Should You Sue for Lost Wages in an Injury Lawsuit?

If you’re filing a personal injury claim, you may be eligible to receive compensation for your lost wages. Courts recognize that loss of income can be devastating, often causing short-term and long-term financial distress.

It’s a compounding problem because in addition to large medical bills, if you’re missing work, now you can’t afford basic living necessities.

And missing work is only one form of lost wages. Loss of income can include a variety of sources:

Commissions made from sales of products or services
Bonuses
Overtime
Other benefits gained from employment

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Differences Between Lost Wages and Lost Earning Capacity

The difference between lost wages and lost earning capacity is that lost wages refer to past income, while lost earning capacity describes future ability to earn income not yet earned.

The most significant distinction between the two is that lost earning capacity can be hard to prove in a court since it is much more complex than lost income.

How to Prove Lost Wages

Proving lost wages is often straightforward if you have the proper documentation.

You’ll need to collect evidence such as:

Pay Stubs
W-2 Forms
Statements from your supervisor or manager
Documentation of any paid time off (PTO) used for the injury
The dates you were absent from work

Also, keep track of any related expenses to your injury:

Mileage or transportation costs to treatments
Additional childcare expenses
Co-pays, prescriptions, and doctor appointments

How to Prove Lost Earning Capacity

Lost earning capacity is a type of financial compensation for future income you won’t be able to make because of physical or psychological problems caused by the injury. Calculating lost earning capacity is challenging, and it’ll help to consult with an attorney to prepare your case.

Determining your lost earning capacity often takes into consideration the following:

Skills
Talents and abilities
Work experience
Education level
Occupation history
Work performance

Determining lost earning capacity will require studying job market trends in their relevant industry. Age, health, employment restrictions, or special protections granted by law are also considered to calculate potential losses due to an injury or illness accurately.

During the case, it’s common to hire an expert to demonstrate how the injury may affect the individual’s future earning capacity. The expert might show evidence of how the injury affects the person’s mobility, physical abilities, work performance, and potential ability to maintain sustained employment. This could also include any pain or discomfort they might be experiencing due to the injury, and any changes in their work hours or job responsibilities.

Remember that lost earning capacity can vary drastically from location to location. Factors like the cost of living, type of employment, and skill level will all be considered when determining an individual’s potential lost earnings.

How Is Loss Of Potential Income Calculated?

Loss of income is not calculated by an individual’s actual earnings either before or after the injury. Instead, these damages are determined by the potential earning capacity of the individual.

The court will first assess what the individual could earn before they were injured. They will then compare this amount to their reduced earnings after the injury. The difference between these two figures will be used to calculate the level of compensation.

Since calculating loss of potential income is a complex process, you should consult an expert attorney at Tuley Law Office. Regardless of the injury type, our team is dedicated to restoring the lives of our clients.

Loss of Income for Self-Employed Workers

If you’re self-employed, seeking reimbursement for both lost wages and lost earning capacity will be much more complicated than it is for W-2 workers.

Without a consistent paystub for reference or statements from supervisors, you’ll have to present excellent records of your previous income levels and show proof of any lost opportunities because of the injury.

This could include proof of canceled contracts or jobs not pursued due to the accident. While self-generated documents may be used as evidence when filing a claim with an insurance company, they are viewed less favorably than actual tax returns. They can lead to delays and denials in the claims process.

However, if you have an established business with consistent tax returns, it’ll be easier to show your income trends. Then, the process of recuperating lost wages will be relatively similar to a W-2 worker.

When You Can’t Claim Lost Wages in a Personal Injury Claim

You cannot pursue legal action for a loss of income attributed to a pre-existing medical condition not caused by the defendant’s actions. You also have to show the specific amount of lost income with reasonable certainty.

Who Pays for Lost Wages in a Car Accident?

If you are in a car accident, who pays for lost wages can vary depending on which state you live in and factors like the type of insurance coverage.

After a car accident, a person’s short and/or long-term disability plans will usually pay some of their lost wages. Additionally, a personal auto insurance policy may cover certain wage loss benefits through their uninsured motorist (UM) and underinsured motorist (UIM) coverage provisions.

Suppose the driver at fault has liability insurance. In that case, this policy should provide coverage for your lost wages—up to that driver’s bodily injury liability limits.

In addition, certain states allow victims of negligence-based car accidents—an accident caused by another driver’s reckless or careless behavior—to sue the driver for medical bills, future medical expenses, and lost wages. A person could pursue damages if injured due to a defective part or product in their vehicle, such as a tire blowout or airbag malfunction.

Ultimately, your state laws and auto insurance policies determine who pays for lost wages after an auto accident. If you have questions about how to seek compensation for your losses in an auto accident case, it is always a good idea to talk to an experienced injury attorney who can help you through every step of the process.

Does Workers’ Comp Pay for Lost Wages?

Yes, workers’ compensation pays for lost wages in certain circumstances. In most cases, it offers financial help if an employee is injured or becomes ill due to a work-related incident or condition. This is typically done through benefits, including medical and rehabilitation costs and wage replacement or income benefits.

Workers’ comp wage replacement will often cover a portion of the employee’s average weekly wages before taxes, up to the maximum allowed by law. In addition to this benefit, some states may also offer cost-of-living adjustments or other types of additional compensation when necessary. However, wage replacement can vary from state to state, depending on the laws in that particular jurisdiction, so it’s best to consult an attorney first.

Not all employees are eligible for workers’ comp wage replacement. Typically only those who have been injured or made sick due to conditions at work are eligible. How long these benefits are available varies depending on the injury or illness severity. Some states limit coverage after a certain number of weeks, while others may be more lenient about how long these payments can last.

Hire an Indiana Personal Injury Lawyer for Loss of Potential Income

It can feel easier to settle for less during a personal injury lawsuit. Hiring the right attorney can make the difference between getting what you financially deserve and settling for less. Tuley Law Office has many decades of in-depth understanding and experience in personal injury lawsuits and helping people reclaim their lost potential income. We work on a contingency-fee-basis which means we won’t charge you unless you win your case.

Expand your options for compensation after a work injury by contacting an Evansville injury lawyer at Tuley Law Office today. Fill out our online form or call us at (812) 625-2053.

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