What To Know About Lost Wages After An Accident

What to know About Lost Wages after an Accident

by Susan — 3 years ago in Health 3 min. read

If you’re in a car accident, you may miss work because of your injuries. Lost wages can be difficult to recover from, particularly if you’re out for an extended period.

Lost wages, including current and future, are considered economic damages. If you file a lawsuit after an accident, the goal is to pursue damages, including these economic damages.

The objective of a personal injury lawsuit is to get you to the financial position you would have been in if the accident didn’t occur.

So specifically, what should you know about lost wages after a car accident?

What Are Lost Wages?

Lost wages refer to money you would have earned working for your employer from the time of your accident to the date when you receive a settlement or judgment.

If you file a lawsuit to recoup lost wages, the injuries that are keeping you out of work had to have come from the accident you were in and not an event before.

You may be able to recover the wages you would have theoretically earned were you not out for medical treatment and recovery.

There are distinctions between the concepts of lost earning capacity and lost compensation to be aware of as well.

Lost earning capacity relates to a disability that diminishes your ability to work.

Lost compensation refers to lost wages, and other financial benefits you would have earned were it not for your accident.

When we talk about injuries lead to lost wages, we’re most often talking about a physical injury, such as a broken leg.

You may also have psychological injuries, however, like PTSD. If severe enough, this could mean you have grounds to recover lost wages.

Some employers offer benefits like paid time off and sick days. If you use your paid benefits to maintain an income while you’re out of work, you may still have compensation available.

What If You’re Self-Employed?

So what if you’re in an accident and your injuries keep you from working for a period of time, but you’re your own boss? What happens then?

You may still be able to get compensation for lost wages and income.

With that being said, proving losses tends to be more challenging.

If you work as an independent contractor or own your own business, you likely have a fluctuating income.

You’ll need to be able to show that you lost income and also the extent of what you’ve missed due to your injury.

Some of the documents you’ll likely need to show include your prior year state and federal income tax returns and your 1099s and tax forms.

You’ll probably have to show proof of the projects or work you’ve had to cancel because of your injuries and your bank account statements.
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Demonstrating Your Injury

If you file an insurance claim or personal injury lawsuit for a financial award, you’ll have to demonstrate your injury.

The insurance company and defendants will be working against you, and they’ll want to reduce the compensation you receive as much as they can.

You’ll need to have a medical professional involved, who will go over your records and learn a bit more about your job.

They’ll be looking at how your injuries compare to the type of work you do and how they could directly impact your ability to work.

You’ll need medical records to supplement what your doctor says, and the more you’re able to show how severe your injury or injuries are, the more likely you are to recover money for lost wages.

You’ll need to show things relating to your job too.

For example, you’ll need a letter from your employer, time cards, or timesheets if applicable, pay stubs, and income tax returns.
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Temporary or Permanent Disability

If you have a temporary or permanent disability, then you should receive compensation for what’s known as a reduced earning capacity.

Lost wages are based on something specific and something that can be identified and calculated.

Lost earning capacity is more subjective. Lost earning capacity looks at the full impact of your ability to work and earn a living after an accident. These are a projection of future losses.

It’s more challenging to prove lost earning capacity since they do require making predictions.

Your lawyer would need to show the defendant was responsible for the accident because of their negligence to recover any of these losses.

They would then need to show that the actions of the defendant led to an injury that then caused you to have lost earning capacity.


Susan is an avid writer, traveler, and overall enthusiast.

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