Determining lost wages
When someone gets injured due to someone else’s negligence, they assume that they are entitled to receive compensations for the medical bills. And they are right. However, that’s not the only damage available to you.
Sometimes, injuries will prevent you from working so naturally, you can pursue that your lost income be compensated as well. You will be able to get more information from your personal injury lawyer. He/she will provide more details on how to determine lost wages and what is the reasonable amount you should expect in a fair settlement. But before you speak to a personal injury lawyer, here are some tips on how you can calculate the approximate lost wages.
The calculation process starts with you collecting documents that will serve as proof to your claim and support the claim that your injuries are preventing you from working. The most common documents include:
- Tax returns
- Paycheck stubs or paycheck forms
- Settlement sheet for three years prior and every pay period since the accident (if you’re a trucking owner or operator)
- Business records or documents (even CPA letters) if you’re a business owner
- Other documents depending on your unique circumstanced
In order to document that you need to take time off from work, you need to ask your doctor to issue a statement that will describe in detail, how much time you have to take off from work until you are fully recovered from your injuries. This is important as it will act as medical support to justify your absence from work. Your personal injury lawyer can help you secure this information through various reports or depositions.
In addition to all these documents stated above, you should also ask your employer to give you copies of your most recent checks or pay stubs. This will show how much did you earn before you got injured. And as the final document, you need to ask your employer to write you a statement that will confirm the information about your employment.
Calculating your lost wages
Calculating your lost wages, mainly depends on how you’re paid. It will be different if you’re paid by the hour, you receive a salary or you’re paid by some other basis.
When you’re paid by the hour, you will multiple your hourly wage with the total number of hours you missed because of your injuries.
So for example, if you’re paid $20 per hour and you work 8 hours a day and you missed 22 days of work, your lost wages will be:
20 x (8 x 22) = $3,520
In other cases, where you’re paid on a salary basis, the calculation is a bit different. Your annual salary gets divided by 2,080 (the number of working hours in a year). Then you will take that number and multiply it with the number of working hours in a day (so 8) and with the number of days you didn’t work because of your injury (let’s keep it 22 as before). If we assume that your annual salary is $50,000 the calculation will look like this:
$50,000 / 2,080 = 24.04
24.04 x (8 x 22) = $4,231 in lost wages
Of course, lost wages aren’t the only income that you can recover. If you receive other forms of income such as regular overtime, commissions, bonuses etc. these can be recovered too. Your personal injury lawyer will ask you about those as well and he/she will provide more information.
Lost income of Self-employed people
Let’s assume that you’re a self-employed person, maybe a web designer working from home. Even through you’re technically not employed by anyone, you can still claim your lost income. What’s different in this scenario is that your lost income consists of your earning AND profit that you would make if you weren’t injured. In this case, you have to gather documents and records that will prove the earning that you expected from the day you were in an accident until the date of judgement or settlement. Useful documents are: 1099 forms, invoices you issue to your clients / customers, records from your bookkeeper or accountant, receipt, communication between you and your clients/customers and so on.
Other income losses
Aside from your past income that you lose because of your injury, you might also be entitled to claim certain future income losses and your lost earning capacity. This will require your personal injury lawyer to work with an economist or vocational expert to establish your lost opportunities in the labor market.
Even through determining lost wages might seem like a pretty straightforward process, it can be rather difficult and complicated in some cases. That’s why you should work with a personal injury who is well informed about this and who can really help you. You can of course do some calculations on your own, but it’s best to let the attorney do the real math and negotiate on your behalf.