a reduced wage as a result of being put on light-duty, include the difference in pay, as well. You can also include any bonuses, commission, or tips that you may have received.
You’ll need to substantiate the reason for your missed time at work with something from your doctor ordering you to take time off. If you have your own business or are self-employed, you can also claim past lost earnings. In this case, you can provide tax returns, bank statements, or other financial statements that can show that your income has declined since the accident.
Lost Past Earnings Example:
Paula Plaintiff works as a salesperson at the local mall. She makes $15.00 an hour and receives 5% commission for her total monthly sales. She typically works 40 hours per week.
Paula averages about $10,000 per month in sales, on which her commission is based. Paula was hurt in a recent car accident caused by Dexter Defendant. Her doctor ordered that she take off two weeks from work to heal.
Based on these facts, Paul missed 80 hours of work, or lost $1,200 ($15.00 x 80) in hourly wages. She lost $250 in commission (5% x $10,000 x .5). Her total lost past earnings are $1,450.