A serious accident can pull you out of work for weeks, months, or even permanently. When your paycheck stops but the bills keep coming, Illinois law lets you seek compensation for lost income and for the long-term harm to your career.
These two ideas—loss of earnings and diminished earning capacity—sound alike, but they cover different kinds of financial damage. Knowing the difference helps you understand what your claim is really worth and why choosing an experienced Illinois personal injury lawyer is so important.
What Counts as “Loss of Earnings”?
Loss of earnings, also called lost wages, refers to the income you have already missed between the date of the injury and the date of settlement or trial. It is a backward-looking number. Courts and insurance companies look at your pay stubs, W-2 forms, and bank records to add up the hours or days you could not work.
Overtime pay, tips, bonuses, and accrued paid time off all belong in this total because they are part of your regular earnings pattern. Illinois law also allows recovery for the value of sick leave or vacation days you had to use, so every bit of past income is counted.
This focus on what has already happened makes the loss of earnings a concrete figure that ends when you return to work or your case reaches its final judgment.
Defining “Diminished Earning Capacity”
Diminished earning capacity looks forward, not back. It measures how your injury will limit your ability to earn money over the rest of your working life.
If you can still work but only part-time, in a lower-paying job, or with strict physical limits, your potential lifetime earnings drop. Even a young worker with a modest salary today can lose hundreds of thousands of dollars in future income if a disability blocks promotions or forces an early retirement.
Illinois courts ask economic and vocational experts to project wages, inflation, raises, and work expectancy, then subtract what you are still able to earn. That difference is your diminished earning capacity. Because it covers the future, this number is often larger—and harder to calculate—than simple lost wages.
Why These Damages Matter in Illinois
Illinois follows the “make-whole” rule, which states that an injury victim should be fully compensated for every dollar lost due to someone else’s negligence.
Lost income and earning power are economic damages the jury can add to medical bills, property loss, and other out-of-pocket costs. Without these categories, a settlement might pay hospital expenses, leaving the family struggling to cover rent or tuition.
In Chicago or any other Illinois city, the cost of living climbs fast, so even a short break in income can push a household into debt. Seeking full recovery for both past and future earnings keeps long-term financial health in view.
How Illinois Calculates Lost Earnings
To set past wage loss, lawyers begin with the simple math of hours missed times the hourly rate. For salaried workers, they divide the annual salary by 52 weeks and multiply by the exact weeks out of work. Past pay stubs and employer statements can prove overtime averages and tip records.
Courts also include lost employment benefits. Health insurance premiums that the company typically covers, matching 401(k) contributions, and even tuition assistance count because they have clear monetary value. The final figure represents what you actually would have taken home if the accident had never happened.
Proving Diminished Earning Capacity
Future earning loss needs expert evidence. Medical specialists must confirm that the injury causes permanent limitations. Vocational rehabilitation experts study your education, skills, and the Illinois job market to decide what jobs remain open to you.
Then an economist projects lifetime wages for both your pre-injury career path and your post-injury options. The gap between those two numbers is the diminished earning capacity.
Courts may reduce that figure to present value so the award reflects a lump-sum payment today. The process is detailed, and insurance companies often fight it, which is why thorough documentation and credible experts are critical.
Common Injuries That Harm Earnings
Some injuries are more likely to slash income in the long term.
Traumatic brain injuries can impair memory and decision-making, limiting office or professional work. Severe back or spinal cord injuries restrict lifting, standing, and even sitting, which undercuts both physical and many desk jobs.
Loss of a limb changes every task, from driving to computer use. Chronic pain disorders make full-time schedules impossible for some victims.
Each of these conditions can force a worker in Illinois to accept part-time hours, move to a lighter-duty role, or exit the workforce entirely, leading to steep earning losses.
Contact Our Chicago Personal Injury Lawyers for a Free Consultation
Loss of earnings covers the paychecks you already missed, while diminished earning capacity protects the career you worked hard to build. Both play a key role in Illinois personal injury claims because they safeguard your financial life far beyond medical bills.
By gathering the right records, working with trusted experts, and partnering with an experienced Chicago personal injury attorney at Powell and Pisman Injury Lawyers, you can pursue full compensation and secure the income you need for the years ahead. Contact us today at (312) 635-5400.