People who meet with accidents may suffer considerably because of their injuries and other possible damages. While the pain and suffering are never easy to deal with, having to cope with the loss of earnings can complicate matters even more. If you, like many others, are wondering, “Can I claim compensation for loss of earnings?” know that you might be able to if you can prove that your lost income is a result of the injuries you suffered in an accident.
What Is Loss of Earnings in Personal Injury Claims?
In personal injury cases, loss of earnings refers to a situation where someone ends up making less money than expected because of injuries suffered in an accident. This umbrella term includes lost wages, loss of or diminished earning capacity, and lost benefits.
What Are Lost Wages?
Lost wages are the income you lost because your injuries kept you away from work. The idea behind wage loss compensation is for you to receive payment to cover the financial losses you incur because of taking time off work to receive the required medical treatment. Lost wages include your regular income, overtime pay, and tips.
In New York, you may file a workers’ compensation claim to cover lost wages if your injury/illness requires you to take more than seven days off work or if you receive lower pay because of working fewer hours or changing jobs.
What Are Lost Benefits?
Lost benefits encompass the value of employment-related perks that an injured person would have received if not for the injury. These may include paid time off, sick days, bonuses, commissions, and stock options.
What About Diminished Earning Capacity?
Loss of or diminished earning capacity is typically applicable to cases where victims suffer life-altering injuries/disabilities. These may come in the form of spinal cord injuries, traumatic brain injuries, amputations, severe burns, loss of sight or hearing, post-traumatic stress disorder (PTSD), or severe emotional distress. Unfortunately, there is no accurate future lost wages calculator that you can use because each case comes with its unique details.
This aspect addresses the future impact of your injury on your ability to earn. It considers long-term or permanent disabilities that reduce earning potential, the need to switch to lower-paying jobs, and lost opportunities for promotions or career advancement. For example, your injury might require that you shift from full-time to part-time work, or to a lower-paying, less physically strenuous job.
If your injury results in you missing out on an impending promotion and hampers your career progression, you might be in a position to claim compensation for the same. This is also the case if your injury causes you to seek early retirement. In this case, you will need to account for the number of years you might have continued to work if not for your injury.
Factors That Affect Loss of Earnings
Personal injury attorneys consider different factors to determine loss of earnings, including the severity of the injury/disability, pre- and post-injury incomes, and the injured party’s overall health. Other factors include:
- Days off work. These are the days you miss because of receiving the required treatment and recuperating from your injury.
- Employment type. Calculating lost wages is typically easy for salaried individuals and those who receive hourly pay, but it can become challenging for self-employed people, gig workers, and commission-based workers.
- Potential to earn. Your injury/disability might affect your potential to earn in the long term, be it in the form of promotions, raises, or overall career progression.
How Do You Prove Lost Wages?
If you’re a salaried worker or are an employee who works on an hourly basis, proof of lost wages is typically easy to provide. In this case, you can get a letter from your employer that outlines the details of your lost wages as well as all supporting documentation. The information your employer provides should ideally include:
- The number of days you remained off work.
- Your job title.
- The date you began your employment.
- Your pay (monthly, weekly, or hourly).
- Overtime hours.
- Lost bonuses and perks.
If you are self-employed or a gig worker, you may prove lost wages by using your medical records to show that you had to remain off work for treatment and recovery. Providing bank statements and copies of previous tax returns can also help.
The Role of Documentation
Accurate documentation is essential for a successful personal injury claim. It can come in the form of:
- Medical records.
- Pay stubs.
- Employer statements.
- Records of any lost benefits.
- Tax returns.
How Do You Calculate Loss of Earnings for Personal Injury?
Calculating loss of earnings in a personal injury case involves assessing past and future income losses.
Past Loss of Earnings
Salaried employees need to divide their annual salary by the number of workdays in a year to get a daily rate, followed by multiplying the daily rate by the number of days missed. If you work hourly, you need to multiply the number of hours missed due to the injury by your hourly wage. Other factors you need to consider include:
- Overtime pay.
- Bonuses.
- Commissions.
- Benefits (health insurance and pension contributions).
- Paid time off and sick leave.
If you’re a self-employed Individual or gig worker, the process becomes more complex and requires careful documentation. In this case, calculations depend on lost gigs, business opportunities, contracts, and income streams. Evidence like proof of booking patterns, past tax returns, profit and loss statements, and client invoices is crucial.
Future Loss of Earnings
In case of permanent disability, you need to calculate the difference between pre- and post-injury earning capacity over your expected working life. This often requires expert testimony from economists or vocational experts. When it comes to temporary disability, you must estimate the duration of inability to work and multiply the same by your regular earnings. Key factors to consider include:
- Potential career advancement.
- Possible income hikes in the future.
- Impact on earning capacity.
- Age and remaining working years.
Other Crucial Considerations
The law typically expects people who suffer injuries in accidents to try and mitigate their damages by looking for alternative employment options when possible. If you are in a position to do so and don’t do the same, it might work against you. In addition, the need for expert testimony might be crucial in complicated claims, especially ones that involve future loss of earnings.
How a Personal Injury Attorney Can Help
Seeking legal advice from a personal injury attorney is ideal because you can get all the help you need to navigate the complexities of your case. An experienced attorney knows how the claims process works and has the required knowledge surrounding all relevant laws. Besides, your attorney can calculate how much you should seek as compensation, even if it requires collaborating with a financial expert.
Keep in mind that when you file a personal injury claim, it will require negotiating with the insurance company in question. Unfortunately, insurance companies do their best to minimize their liability in such cases, and they also deny a number of claims. As a result, getting an attorney to negotiate on your behalf increases the likelihood of a successful outcome. If negotiations don’t bear the desired fruit, your attorney can file a loss of wages lawsuit in court.
Conclusion
Claiming compensation for loss of earnings in a personal injury case might be possible if your injuries require that you spend time away from work. However, remember that different factors play in role in how the process unfolds, and you need to account for past and future losses. Given that filing a claim and pursuing the matter to its logical conclusion is not easy, partnering with a personal injury attorney who specializes in wage loss compensation is the ideal way to go.