Workers Compensation Back Wages v. Lost of Earnings Capacity Calculations

In injury cases, it is common for the lost back wages from workers compensation and the estimated back wages in a loss of earnings capacity analysis to differ. Sometimes by quite a bit.

In most states, workers compensation policies will pay the injured worker a set amount based on the average amount that the person earned at the time of the injury.

For example, in Texas the workers compensation amount is based on the injured person's average wages from their last or most recent 13 weeks of work prior to the injury accident.

In contrast, projections of back wages in lost of earnings capacity are designed to estimate how much the injured person could have been expected to earn had (s)he not been injured.

Lost of earnings capacity calculations are usually based on historical earnings information spanning the last 1 to 5 years. Depending on the variance in the wages associated with the person's job at the time of the injury, the difference between the amount workers compensation policy pays and the amount that the person could have been reasonably expected to earn could vary significantly.