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How Are Lost Wages Calculated in a Personal Injury Case?

Calculating Lost Wages in a Personal Injury Case

After suffering injuries in a car accident, victims often feel anxious about finances, especially if those injuries forced the victim to miss work. Arizona courts allow such victims to file wage loss claims.

What is a Lost Wage?

A lost wage is any income that you lost because of the accident, including:

  • Lost wages for the time you were not able to work;
  • Lost earning capacity if the accident leaves you disabled and unable to work; and
  • Lost opportunities, such as having to turn down a promotion, contract job, or other means of income because of the injuries sustained.

There is a notable difference between a lost wage and lost compensation. Wages are the amount of money your employer pays you for the work you do. These may be paid weekly, bi-weekly, etc.

Compensation represents the additional financial benefits of your employer, as well as your earning capacity. Compensation includes sick and vacation days, pay bonuses, and perks.

Documenting Lost Wages

In order for insurance companies to pay out on your lost wages claim, they will need for you to provide sufficient proof. This simply means that you must have documentation that proves you cannot work because of the injuries sustained.

This may include:

  • Medical records showing that you cannot work due to the injuries. These records include dates and descriptions of the injuries;
  • The letter sent from your doctor to your employer explaining that you are unable to work;
  • A medical narrative from your doctor, including a progressive prognosis, stating when you can return to your full job duties
  • A letter from your employer showing dates that you missed, your pay at the time of injury, any overtime you worked in the months prior to the injury, etc.
  • Tax returns/W-2s to prove income;
  • Letters proving any lost opportunity, such as denial of promotion.

For all of the above-listed documentation, it is important to remember that the more detailed, the better it is.

When requesting documentation from your doctor and/or employer, request that they include as must evidence as possible to alleviate any potential questions down the road. Any vagueness will give the adjuster a chance to argue against paying your lost income.

Insurance companies usually combine lost wages and lost compensation together and refer to them collectively as lost income. While this is fine, it is important that you know the difference to ensure that you are getting a fair deal.

Calculating Lost Wages

The process of calculating lost wages differs, depending on your work status. If you are an hourly or salary employee, calculating lost wages is fairly simple and straightforward. You will multiply the number of days or weeks that you missed by your hourly or weekly salary.

For those that are self-employed, the process can be more complicated. However, it can be calculated by studying bank statements showing deposits, profit and loss statements from before and after the accident, the prior year’s tax return, signed contracts, and invoices and receipts. If your business is complicated, it may be best to utilize a forensic accountant.

Other Types of Lost Compensation

Sick Days

You have a right to be reimbursed for the value of any sick days that you were forced to take because of the injuries.

Vacation Days

If you were forced to use your vacation days while recovering, you should be compensated for the value of those days, as you should not have to lose those days because of the at-fault party.

Bonus Days

Bonus days are any other days that you have earned, or could have earned, off from work. These include national holidays, birthdays, mental health days, and performance days. Similar to sick and vacation days, each bonus day carries a value of one day’s wages.

Pay Bonuses

These are typically paid by employers based on an employee’s performance. If your injuries prevented you from getting a bonus you were in contention for, you can demand compensation for it.

Additional Perks and Benefits

Perks are similar to pay bonuses, only they typically represent non-monetary compensation, such as use of company care, golf outings, etc. These are often overlooked by victims, but should be included in the claim.

Contact The Yearin Law Office

If you have been injured in an accident and believe that you have a lost wage claim, contact the Yearin Law Office today. Our experienced team will work with you through the intricacies of identifying and calculating lost wages, and filing a claim to retrieve those lost wages. Call (480) 502-0708 today for a free consultation!

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