After a personal injury accident, you may need to take time off work to recover. In some cases, your injuries could prevent you from returning to your job permanently or reduce your ability to perform your role as you did before the accident.
If your injury was caused by another party, you are entitled to seek compensation for the wages you have lost as part of your personal injury claim. Filing a lost wages claim can help you recover income you’ve already missed and any future earnings you might lose if your injuries limit your ability to work.
Learn more about your rights to compensation for lost wages after an injury in California and how a skilled attorney at Avian Law Group can help you calculate your losses to secure full compensation.
Lost wages in a personal injury case refer to the income you were unable to earn due to your injuries. These losses fall into two main categories: lost wages and lost future earning capacity.
Lost wages: These represent the income you could not receive because your injuries prevented you from working. For example, if you had to take two months off work to recover from a car accident, the salary for that period would be considered lost wages.
Lost future earning capacity: This refers to the income you will no longer be able to earn due to long-term disabilities or limitations caused by the accident. For instance, if a back injury from an accident forces you to take a lower-paying job, the difference in your earnings would represent your lost future earning capacity.
Calculating lost wages involves determining how much income you missed out on due to your inability to work after the accident. It’s essential to ensure that these calculations are accurate to receive the compensation you deserve. Here are the general steps for estimating your lost wages:
Gather Documentation: Collect pay stubs, tax returns, and employment records to confirm your typical earnings before the accident. For example, if you usually earn $1,000 per week, several pay stubs can be used to establish this as your regular income.
Calculate Time Missed: Figure out how many workdays you missed while recovering from your injuries. If you missed 10 workdays and work 8 hours a day, this would amount to 80 hours of lost time.
Determine Total Lost Wages: Multiply your daily wage by the number of days you missed. If you earn $200 per day and missed 10 days of work, your total lost wages would be $200 x 10 = $2,000.
Consider Other Income Losses: Don’t forget to include other income you missed, such as tips, bonuses, or commissions. For example, if you regularly earn $100 in tips each week, add this to your total lost wages.
Evaluate Future Earning Capacity: For more complex cases, you may need to assess how your injury impacts your future earning potential. This could involve changes to your career prospects or limitations on job opportunities. Working with an economic expert can help estimate these long-term losses.
In California, the statute of limitations for filing a lost wages claim is the same as for any personal injury case. Generally, you have two years from the date of the injury to file your claim. If the injury was not immediately apparent, you have one year from the date of discovery to file your claim.
When you receive compensation for lost wages in a personal injury settlement, it may be subject to taxes from the IRS and the State of California. Here’s how taxes could apply to your lost wages:
Federal Income Tax: Generally, lost wages are taxable, especially if they are intended to replace your regular income. However, compensation for physical injuries or sickness is not typically taxed. Non-physical damages, such as emotional distress or punitive damages, are usually subject to taxation.
State Income Tax: The California Franchise Tax Board (FTB) also taxes lost wages compensation as income. Therefore, you may be required to pay state income taxes on the lost wages portion of your settlement.
Since lost wage settlements are considered a replacement for taxable income, it’s important to consult a tax professional to fully understand your tax obligations.
To successfully claim lost wages, you will need to provide evidence that supports your claim. This may include:
Employer Letter: A letter from your employer verifying your wages, job title, and the dates you missed work due to your injury.
Pay Stubs and Tax Returns: Recent pay stubs and tax returns can help establish your typical earnings before the injury.
Sick Days and Vacation Time: Records showing any paid time off you used as a result of the injury can demonstrate financial loss.
Promotions and Career Path: Performance reviews or documentation of potential promotions can show lost future earning opportunities.
Bonuses, Commissions, and Overtime: Historical data from past pay periods can highlight extra income you missed out on.
Self-Employment: If self-employed, submit financial records, invoices, or contracts to prove your usual earnings.
Retirement Benefits: If your injury impacts long-term income, you may also need to provide documentation like 401(k) statements to show how it affects your retirement savings.
If you were injured at work, you might be eligible for workers’ compensation rather than pursuing a lost wages claim through a personal injury lawsuit. Workers’ compensation typically covers:
Medical Expenses: All necessary medical treatments related to the injury.
Lost Wages: A portion of your wages, usually around two-thirds of your weekly income.
Rehabilitation Costs: Any costs associated with retraining or rehabilitation if you are unable to return to your previous job.
Unlike personal injury claims, workers’ compensation does not require proving fault. However, it also does not cover damages for pain and suffering. A personal injury attorney at Avian Law Group can help determine whether a lost wage claim or workers’ compensation is appropriate for your situation.
If you’ve been injured in an accident, such as a car crash or slip and fall, filing a lost wages claim can help you recover the income you’ve missed and protect your financial future.
A comprehensive wage loss claim covers both the wages lost during recovery and any future earnings affected by the injury. Working with an experienced attorney at Avian Law Group can help you secure a settlement that fully compensates for your lost income, ensuring you are financially protected moving forward.