By Francis M. Smith
When you are pursuing a claim to seek compensation for injuries you suffered in an accident caused by someone else, it's important to make sure that you include in your claim all the economic losses that you suffered due to your injuries. The unpaid medical bills that have piled up from the treatment your injuries received may be extensive, but they still don't show the whole picture of how much your injuries have cost you financially. You have a right to seek compensation not only for the money your injuries forced you to spend, but also the money your injuries prevented you from earning. Lost income represents a category of injury damages that encompasses both earnings missed at your current employment because you were hurt too badly to work or needed to attend medical appointments, and potential earning opportunities that you were unable to pursue due to your injuries.
If you have a regular full- or part-time job working for an employer, your lost income is fairly easy to You are only allowed to recover "net lost wages"- meaning your lost wages minus any disability payments you may have received. In order to obtain records of your lost wages for your settlement negotiation or injury lawsuit, you or your attorney can ask your employer, supervisor, personnel department, or other relevant party at your workplace to compose a letter using company stationery detailing your missed time. This document should include your full name, position or job title within the company, your rate of pay, your typical work schedule, and the amount of time (in hours or days) that you were out of work following your accident. This letter will serve as evidence of the employment compensation you would have received if you had not been hurt.
Many companies offer their employees some amount of paid time off, in the form of sick leave, vacation time, or a generalized PTO pool that serves as both. If you used any of this time to cover part or all of the period you were unable to work because of your injuries, this does NOT mean you need to subtract that time from your lost wages calculation. Paid sick leave and vacation time are part of the employment compensation your employer pays you, and if you had not needed to use that PTO because of your injuries, you would have had it available for family vacations or flu season. Using up this paid time for your injuries is treated as lost compensation, just as if you hadn't been paid at all.
If you work a seasonal job, are self-employed, or have an otherwise non-standard form of employment, it can be a little more challenging to document your lost wages than if you had a regular schedule, hourly wage, and employer. In this case, you can use any form of documentation of your earnings that you have available – invoices and billing statements, payment records, and the like. Perhaps the most reliable and complete method of proving your earnings, if you have been in the same business for several years, is through the use of your tax records. If your earnings are relatively consistent from year to year, you may only need to provide your most recent personal income tax information (a W-2 form or in some cases a tax return). On the other hand, if the past year was particularly bad for your business, you may wish to provide a few years' worth of information to give a more complete view of your customary earnings. Remember to safeguard your privacy when presenting tax information as evidence: the only part of your tax return relevant to these proceedings is your annual gross income. Anything else – exemptions, tax deductions, and the rest – are private and none of the insurance company's business.
When you are calculating the total value of your injury claim to make or evaluate a settlement offer, remember that lost income is separate from the medical costs of your injuries, and does not factor into calculations for non-economic losses such as pain and suffering. Non-economic damages are sometimes assigned a multiplier, which is applied to the medical expenses associated with your injuries, and other economic losses – including lost wages and property damage – are added on after the multiplier is factored in. For instance, if you were in an accident that inflicted “hard injuries” like a concussion or broken bones, your pain and suffering multiplier might be four times the amount of your medical costs. Say your doctor bills total $4000, and your lost wages add up to $1200. Your damages calculation for all these losses would be ($4000 x 4) + $1200, or $17,200. From there, your settlement figure could go up or down, depending on other factors in your case. Note that in many insurance companies, multipliers have been discarded in favor of complicated computer algorithms, dependant on the information fed to the computer software by the adjuster.
If you or a loved one have been injured in a serious accident, please contact me or call me at 908-233-5800 for a free consultation.