Lost Wages vs Lost Earning Capacity: Two Different Claims in Georgia

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An injury can take income in two ways. It can keep a person off work while recovering, and it can leave a permanent impairment that reduces what the person is able to earn afterward. Georgia law measures the second loss, diminished earning capacity, by its own rules. In Michaels v. Kroger Co., 172 Ga. App. 280 (1984), the Court of Appeals called “diminished future earning capacity” a “term of art,” and it held that a claimant with an irregular work history had offered enough evidence for a jury to be charged on that loss.

Proving the Amount of Lost Earnings

Georgia compensates injury in money where the injury can be valued that way: damages are given as compensation, and compensation is the general measure where an injury can be estimated in money (OCGA 51-12-4). The claimant carries the proof. Michaels restated the general rule that a party suing for damages “has the burden of proof of showing the amount of loss in a manner in which the jury or the trial judge in nonjury cases can calculate the amount of the loss with a reasonable degree of certainty,” and that “[a]n allowance for damages cannot be based on guesswork” (quoting Lester v. S. J. Alexander, Inc., 127 Ga. App. 470).

In Michaels, the trial court kept out the plaintiff’s own testimony about the plaintiff’s 1979 modeling income, reasoning that the best evidence of earnings would be “the financial records or W-2 forms or income tax returns.” The Court of Appeals held that this was error. “An objection based on the best evidence rule is ineffective where the essential fact to be proved is neither the existence or content of a writing but the existence of an independent fact” (quoting Dorminey v. Harvill Machine, Inc., 141 Ga. App. 507), and in that case “[t]he fact in issue was the amount earned by plaintiff during the year 1979. The contents of a writing were not in issue.” The decision applied the rules of evidence in force in 1984.

Earning Capacity After a Permanent Injury

In the decisions Michaels describes, the earning-capacity claim rests on a permanent impairment. The court stated the standard its earlier decisions had applied: “where there is evidence to show plaintiff’s capacity to labor and earn money has been permanently impaired, and there was evidence of his earnings before the injury (not continuous employment), the nature and extent of his disability, a jury was authorized to award damages for diminution of earning capacity.”

For a plaintiff who “suffered permanent impairment of ability to work,” the court described two lines of decisions, divided by whether earnings can be proved:

  • No provable earnings history. “[I]f there was no prior history of earnings or they could not be proved with reasonable certainty, the diminished ‘ability to labor’ was compensable as an element of ‘pain and suffering,’ and the measure of damages was the enlightened conscience of the jury.”
  • A provable earnings history. “If there was a prior history of earnings and ‘permanent impairment of earning capacity’ damages were recoverable as a separate item where such diminution could be proved with reasonable certainty.”

The court quoted Hunt v. Williams, 104 Ga. App. 442, for recovery on both grounds: “[a]n injured plaintiff may recover for decreased capacity to labor as an element of pain and suffering, and also for decrease in earning capacity when there is evidence from which the jury can arrive at, estimate, or reasonably infer a pecuniary loss for the decrease in earning capacity.” It also quoted Jones v. Hutchins, 101 Ga. App. 141, on the evidence that supports an award: “Based on evidence of what the plaintiff was able to do before and after the injury, the nature and percentage of permanent impairment, and the value of the services before the injury, a jury may make an award as compensation for diminished earning capacity, whether or not the evidence establishes with any exactitude the lost future earnings.”

Michaels described “diminished future earning capacity” as “a term of art signifying that past earnings must be proved with such specificity that lost future earnings can be computed with reasonable certainty,” and it added that “[p]rior decisional authority requires only that there must be evidence from which the jury can estimate, or reasonably infer the loss or decrease in earning capacity.”

Irregular and Intermittent Work

The work history in Michaels was varied. The plaintiff had worked as a file clerk for four years, earning $94 per week at the end of that job, sold Avon products for $50 to $400 per month, and averaged $100 per week at a health food store. In the first seven months of 1979 the plaintiff worked as a model in 10 different jobs of two to three days each, at $35 to $100 per day, and had bought an airline ticket to New York and made appointments there “to pursue a career related to her prior modeling.” Photographs documented the plaintiff’s appearance before and after the injury, and one of the plaintiff’s expert witnesses testified to being unwilling to hire the plaintiff as a model because of the plaintiff’s present appearance.

The court held that “[t]his evidence was sufficient to raise the issue of and authorize a charge on the subject of decreased earning capacity.” The reasonable-certainty rule, it explained, “does not mean that only a plaintiff who works on an everyday basis and on the date of the injury can prove a diminished earning capacity. … Nor does the rule mean that one who works intermittently cannot recover for diminished earning capacity, i.e., an artist, sculptor, professional athlete, author, actor, dancer, singer, musician, or even a lawyer.” The court acknowledged that “[g]enerally all future earnings or diminished future earnings are uncertain and difficult of ascertainment,” but held that “this does not mean that a plaintiff should be denied a recovery.”

