If you've been involved in an accident or suffered an injury as a result of another party’s negligence or carelessness, you are obviously entitled to compensation for your medical bills. However, you may also be entitled to compensation for missed work, which we sometimes call “lost wages.”
Calculating lost wages can be complicated, but it's essential to understand how to do it correctly to ensure you receive the full amount of money you're owed. In this comprehensive article, we'll explain how to calculate lost wages, the factors that determine how much you're entitled to, and how to maximize your recovery.
What Are Lost Wages?
Lost wages refer to the income you would have earned had you not been injured in an accident. This income includes not only your regular wages or salary but also any bonuses, commissions, overtime pay, and other forms of compensation that you would have received had you not been injured.
In a personal injury claim, lost wages are one of the many types of economic damages that you can claim. In other words, if a person acts negligently and hurts you as a result, they have to pay you if you miss work because of those injuries.
Economic damages are actual losses that can be quantified and supported by documentation, and so, to receive compensation for lost wages, you must provide evidence of your lost income. Typically, it’s not much more complicated than proving the days of work you missed and providing pay stubs to show the value of that missed work. We’ll dig into this in more detail below.
Factors that Determine Lost Wages
To determine the proper value of lost wages, we need to look into several factors. Here are some of the factors that help us determine how much money you're likely entitled to:
The Nature and Extent of Your Injuries
The severity of your injuries and the time it takes to recover can affect how much you're entitled to in lost wages. If your injuries prevent you from working for an extended period, your lost wages could be significant. Keep in mind, you aren’t just entitled to work you’ve already missed, but you’re also entitled to damages for work you will miss in the future as a result of your injuries.
Your occupation and level of income can affect how much you're entitled to in lost wages. As we talked about, your pay stubs are a big part of calculating lost wages. Thus, if you have a high-paying job, your lost wages will be higher than if you have a lower-paying job.
Your Work Schedule
Your work schedule can also affect your lost wages. If you work overtime or have a flexible work schedule, you may be entitled to more lost wages than if you have a fixed work schedule. Again, we’re looking at what you missed out on as a result of your injuries. If you missed out on overtime pay, you should be compensated for that loss.
Your Age and Experience
Your age and experience can also affect how much you're entitled to in lost wages. An older worker may have specialized knowledge in a particular field and be worth much more money per hour or work missed. However, if you're a younger worker, you may be entitled to more lost wages in the future because you have many more working years ahead.
Calculating Lost Wages
Now that we’ve looked at the factors above and weighed these factors to get a ballpark idea of what the lost past and future wages may be, we need to get into the numbers and actually calculate lost wages. Calculating lost wages can be a complicated process, but it's important to do it right to ensure you receive the full amount you're owed. In other words, you don’t want to leave anything out.
Calculating lost wages can be a bit different, depending on whether you are an employee or whether you are self-employed. We’ll start by talking about how to calculate lost wages if you’re an employee. Then, we’ll cover how to calculate lost wages if you’re self-employed.
Calculating Lost Wages for Employees
Here are the steps you should take to calculate lost wages if you are an employee:
Step 1: Determine Your Pre-Accident Income
The first step in calculating lost wages is to determine your pre-accident income. In other words, how much money did you make before you got hurt? Your pre-accident income includes your regular wages or salary as well as any bonuses, commissions, overtime pay, and other forms of compensation you would have received had you not been injured. You may also include any benefits you receive from your employer, such as health insurance, retirement benefits, and paid time off.
Step 2: Determine Your Post-Accident Income
The second step is to determine your post-accident income. In other words, did you make any money from your job after you got injured? For example, this would include income you received while your injuries prevented you from going to work. So, this might include things like sick leave, vacation pay, disability benefits, or other forms of income.
Step 3: Calculate the Difference
The third step is to calculate the difference between your pre-accident income and your post-accident income. In other words, how much less money did you make after you got hurt than you were making before you got hurt? This will give you the amount of income you lost due to your injuries, and you can use this amount to calculate your lost wages.
Here’s an easy formula to help you calculate your lost wages:
Lost Wages = Pre-Accident Income – Post-Accident Income
Often times, the post-accident income is zero because folks don’t make any money after they get hurt. They’re injured, and they can’t go to work. So, in these cases, your lost wages would be your pay before the accident.
