When you have been injured in an accident, the ramifications can impact all aspects of your livelihood. You may be unable to return to work, which may prevent you from contributing as a main source of income for your family.
Perhaps you are concerned about being able to make payments for your mortgage, medical bills, groceries, utility bills, and other expenses that you face in your daily life.
Were you involved in an accident caused by someone else’s negligence and must claim lost income? The personal injury attorneys at Rosenfeld Injury Lawyers are legal advocates who can help you recover compensation for damages.
Contact our workers’ compensation lawyers at (888) 424-5757 (toll-free phone number) or use the contact form today for immediate legal advice and schedule a free consultation.
All confidential or sensitive information shared with our legal team about your personal injury case remains private through an attorney-client relationship.
Calculate Total Lost Wages
A car accident injury could make you lose money. If you are injured in a crash, you might end up missing work because of your injuries. You may even miss out on overtime pay. Understanding how to calculate lost wages in a car accident claim is important.
To calculate your lost wages, we recommend starting with your average hourly wage. Your average hourly wage is usually found on your paycheck stub or employment contract.
Next, add any tips you earned during the week. Then, deduct any taxes you paid. Finally, subtract any vacation or sick days you took during the pay period.
Many factors affect your ability to earn income while recovering from an injury. For example, if you do not have health insurance, you will likely be unable to receive medical treatment for your injuries. In addition, some states require that you take unpaid leave from your job, which will reduce the number of hours you can work.
Before Calculating Lost Wages
If you are injured in a car accident while working, you may be entitled to receive workers’ compensation benefits. To do so, you must submit a claim form to your employer’s insurance carrier within 90 days of injury. This complicated process requires documentation of your earnings and tax information.
If you don’t know how much you earned during the previous calendar year, it may be difficult to determine whether you are eligible for workers’ compensation benefits based on your current income. You could lose out on important benefits if you fail to file a timely claim.
To avoid missing out on important benefits, here are some tips for calculating lost wages:
Determine your average weekly wage
Your average weekly wage is calculated by dividing your total annual earnings into 52 weeks based on past pay stubs. For example, if you make $2,500 per week, your average weekly wage is $53,250.
Use your most recent tax return
You can use your most recent federal income tax return to determine your average weekly wage. However, remember that this method does not consider deductions such as 401(k), health care premiums, and union dues.
What is Involved in the Calculation
If you are injured in a car accident, it is important to know how much money you could lose because of your injury. You may feel cheated out of what you deserve if you do not receive compensation.
However, many factors go into determining how much money you might lose due to your injury.
The amount of money you lose depends on several factors, including:
- Your age
- Your type of job
- Whether you can return to work at all
- The extent of your car accident injuries
- How much you earn per hour
Paid an Hourly Wage? How Much Money Will You Lose If You Miss Work Due to an Injury?
According to the Bureau of Labor Statistics, the average hourly daily wage in the United States is $23.53 per hour. However, some people are paid by the hour, while others are salaried employees.
Regardless of the pay structure you are working under, it is important to know how much you will lose in wages if you miss work because of an injury or illness.
Determine Your Base Salary
To determine your base salary, add up all your regular earnings. For example, you make $40,000 yearly and receive a weekly paycheck. Check your tax returns for the total amount of wages based on the number of hours you worked, or the yearly salary received and divide that number by 52 to determine your average weekly wage (AWW) and lost compensation involving your work hours.
Include Any Other Income Sources and Company Perks
Next, add any other sources of income you might have. Let’s assume you have another job where you make $200 per week or $10,400 annually. Accurately determining lost wages will include this amount in addition to your base salary that’s lost due to your injuries involved in the accident.
Paid an Annual Salary? How Much Money Would You Lose Yearly?
You probably know that paying employees monthly rather than annually costs less. But did you know that it could cost you thousands of dollars over the course of a decade?
Some people make up to $100,000 per year working part-time. Other people work full-time without getting paid enough to cover basic expenses like rent, food, and transportation.
Lost Income for the Self-Employed, Sole Proprietor or Independent Contractor
If you are self-employed, you might consider filing a lost income claim. If you work full-time while self-employed, you probably earn enough to cover most of your expenses.
But if you’re working part-time, you could still lose some money.You need to know the following three things about lost income claims and being self-employed.
How do I file a lost income claim?
