Proving Diminished Earning Capacity After a Serious Injury in Kentucky

When an injury means you can’t return to your old job—or you can work, but only in a lower-paid role—the law lets you claim diminished earning capacity. That’s different from short-term “lost wages.” It’s about the permanent change to your ability to earn over time.

This guide explains: what diminished earning capacity is, how it’s proven with voc-rehab experts, labor-market & wage data, and transferable-skills analysis, and how Morrin Law Office builds these cases in Kentucky.

Quick definitions (plain English)

• Lost wages (past): Paychecks you missed while you healed.

• Future lost wages: Pay you’ll miss during continued recovery.

• Diminished earning capacity (long-tail): Your reduced ability to earn in the future because you can’t safely do your old work, can’t work full-time, or lost access to overtime/shift differentials/promotion paths.

Courts treat this as a separate head of damages from simple “time off work.” (Kentucky case law also recognizes future-impact damages proven with competent evidence, e.g., medical and economic proof.)

The 5 building blocks of a winning KY diminished-capacity claim

1. Medical foundation
   • Treating-physician opinions on permanent restrictions (lift/carry, reach, stand/sit tolerance, travel, exposure limits) and prognosis.

   • Where helpful: Functional Capacity Evaluation (FCE) to translate symptoms into task tolerances (e.g., “occasional 20 lbs; frequent 10 lbs”).

   • Clear link between injury → restrictions → work tasks you can’t do anymore.

2. Vocational-rehabilitation (voc-rehab) analysis
   • A qualified vocational expert evaluates your work history, education, skills, interests, and restrictions and then applies accepted methods under KRE 702 (Kentucky’s reliability rule for expert testimony). 

   • Kentucky follows a Daubert-style reliability screen for expert opinions; the foundation must be reliable methods applied to reliable facts. 

3. Transferable-skills mapping
   • Using O*NET (Dept. of Labor’s occupational database) to identify what parts of your skill set transfer to safer jobs at different exertional levels.

   • The expert shows how your pre-injury job (e.g., commercial roofer) becomes medically unsuitable, and which lower-impact jobs your skills reasonably support—often at lower pay.

4. Labor-market & wage data
   • BLS OEWS wage tables for Kentucky (not national averages) to price both your old job and realistic post-injury jobs. 

   • Where relevant, sub-state wages from KYSTATS or metro-area OEWS tables to match your local market. 

5. Economic modeling
   • An economist converts the delta (old wage path → new wage path) into lifetime loss, accounting for work-life expectancy and discounting to present value. (Kentucky workers’ comp regs even publish life-expectancy tools—useful for methodological context.)

What proof looks like (by worker type)

W-2 / hourly / salaried

• Before vs. after: 12-month pay stubs, W-2s, overtime logs, bonus/shift differential history.

• Medical: permanent restrictions; FCE.

• Voc-rehab: O*NET task profile for your old job; realistic alternative jobs that fit restrictions; why light-duty is not comparable pay. 

• Wage data: Kentucky OEWS for the old occupation vs. new options; show the pay gap. 

Self-employed / 1099 / gig

• Financials: tax returns (Schedule C/K-1), P&Ls, invoices, bank statements; proof of seasonality and variable costs so losses are net, not gross.

• Operations change: canceled contracts, reduced route/workload, inability to travel/lift/stand.

• Voc-rehab: skills that don’t transfer without physical tasks you can’t do; alternatives at lower earnings.

• Economics: net-income model with locally indexed wages (OEWS + KYSTATS).

Skilled trades / heavy labor

• Task-level mismatch: FCE shows you can’t meet essential job demands (e.g., climbing, overhead reach, repetitive kneel/crouch).

• Transferability: O*NET shows few equivalent-pay roles that avoid those demands → larger capacity loss. 

The expert workflow we use (step-by-step)

1. Records sweep: medical, work history, payroll, tax returns.

2. Voc-rehab interview + testing: education, licenses, certifications, work samples, career interests.

3. Transferable-skills analysis with O*NET (and, where appropriate, DOT/SOC crosswalks) to identify feasible occupations. 

4. Wage anchoring: Kentucky OEWS and local KYSTATS data for both the pre-injury and post-injury job sets. 

5. Economic model: lifetime delta with work-life horizon and discount rate; sensitivity tests for promotion/tenure paths you lost. 

6. Reliability check: make sure the expert’s methods satisfy KRE 702 / Daubert-style reliability (data sufficiency, reliable methods, reliable application). 

FAQs

Is diminished earning capacity the same as “can’t work at all”?

No. Even if you can work some, you can claim the difference between your old earnings path and your new, medically-limited path.

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Do I need a vocational expert?

In meaningful cases, yes. Kentucky courts require reliable expert foundations under KRE 702; voc-rehab opinions and labor-market data make the claim credible.

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What data sets are used to price wages?

We prioritize Kentucky-specific wages via BLS OEWS and KYSTATS—not just national averages. 

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How do we prove skills won’t transfer?

We use O*NET to map your prior job’s tasks/skills to alternative jobs and show why your restrictions block comparable-pay roles. 

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How Morrin Law Office proves these cases (so you don’t have to)

• We coordinate the right experts: treating physicians, voc-rehab, and economics.

• We gather the right data: O*NET profiles, Kentucky OEWS/KYSTATS wages, employer documentation, and FCEs. 

• We build a simple story: charts that compare your old job’s wage path to your new reality—backed by reliable methods that satisfy KRE 702. 

• We protect your claim: we also handle PIP wage-loss setup for short-term cash flow and pursue tort damages for the long-term loss.

• No upfront fees: free consultation; contingency fee (we’re paid only if we recover).

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Client checklist (download-ready)

Bring (or upload) these:

• Pay stubs (12 months), W-2/1099s, most recent tax return (with schedules).

• Employer letter: job title/duties, wage/OT/bonuses, missed time, light-duty options (if any).

• For self-employed/gig: invoices, P&Ls, bank statements, client emails showing canceled work.

• Medical restrictions: physician letters and any FCE.

• Resume/work history: licenses/certs; prior training.

• Calendar: days missed, reduced hours.

References & Further Reading

Expert standards

• KRE 702 (Testimony by experts)—Kentucky’s reliability rule (sufficient facts, reliable methods, reliable application). Legislative Research Commission

• Mitchell v. Commonwealth (Ky. 1995) (adopting Daubert-style analysis in Kentucky; reliability gatekeeping; abuse-of-discretion review). Justia Law

Damages / future impact context

• Davis v. Graviss, 672 S.W.2d 928 (Ky. 1984) (future-impact damages may be proven with competent evidence). Justia Law

• Kentucky Pattern Jury Instructions—Civil (Palmore & Cetrulo) (current edition includes damages instructions; use your firm’s subscription). support.lexisnexis.com

Labor-market & wage data (use for Kentucky anchoring)

• BLS OEWS—Kentucky state wages (May 2023). bls.gov

• OEWS program overview & tables (how the data is produced; tables & tools). bls.gov

• KYSTATS—Occupational Employment & Wages (state & local). KYSTATS

Transferable-skills & occupational profiles

• O*NET OnLine (task/skill requirements; 900+ occupations). O*NET OnLine

O*NET (ETA/DOL) program info & data documentation (for methodology citations). DOL+2O*NET Resource Center