How Are Lost Wages Determined in a Personal Injury Case?

How Are Lost Wages Determined in a Personal Injury Case?

Being the victim of an accident caused by someone else’s negligence can take a significant toll on your life and livelihood. Not only might you be suffering physical and emotional pain due to your injuries, but you also may also incur substantial financial losses — including lost wages.

In addition to the medical expenses you’ve incurred, lost wages can comprise a large portion of your economic damages in a personal injury matter. Whether you were hurt in a car accident, slip and fall, or another incident, it’s important to understand that you may be entitled to recover both your lost wages and your future lost earnings.

What are Lost Wages?

Lost wages is a term used in personal injury claims that refers to the amount of money you would have made at your job while you are recovering from your injuries. It typically calculates the number of days you missed from work, multiplied by your daily wage. However, you may also be compensated for employment benefits and perks you would have received.

Depending on the facts of your case, an award of lost wages can include the following job-related financial losses:

  • Hourly wages
  • Salary
  • Overtime
  • Bonus pay
  • Sick days and vacation time
  • Lost job perks
  • Commissions
  • Tips

Losing time from work can be detrimental to both your day-to-day life and your future career. Accordingly, a lost wage claim in a personal injury lawsuit also accounts for future lost earnings and loss of earning capacity caused by your accident-related injuries.

What is Loss of Earning Capacity?

Importantly, lost wages are not the same as loss of earning capacity. In a personal injury action, you may be entitled to recover not only the wages you’ve actually lost as a result of your injuries, but also the income you are expected to lose in the future. For example, your injury may have caused you to lose promotion opportunities or measures that would have advanced your career. Loss of earning capacity can also include a reduction in the hours you are able to work and any other limitations concerning your ability to earn a living.

Loss of earning capacity damages can be challenging to calculate and often requires a vocational expert to determine. In some cases, a victim may slowly recover from their injuries — in others, they may be unable to work at all. A medical expert may help to establish your loss of earning capacity by explaining the impact of your injury on your ability to be gainfully employed in the future. Non-expert testimony from friends and family can also be relevant to demonstrate how motivated you were to move up in your career before you sustained the injury.

Factors that may be considered in estimating loss of earning capacity can include your work experience, job-related skills and abilities, and your general career trajectory. Other factors can include your age, length of recovery time, number of years until retirement, and work ethic. Additionally, a court would likely consider your potential for promotion and health prior to suffering from the injury.

How Are Lost Wages Proven?

To prove your lost wages, you will need to present adequate documentation of your income and earnings. Evidence can include W-2 statements, pay stubs, bank statements, and tax returns. Establishing your loss of benefits, sick pay, or vacation time may require a detailed written statement from your employer. They can also provide a wage verification letter that confirms what you were earning at the time the accident occurred.

If you are a freelancer or self-employed, proving lost wages after an accident can be more challenging — but it is still possible. For instance, you may be able to present invoices, receipts, a 1099 form, business records that demonstrate what your income would have been, copies of checks you have received, and previous tax returns. If you were under a contract for a certain job that you were unable to complete due to your injuries, the agreement can be used to prove loss of your income.

Medical records are also essential to establish the extent of your lost wages. They should include details regarding your injuries, the prognosis, and your doctor’s recommendations for taking time off from work. In addition, you will need a disability note from your doctor to show that you have missed work due to an injury that was directly caused by the accident. The note should use language that specifies the wage loss you are claiming is, in their opinion, “within a reasonable degree of medical certainty,” the result of the accident at issue.

Contact an Experienced Alaska Personal Injury Attorney

If you suffered injuries in an accident caused by someone else’s negligence, carelessness, or recklessness, you may be able to recover your damages — including your lost wages — in a personal injury action. However, proving economic damages such as lost wages can be complicated, and it’s vital to have a skillful personal injury attorney by your side who can help ensure you receive the maximum recovery to which you’re entitled.

Proudly serving accident victims in Anchorage, Soldotna, Kenai, Palmer, Wasilla, and other areas of Alaska, The Trial Guy, Eric Derleth, is dedicated to representing clients for a broad scope of personal injury matters. Call 907-262-9164 to schedule a free consultation at our Anchorage or Soldotna office, or contact us online. Our phone lines are open 24 hours a day, seven days a week.

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