Putting the Claim in Issue Before Trial

The plaintiff in Michaels first answered the pretrial order by seeking no lost wages, past or future. The trial court later allowed an amendment in which the plaintiff claimed “a temporary total disability and a permanent partial disability as a result of this incident” and “diminished future earning capacity for said permanent disability.” The Court of Appeals held that the pretrial order controls the later course of the action (citing what is now OCGA 9-11-16(b)), that the amendment placed the defendant on notice, and that it enlarged the pleadings “to include the issue of diminished earning capacity and all that the term includes, i.e., prior earnings, percentage of diminished capacity, and lost future earnings.” Evidence on those points “was not relevant under the original pretrial order but was admissible under the amended pretrial order.”

Reduction to Present Value

Jones v. Hutchins, as quoted in Michaels, stated that “where there is evidence from which the pecuniary value of the loss may be estimated this should be reduced to its present cash value.” The Code now addresses the reduction: the trier of fact may reduce future lost wages and other future economic damages to present value at a discount rate of 5 percent or any other rate it finds appropriate (OCGA 51-12-13(a)), and the section does not open the door to evidence of what a specific private investment product, such as an annuity, would cost (OCGA 51-12-13(b)).

Frequently Asked Questions

What about a child who has never held a job?
Michaels explained that “[a]n infant seldom had any history of earnings,” and that for a plaintiff with no prior earnings whose capacity to labor was permanently impaired, “[l]egal fiction was resorted to” so that the impairment “can be classed with pain and suffering” (quoting Atlanta St. R. Co. v. Jacobs, 88 Ga. 647). Michaels traces the no-earnings line of decisions described above to that fiction.

Can a spouse recover the injured person’s lost wages through a loss of consortium claim?
No. The Court of Appeals has explained that a loss-of-consortium claim does not include the injured spouse’s lost wages, medical expenses, or loss of earning capacity (Branton v. Draper Corp., 185 Ga. App. 820 (1988)).

Does a lost-wage claim have its own filing deadline?
It follows the personal injury claim. In Brent v. Hin, 561 S.E.2d 212 (Ga. Ct. App. 2002), the Court of Appeals read Branton as concluding “that medical expenses, lost wages, and loss of earning capacity constituted damages for personal injuries subject to a two-year limitation period,” the period set by OCGA 9-3-33.

Does Georgia’s medical malpractice damages cap limit lost wages?
The cap statute applies to noneconomic damages, and for purposes of that section it defines the term to exclude past or future “[w]ages or earnings capacity” and “[i]ncome” (OCGA 51-13-1(a)(4)). In Clark v. Leigh, 324 Ga. 733 (2026), the Supreme Court of Georgia noted that “[a]ny economic damages included in the wrongful death award would not be aggregated or limited under the statute.” The same decision reaffirmed Atlanta Oculoplastic Surgery, P.C. v. Nestlehutt, 286 Ga. 731 (2010), which held that the cap statute violated the right to trial by jury as applied to the noneconomic damages in that case.

  • OCGA 51-12-4; OCGA 51-12-13(a), (b)
  • Michaels v. Kroger Co., 172 Ga. App. 280 (1984), quoting Lester v. S. J. Alexander, Inc., 127 Ga. App. 470; Dorminey v. Harvill Machine, Inc., 141 Ga. App. 507; Hunt v. Williams, 104 Ga. App. 442; Jones v. Hutchins, 101 Ga. App. 141; Atlanta St. R. Co. v. Jacobs, 88 Ga. 647; OCGA 9-11-16(b) (as cited in Michaels)
  • Brent v. Hin, 561 S.E.2d 212 (Ga. Ct. App. 2002); Branton v. Draper Corp., 185 Ga. App. 820 (1988); OCGA 9-3-33
  • OCGA 51-13-1(a)(4); Clark v. Leigh, 324 Ga. 733 (2026); Atlanta Oculoplastic Surgery, P.C. v. Nestlehutt, 286 Ga. 731 (2010)

Disclaimer

This article provides general information about how Georgia decisions and statutes treat lost wages and diminished earning capacity. It is not legal advice and does not create an attorney-client relationship. The proof and valuation of income losses depend on the facts of each case and on current Georgia law, and the principal decision described here dates from 1984. Anyone with a particular situation should consult a licensed Georgia attorney.

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