When an accident prevents you from working, the financial impact can be devastating. Without income, it’s practically impossible to meet your living expenses, pay off debt, or take care of your family. Fortunately, lost wages are one of the economic damages you can claim in a personal injury lawsuit.
Lost wages encompass not just your regular salary or hourly earnings, but also bonuses, commissions, and other forms of compensation you would have received had you not been injured. Knowing how to accurately calculate these losses is essential to ensure you receive the full compensation you deserve.
This blog will guide you through the process of calculating lost wages after an accident in Texas. We will discuss the types of income that should be included, the documentation needed, and the steps involved in calculating both past and future lost wages. We’ll also address special considerations for self-employed individuals and the importance of legal representation in these cases.
Understanding Lost Wages
Lost wages refer to the income you miss out on due to being unable to work after an accident. This can be a significant component of your personal injury claim, as it directly impacts your financial stability. When calculating lost wages, several types of income should be included to ensure you are fully compensated. These types include:
- Salary: If you are a salaried employee, your lost wages calculation should account for your regular monthly or yearly salary.
- Hourly Wages: For hourly workers, lost wages are calculated based on the number of hours you would have typically worked, multiplied by your hourly rate.
- Bonuses: Any bonuses you would have earned had you been able to work should be included. This might require looking at past bonus patterns and performance reviews.
- Commissions: If your job includes commissions, these should also be factored into your lost wages. This can involve reviewing your average commission earnings over a specific period before the accident.
Past losses are the earnings you have already missed from the time of the accident until the present. This calculation is relatively straightforward as it involves documenting your actual missed workdays and income. Future lost wages, on the other hand, represent the income you will lose going forward due to long-term injury or permanent disability. Estimating future lost wages can be more complicated because they require projections based on your employment history, expected career trajectory, potential raises, and promotions.
Documenting Lost Wages
Precise and thorough documentation helps establish the extent of your financial loss due to the accident. This not only strengthens your accident claim but also reduces the likelihood of disputes with the insurance company or opposing party. To accurately document your lost wages, gather the following types of records:
- Pay Stubs: These stubs provide a clear record of your regular income and any variations in your pay. They help establish your earnings before the accident.
- Tax Returns: Your tax returns offer a detailed view of your annual income, including salary, bonuses, and commissions. These documents are particularly useful for self-employed individuals.
- Employer Statements: A statement from your employer can confirm the time you have missed work and the income you have lost as a result. This can include details on your hourly rate, annual salary, and any lost bonuses or commissions.
Medical records and doctors’ notes are crucial in linking your inability to work directly to the accident injuries. These documents serve as evidence that your missed workdays and loss of income are medically justified, and compiling them helps you build a more compelling case for lost wages.
Calculating Past Lost Wages
To calculate your past lost wages, start by identifying the exact dates you were unable to work due to your injury. This period begins from the day after the accident until the day you return to work or reach maximum medical improvement. You will need to use medical records and doctors’ notes to establish and justify this timeframe.
Once you have the period of missed work, calculate the total income you would have earned during this time. For salaried employees, divide your annual salary by the number of workdays in a year to find your daily rate, then multiply by the number of days missed. For hourly employees, multiply your hourly wage by the number of hours you would have worked during the missed period. Be sure to include any lost bonuses, commissions, or other forms of compensation that you would have received.
If you have multiple jobs or part-time work, calculate the lost wages for each position separately. Ensure you gather and present documentation for all jobs affected by your injury, including pay stubs and employer statements for each job. You can then calculate the lost wages from all positions to find the total income lost.
Estimating Future Lost Wages
Estimating future lost wages is critical when an accident results in long-term recovery or permanent disability. Start with your current salary or hourly wage, including any bonuses, commissions, and benefits, and then consider your expected career trajectory, including potential raises, promotions, and inflation adjustments. This projection should reflect what you would have likely earned if the accident had not occurred.
The next step is to estimate the impact of your disability or long-term recovery on your ability to work. This may involve calculating a reduction in working hours per week, a shift to a lower-paying job, or a complete inability to work. Then multiply your projected annual earnings by the number of years you are expected to be out of work or until retirement, adjusting for any partial loss of earning capacity.
Accurately estimating future lost wages often requires the expertise of professionals like the following:
- Vocational Experts: These professionals assess your ability to work given your injury and help determine suitable job opportunities and potential income based on your skills, education, and physical capabilities.
