Nevada law allows an injured person to get compensated for lost earning capacity due to an accident or injury. This is future income the victim is reasonably certain to lose after the date of any lawsuit or out-of-court settlement.
Lost earning capacity is typically awarded when the injury victim is unable to return to work for a sustained period of time. This type of damages is usually awarded in conjunction with “lost wages” in Nevada, which refers to income already lost as of the date of the lawsuit or settlement.
To help you better understand these concepts, in this article our Nevada personal injury lawyers discuss:
- 1. The difference between “lost wages” and “lost earning capacity” in Nevada?
- 2. How long must I be injured in order to qualify?
- 3. How is loss of earning capacity calculated?
- 4. How do I prove I lost my income?
Lost earning capacity represents the injured party’s loss of future earning capacity due to decreased work ability.
1. The difference between “lost wages” and “lost earning capacity” in Nevada?
In an accident or other personal injury case, Nevada law permits you to recover for both:
- Any actual earnings and work benefits you don’t receive between the date of your injury and your lawsuit or out-of-court settlement (Nevada “lost wages”), and
- The loss of income you are reasonably certain to experience in the future as a result of your injuries (“lost earning capacity”).1
Lost wages can be proven with a high degree of certainty. They are amounts you have actually and already lost due to missed work.
Lost earning capacity, on the other hand, is the amount you would have earned in the future but for someone else’s wrongful act. Since these amounts are speculative, it is harder to prove reduced earning capacity. But it can be done.
An experienced Las Vegas injury attorney can help you establish the certainty needed to recover damages for lost earning capacity.
2. How long must I be injured in order to qualify?
There is no set period of time you must be injured in order to claim lost earning capacity in Nevada.
However, damages for lost earning capacity are usually granted when injuries prohibit you from working for an extended period of time. Often, this period of time extends past the last date on which you can legally file a lawsuit. This period is known as Nevada’s “statute of limitations” or “limitations period.”
The statute of limitations “accrues” – that is, the clock begins ticking – when you discover (or in the exercise of reasonable prudence should have discovered) the injury.
In Nevada, most personal injury cases have a two-year statute of limitations.2 In some types of cases (such as medical malpractice in Nevada), however, the limitations period can be shorter or longer. 3
If you don’t file a suit within the applicable statute of limitations you will lose your right to sue for your injuries.
However, in the case of a serious injury, you may not be able to return to work before the statute of limitations is up. In other cases, even if you did return to work, you may have lost out on promotions and other opportunities for future advancement.
Nevada’s lost earning capacity law allows you to recover damages for this lost income and opportunities, as long as you can to establish such losses with reasonable certainty.
Having an experienced Las Vegas injury lawyer on your side can make a huge difference in assuring a favorable outcome.
Many factors go into calculating an accident victim’s lost earning capacity.
3. How is loss of earning capacity calculated?
Lost future earnings depend on a number of factors, including:
- How long your injuries are likely to last,
- Whether you can reasonably expect to return to your regular employment,
- Your age,
- Your life expectancy,
- Your worklife expectancy,
- Your health before the accident or injury,
- The number of working years before your likely retirement,
- Opportunities for promotion in your field,
- Typical raises you might have received,
- Your long-term employment goals,
- Whether your income was fixed or performance-based, and
- Anything else that might have affected your earning potential.
Your lost earning capacity is the difference between what you were reasonably certain to have earned if you hadn’t been injured, and what you probably will earn given your injuries.
4. How do I prove I lost my income?
If you have had the same job and employer for many years, establishing future lost earnings may be as simple as proving:
- Past income, plus
- Guaranteed or typical raises based on seniority, cost of living increases, or terms of a written contract.
Example: Joe is a 55-year old white, male electrician. He has been employed with the same company for the past 15 years. Joe suffered traumatic brain injury (TBI) in a car accident in Las Vegas. He is not expected to be able to work as an electrician again due to this permanent injury.
Before the accident Joe was basically healthy with no major impairments. White males live to be 75-years old on average in Clark County, Nevada. Joe reasonably expected, therefore, to be able to work until his scheduled retirement at age 67.
Joe’s salary at the time of the accident was $25/hour plus overtime and a small holiday bonus. His pay stubs and income tax returns for the three complete years prior to the accident showed an average gross income of approximately $50,000.
It is a simple matter to calculate $50,000 X 12 years = $600,000. Joe’s lost earning power, therefore, is $600,000 plus any increase he might reasonably have expected from raises.
However, lost earning capacity is not always so straightforward. Factors that can complicate the calculation include:
- The plaintiff is young,
- The plaintiff has an occupation or field of study with high earnings potential,
- The plaintiff’s income is based in part on discretionary bonuses or company performance,
- The plaintiff is self-employed and has an amount of income that varies, and/or
- The plaintiff’s injuries are long-term but not permanent or completely disabling.
Example: Katy is a third-year lawyer at a large national law firm with offices in Las Vegas. She is paid $200,000 / year plus discretionary bonuses. At the time of her injury she was actively seeking a partner-track job at a large firm in New York.
However, Katy gets into a motorcycle accident and suffers a serious spinal injury due to someone’s negligence at the Electric Daisy Carnival. As a result of the injury, she is in rehab for a year-and-a-half during which she cannot work. Now she can only work 15 hours a week, not enough to make partner. She also needs to stay in Las Vegas where her family lives.
Katy’s case is complicated because she might not have moved to New York or made partner or even kept practicing law. Her lawyer’s job will be to prove that it was reasonably certain she would have.
Ways your Nevada personal injury lawyer can prove your lost earning capacity might include (but are not limited to) testimony and documents from:
- Your employer.
Your employer can provide information about your earnings history, prior work evaluations, and the company’s history in promoting people with similar job duties and titles.
- Your friends and family
Your friends and family can testify about how your activities have changed since you were injured. They can paint a clear picture of what you were like before the accident and of what your life goals were.
- Your doctor.
Your doctor can provide test results and testimony regarding your health prior to the accident, your long-term prognosis, and how the accident has impacted your capabilities.
- A vocational rehabilitation expert.
A vocational rehabilitation expert can testify as to further treatment you will likely need in the future and how your injuries will affect your ability to work full- or part-time at your regular job.
- An expert economist.
An expert economist will introduce evidence of salary trends in your field of work. If you have a degree of higher learning, he or she can also show salaries for other graduates of your school and offer an expert opinion on what you would have earned had you not been injured.
An experienced Nevada personal injury lawyer will know what information is needed in your case and how to work with the expert and lay witnesses to establish the best case for getting you damages for lost earnings.
Legal references:
- Nev. J.I. 10.03; See also NRS 41A.007 [professional negligence] “‘Economic damages’ includes damages for medical treatment, care or custody, loss of earnings and loss of earning capacity.” See, e.g., Motor Coach Indus. v. Khiabani (2021) 493 P.3d 1007. See also Freeman v. Davidson (1989) 105 Nev. 13 (“Heirs’ damages, based on the decedent’s lost earning capacity, may include present as well as future loss of support“).
- NRS 11.190.
- See NRS 41A.097 (2) — statute of limitations in Nevada professional negligence cases.