7 Things to Know About Lost Wages

Estimated reading time: 5 mins

If you’re in a car accident, even with mild or moderate injuries resulting, it can change your life. You may not be able to work, for example, and without an income, the financial difficulties stemming from your accident can become a lot worse. You can be compensated for lost income and wages from a car accident, though. 

If someone else is responsible for your injuries, and you file a lawsuit against them being the negligent party, you can hold them both financially and legally responsible for the harm they’ve caused you. The harms you suffer might include, among other things, lost income, wages, and the value of work-related benefits. 

The following are seven important things to know about lost wages following an accident. 

1. The Basics

When you’re hurt in a car accident, it could lead to a broken leg, a concussion, or fractured ribs, for example. If you work in a job that’s physically demanding, your injuries would keep you out of work for weeks and potentially more. 

The money you would have ordinarily earned had you not been in an accident is your lost wages. 

2. They’re Economic Damages

In accident claims, damages can fall into one of two general categories—economic and non-economic. When you file a lawsuit after being involved in an accident, you’re going to pursue compensatory damages. Compensatory damages are what include the subcategories of economic and non-economic damages. 

Lost wages are economic damages, which are meant to make you financially “whole” again following an accident. 

When you recover an economic award, in a financial sense, it should be like you were never in an accident. 

You’re asking someone when you ask for wage compensation to be reimbursed for the income that you’ve lost. 

While physical injuries are what we commonly think of as keeping people out of work, you might be able to receive compensation for lost wages from psychological injuries if they’re severe. 

3. Calculating Lost Wages

You can calculate lost wages by taking the money you typically earn in a period, like a day, week, or month, and then multiplying that by the time you’ve been out of work. 

If you get an annual salary, you just have to calculate the amount of money you would have made in the period you couldn’t work. 

4. What If You’re Self-Employed?

If you work as a sole proprietor, freelancer, or independent contractor or you’re self-employed in any way, you may be able to claim lost income rather than lost wages. This is just a reference to the earnings and profits you would have made had you not been injured. 

If you’re self-employed, while it’s possible to recover lost income, it can be more complex. You might have a variety of income sources, and your income probably varies from week to week or month to month. 

You’ll need to show all of your sources of income and prove what your likely total income would have been based on things like past earnings, your recent or upcoming projects and work, and past tax returns. 

5. Other Job Benefits

Compensation can be more than just money, as employers frequently offer things like paid time off (PTO), including vacation days, sick days, and personal time. After an accident, you might use your PTO if you can’t work, but you’re only doing this because you have no other option. Then, if you use all of your PTO due to your accident recovery, you can’t use it when you actually do want to in the future. 

With that in mind, you may want to be compensated for benefits you’ve had to use because of your accident. 

If you use your sick days or PTO following an accident, you might receive reimbursement for the value of the time. 

To figure out PTO damages, you’ll need to calculate what you’d typically earn in a day. 

6. Proving Lost Wages

You’ll have to prove two key things to receive reimbursement or compensation or income and wages you lose because your accident. The first thing you’ll have to prove is that your injury prevented you from working or interfered with you doing so. 

You can show a copy of your medical records to prove this and get a letter from your doctor. 

The next thing you’ll have to prove is that your claim value is legitimate. You’ll have to show you’re losing the wages you’re asking for. 

The easiest things to gather here include your W2s, tax returns, and pay stubs. You can also ask for a letter from your employer. 

7. Who Pays Lost Wages?

If you’re in an accident, depending on the state you’re in, the at-fault driver’s insurance company usually pays. This is the case in states with fault insurance laws. In a fault state, the at-fault party’s insurance provider is responsible for damages stemming from the accident. If another driver is to blame, you have the option to submit an insurance claim. Then, you can seek benefits under the other driver’s bodily injury liability coverage up to their policy limit. 

If the damages you incurred are beyond what the at-fault driver’s insurance will pay, you can file a lawsuit directly against the driver who’s at-fault. You are seeking, in this scenario, to recover lost wages and other damages from that person. 

If the person who caused your accident and subsequent injuries were working when the accident happened, their employer could be responsible for your damages. For example, if you were in an accident with someone driving a commercial vehicle, the company employing that person might be responsible for the actions of its negligent employee. 

If you were working when you were in an accident, then you might submit a worker’s compensation claim. 

It all gets somewhat complicated if you’re hurt in an accident, and you lose income as a result, so the best thing to do, regardless of specifics, is to get in touch with a personal injury attorney. They can help you understand what steps might be best for you to take next.

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