You can file a lost compensation claim with the state workers’ compensation board. This injury claim process usually takes less than 30 days after proving lost income based on your yearly salary and missed work.
What happens next?
The insurance company will pay your medical bills, disability benefits, and temporary total disability payments to resolve your car accident claim. They’ll also give you a lump sum payment based on what you’ve lost in earnings, including overtime hours, future losses, and any additional work hours missed to cover all economic and non-economic damages.
Can I file a lost income case without knowing how much I’m owed?
You can file a lost wages claim even if you don’t know exactly how much you’ll receive. Your attorney will help determine the significant amount of your lost benefits based on your annual salary or hourly wages.
Lost Earning Capacity
A lost earning potential claim is challenging to win. A plaintiff must show that they suffered a serious injury that resulted in permanent disability and caused them to lose the ability to earn income.
A case is usually brought against employers, insurance companies, and third parties such as car manufacturers. If you believe you have been wronged in being compensated for your lost earning capacity based on your hourly wage or an annual salary, call a personal injury attorney from our law office (888) 424-5757 for a free case evaluation.
Proactive Steps to Avoid Future Income Losses
If you are involved in a car accident, you may want to write down everything that happened. You could use a post-accident journal to record important things like how fast you were driving, where you were, and what road conditions were like.
Make a notation if you were driving a company car alone or with other workers, the extent of the property damage, the amount of your lost earnings, how long you missed work, the number of hours, and your medical expenses.
They’ll know the best course of action based on the circumstances surrounding your lost wages claim due to your car accident injuries.
A settlement agreement is a contract between both parties. It outlines the terms under which each party agrees to compensate the other. Once you sign it, you cannot change it without getting written permission from the other side.
Personal injury cases usually go through several phases before they settle.
- Discovery — collecting evidence, such as medical records and police reports.
- Negotiating — the insurance companies start negotiating with the plaintiff’s attorney.
- Entitlement — the court decides whether the plaintiff is entitled to damages.
- Finalizing — the judge sets the amount of money the defendant must pay.
Calculate Lost Wages Involving Overtime Compensation
The Fair Labor Standards Act (FLSA) requires employers to pay time and a half of an employee’s regular hourly rate for hours worked over 40 per week. However, there are exceptions to this rule.
For example, an employer doesn’t have to pay overtime if it pays an employee less than $455 per week ($23,660 annually). Also, an employer isn’t required to pay overtime if the employee works fewer than 20 hours per week.
In addition, salaried employees aren’t entitled to overtime pay. Instead, they are paid an annual salary, including health insurance benefits. In general, overtime is not considered part of a salaried employee’s base pay. This makes sense because overtime is typically unpaid.
Healthcare, 401k, and Benefits
- Short-Term Disability – An employee who suffers a job-related injury is entitled to receive short-term disability benefits while recovering from the injury. Short-term disability is typically paid for up to 26 weeks.
After 26 weeks, you are no longer eligible for short-term disability. If you do not qualify for short-term disability, you may be able to obtain long-term disability insurance.
- Long-Term Disability – This plan pays a monthly benefit if the employee becomes disabled and unable to perform his or her regular duties. You pay monthly premiums; the amount depends on how old you are and whether you have dependents.
Typically, the maximum length of payment under this policy is 24 months. If you are still receiving payments and other benefits after 24 months, you may be required to purchase supplemental life insurance.
- Retirement Plans – Many companies offer retirement plans such as pensions, profit sharing, and stock options. These plans are designed to help employees save money for retirement. Most people contribute to these plans, and many employers match the contribution.
Have You Lost Wages Due to a Car Accident? Get Legal Help Today
If you’ve been injured due to someone else’s negligence, it’s important to understand how much money you’re entitled to receive when recovering lost wages. A personal injury lawyer will help you calculate the income lost and what you deserve based on the facts of your car accident claim.
Determining lost wages often involves calculating the difference between your current income and your previous earnings based on your employment history, business records, bank statements, and income tax returns.
This calculation might include figuring out how many hours you worked per week, how much you earned per hour, and how long you were employed before the accident as an hourly or salaried employee or if self-employed.
Our personal injury law firm can help you accurately calculate total lost wages and prove that you suffered injuries due to another person’s negligence.
Contact our office at (888) 424-5757 or use the contact form to schedule a free consultation if you believe you’re owed some additional compensation through a car accident claim.