- Economic Analysts: Economic analysts use financial models to project your future earnings, considering factors such as inflation, industry trends, and economic conditions. They provide a detailed and quantifiable estimate of your future lost wages.
Self-Employed Individuals and Lost Wages
Self-employed individuals like independent contractors and professionals face distinct difficulties when documenting and calculating lost wages. Unlike regular employees, self-employed people often have fluctuating incomes, making it harder to determine a consistent wage loss. Many self-employed individuals also have income from various sources, including contracts, freelance work, and business profits.
Without a formal employer, self-employed individuals must rely on their business records to prove lost income. This may include:
- Invoices: Provide records of billed work that you were unable to complete or lost due to the injury.
- Contracts: Present signed contracts that show the expected income from projects that were canceled or postponed.
- Profit and Loss Statements: These statements offer a clear picture of your business’s financial performance before and after the accident.
- Tax Returns: Annual tax returns can demonstrate your overall earnings and help validate your income claims.
- Bank Statements: These records can support your claimed income by showing deposits from clients and other business-related transactions.
When calculating lost wages, consider the following steps:
- Estimate Average Income: Determine your average income over a relevant period (e.g., past 12 months) to establish a baseline for your earnings.
- Identify Lost Opportunities: Calculate the income from missed business opportunities, such as canceled contracts or uncompleted projects. Use your documented records to support these lost wage claims.
- Project Future Losses: Estimate the potential long-term impact on your business, including future income that could be affected by ongoing recovery or permanent disability. This may involve projecting reduced client acquisition, slower business growth, or diminished work capacity.
By thoroughly documenting your income and lost opportunities, you can build a strong case for your lost wages.
Other Considerations in Lost Wages Calculations
When calculating lost wages after an accident, there are several additional factors to consider beyond just your regular income. Here’s a closer look at some of these important considerations.
Benefits and Perks
Lost wages calculations should also account for the loss of various fringe benefits and perks that are part of your compensation package:
- Health Insurance: If you lose employer-sponsored health insurance due to your inability to work, the cost of obtaining similar coverage independently should be included in your lost wages claim.
- Retirement Contributions: Employer contributions to retirement plans, such as 401(k) matches, are an important part of your total compensation. The value of these lost contributions should be factored into your claim.
- Other Perks: Additional perks, such as stock options, paid time off, vacation days, and other non-monetary benefits, should also be considered when calculating your total lost wages.
Raises and Promotions
If you have a history of receiving regular performance-based raises, they should be projected into your future earnings. Potential promotions and associated salary increases should also be accounted for based on your career trajectory and past performance.
How Can a Texas Personal Injury Lawyer Help With Lost Wages?
Claiming lost wages after an accident can be challenging due to all of the documentation, calculations, and variables involved, but an experienced personal injury lawyer can help ensure that you receive the compensation you deserve. Not only do they know all the legal standards and documentation needed to support your lost wages claim, but they also can accurately calculate both past and future lost wages after considering all relevant factors such as benefits, raises, and promotions.
The sad reality is that insurance companies often attempt to minimize payouts. A skilled lawyer can negotiate with insurance adjusters on your behalf to secure a fair settlement. If your case goes to trial, having a lawyer to represent you is essential. They can present your case and back it with solid evidence and strong legal arguments.
At Villarreal & Begum, LAW GUNS, we can help you pursue your lost wages claim as part of an overall personal injury lawsuit. We assist in gathering all necessary documents, including pay stubs, tax returns, and medical records, and make sure that all aspects of your income and potential future earnings are included. We also collaborate with vocational experts and economic analysts to provide a detailed and accurate estimate of your future lost wages, strengthening your claim.
By hiring Villarreal & Begum, LAW GUNS, you can be confident that your lost wages claim is in capable hands. We are here to support you every step of the way and secure the compensation you need to recover and move forward.
Questions About Lost Wages? Speak to a Texas Personal Injury Attorney
At the Villarreal & Begum, LAW GUNS, we understand the financial strain an accident can impose on you and your family. Our dedicated team of personal injury lawyers is here to listen to you, support you, and demand fair compensation for your lost wages. With extensive experience in handling personal injury cases in Texas, we can provide you with the support and guidance you need during this challenging time. To learn more or schedule a free consultation, call (210) 800-0000 or contact us online today.
The Villarreal & Begum, LAW GUNS dedicates their time and effort towards helping people in Texas find justice for personal negligence encountered while living their normal, everyday lives.