What does "loss of earning capacity" refer to in workers' compensation?

"Loss of earning capacity" specifically refers to the diminished ability of an individual to earn income in the future as a result of a work-related injury. This concept is significant in workers' compensation cases because it addresses not only the immediate financial impacts of an injury but also its long-term effects on an individual's career and earning potential.

When someone sustains an injury that affects their ability to perform their job or limits potential employment opportunities, their earning capacity is inherently reduced. This can result from various factors, such as physical limitations due to the injury, the need for retraining in a different job, or even changes in the labor market influenced by the injury.

Understanding "loss of earning capacity" helps determine the appropriate benefits and compensation in workers' compensation cases, ensuring that affected individuals receive support that reflects their altered ability to generate income over time.