Step 4: Document Your Lost Wages
The defense if going to ask you to prove that you missed work before you have a chance of getting that money. Thus, to receive compensation for lost wages, you should carefully document your lost income. For example, you should be keeping track of the days you missed work, the hours you worked, and any income you received during that time.
Here are some tips for documenting your lost wages:
- Keep a log or calendar of the days you missed work due to your injury.
- Keep track of your regular work schedule, including hours worked and days off, to establish your normal pay rate.
- Keep copies of any pay stubs or other documents that show your earnings prior to the injury.
- If you are self-employed, keep accurate records of the income you lost as a result of the injury, such as cancelled contracts or lost business opportunities.
- Keep a record of any work you were able to perform while recovering from your injury, as this may affect your compensation.
Step 5: Seek the Help of An Orlando Personal Injury Lawyer
The insurance company is not just going to hand over your lost wages. Instead, they’re going to do everything they can to keep from paying you what you deserve. That’s what insurance companies do because their business is to deny of minimize claims and pay out as little as possible.
Recovering lost wages after a serious accident can be complicated, frustrating, and time-consuming. Insurance companies and the defense will try to dispute or minimize the value of your claim every step of the way. That's why it's essential to have a knowledgeable and skilled Orlando personal injury lawyer on your side to protect your rights and fight for the compensation you deserve.
Your lawyer can help you:
- Determine the full extent of your lost wages and other economic and noneconomic damages.
- Gather and organize the necessary documentation to support your claim.
- Negotiate with insurance companies and other parties on your behalf.
- Represent you in court if necessary.
With the help of your trusted personal injury lawyer, you can focus on your recovery, and you can move forward with confidence, knowing that you have someone fighting on your behalf.
Calculating Lost Wages for Self-Employed Individuals
Calculating lost wages can be a bit more complicated for self-employed individuals than for employees, but it is still possible to recover these damages in a personal injury case. If you are self-employed, however, you may need to use business accounting or tax records to show your losses. It is essential to prepare these documents carefully, as they will be crucial in proving your lost wages claim. Here are some tips for calculating lost wages for self-employed individuals or people who work for their own entity:
Step 1: Calculate Your Take-Home Income Before the Accident
Start by calculating your take-home income before the accident. This is the amount you earned after deducting your business expenses from your gross income.
Step 2: Determine How Much Work You Missed
Next, determine how much work you missed due to your injury. This includes the time you spent recovering and any time you spent attending medical or rehab appointments related to your injury.
Step 3: Calculate Your Lost Income
Once you determine how much work you missed, you can calculate your lost income by multiplying the number of hours of work you missed by the amount of money you make per hour. That equation might look something like this:
Lost Income = (# of Hours Missed) x ($ per Hour)
Step 4: Consider Future Lost Income or Missed Work
If your injury will prevent you from working in the future or if it will affect your ability to earn income in the long-term, you can also seek compensation for future lost income, or lost future wages. Obviously, this may be a bit more difficult to quantify because it’s a future estimate, rather than something we can quantify with missed days of work and established wages.
Step 5: Provide Documentation to Prove Your Losses
As with employees, self-employed individuals must provide documentation to support their lost wages claim. This includes tax returns, profit and loss statements, and other business records.
Overall, it can be difficult to calculate lost wages if you’re self-employed or work under your own entity. However, it can be done, and your Orlando personal injury lawyer can help you navigate the process and get the compensation you deserve.
Brief Summary of the Article
Calculating lost wages after getting injured in an accident that wasn’t your fault can be a complex process, but it's an essential step in seeking the compensation you deserve. By following these steps and getting help from your Orlando personal injury lawyer, you can better understand your lost wages and take the necessary steps to recover the compensation you are entitled to.
Remember, documenting your lost wages and other damages is crucial to building a strong case, so be sure to keep accurate records and seek professional help if needed. With the right approach and meticulous recordkeeping, you can recover the lost income and other damages you need to move forward with your life after a personal injury.
Do You Need an Orlando Personal Injury Lawyer?
If you have been injured as a result of the negligence, recklessness, or carelessness of another party, you should speak with a skilled, aggressive, and experienced Florida personal injury lawyer as soon as possible because you may be entitled to compensation. You can contact us online or you can call our Orlando, Florida law office at (321) 352-7588 to schedule your consultation.
If you need a South Carolina personal injury lawyer, please don’t hesitate to reach out to us at (843) 638-6590. We have at least one lawyer licensed in Florida, Georgia, South Carolina, and North Carolina.