If you have lost time from work due to accident-related injuries, you may be able to seek reimbursement for reasonable lost wages. Generally, lost wages are measured by the amount of wages you would have received if you had not missed work due to the accident. This means that lost wages are dependent on your inability to work as a result of the accident and not necessarily on the time you missed from work as an indirect consequence of the accident.
When asserting a claim for lost wages, it is essential to support all allegations, contentions and demands for reimbursement for lost wages with appropriate documentation and evidence. Furthermore, the documentation and evidence will need to be complete and consistent with the treatment that has been rendered by your medical providers showing that you are unable to work.
This article will assist you in making your claim for lost wages when you are an employee of a company or a person; in other words, when you are not self-employed or the owner of the company. To learn more information on how to claim lost wages when self-employed, or as an entrepreneur or business owner, please read our article on the subject.
An at-fault driver is responsible, under the law, for compensating you for those damages proximately caused by their negligence, which includes certain lost wages. Lost wages include all the time away from work for both medical treatment and time missed due to physical incapacity to perform your normal work tasks. In order to establish lost wages, you will have the burden of proving all the necessary elements of the damages stemming from your injury. This claim will have to be presented to the at-fault party’s insurance claims adjuster. Failure to adequately prove your claim will prevent you from recovering lost wages.
Before you can seek any form of recovery, you must first be able to prove that the at-fault party was negligent, and therefore responsible for your damages. For more information on the concept of negligence, please read Negligence. Proof of damages for lost wages will require documentation and evidence of the following:
Although you may feel like you cannot work after an accident, without the proper documentation and supporting evidence from your employer, a claims adjuster will almost always deny or drastically reduce your lost wages claim. Therefore, you should seek written authorization for each day you miss work from your medical providers to show that the absence was medically necessary and the lost wages are related to the injuries caused by your accident. The written documentation, or doctor’s note, should come from the medical physician treating you for injuries sustained in the accident, and it should describe your injuries, your need to miss work and how much work the doctor believes should be missed.
Please be sure that your doctor’s notes accurately document your inability to work or perform your usual duties. Additionally, the medical provider who actually treated you should provide your doctor’s note to you. For instance, an emergency room doctor, a primary care physician or a chiropractor who treated you for your injuries can write you a note for every day that you are to miss work. Be sure to review the details and language of the doctor’s note. Here is a sample doctor’s note that we feel would support a lost wages claim effectively.
The treating physician’s note(s) should include the date for every day you are out of work. The doctor’s notes should be written on the medical provider’s formal stationary or medical pad, if possible. Generally, the medical provider’s notes should include information such as the dates you are to be out of work, dates of treatment, injuries sustained and a projected date for return to work.
Important: Just because you and the doctor discuss taking a bit of time off of work does not necessarily mean that the doctor has taken note of this conversation in your medical records. Always ask the doctor to make sure that they include their recommendation in writing in both your medical records and in an out-of-work note that is given directly to you.
How you are paid by your employer, meaning by the hour, salary or on a commission basis, will have to be taken into consideration when you determine lost wages. Depending on your particular employment situation, you may also be able to claim vacation pay and sick pay taken as a result of your accident as well. Claiming lost wages or loss of income as an employee is significantly less complicated if you are employed as hourly or salaried, as opposed to being employed on a commission scale. Commission-based pay is often considered speculative by insurance adjusters and based on numerous uncontrollable variables. It is important to understand that your current pay, regardless of how or what you were paid at the time of your accident, should be used as the basis for which you determine your lost wages. Listed below are the different ways to determine and calculate your lost wages.
Generally speaking, when you are paid by the hour or are salaried, calculating your lost wages is relatively painless. Essentially, you add up the number of hours you were unable to work due to your injuries and multiply the number of hours by your hourly wage. For example, if you make $10.00 an hour, and due to your injuries, you miss 32 hours of work (4 days of a 40-hour work week), you will be able to claim $320.00 in lost wages ($10.00 x 32 = $320.00).
Important Note: The general rule of lost wages is that the number of hours you miss from work should coordinate with the number of days written out of work by your treating physician. In other words, if you are written out of work for only 3 days, you should only claim 3 days worth of lost wages.
If you are paid on a commission basis, proving your lost wage claims will be somewhat cumbersome as the amount can be speculative in nature. In other words, commission-based pay is not a sum certain amount (definitive amount) as is being paid by the hour; therefore, more information will be needed in order to support your lost wages claim.
In most commission-based lost wages claims, the lost wages can be established by looking at your past earning record or history. This can be accomplished by reviewing the last year’s figures during the same time period and averaging them out for the time you missed from work. Past income tax returns and copies of commission checks or pay stubs over the past year or two can all be beneficial in supporting your claim for lost commission. However, this can be difficult if you were injured after starting a new job and therefore have no or limited earning history.
Remember, you will still need to provide standard lost wages evidence to support your lost wages claim. This includes written doctor’s notes that state your injuries and the times and dates you are to miss from work.
The following illustration should help provide a better understanding on how commission-based lost wages are typically calculated.
Let’s assume that you are paid through commission and are written out of work by your doctor due to an accident. In order to calculate the lost wages for the two weeks of missed work, you will need your old W-2 forms from the previous year or years and, if possible, pay stubs that coordinate with the same two weeks from last year’s tax season. Using the W-2 forms, you should take an average weekly base pay for the same quarter of last year’s tax season. In other words, if you missed two weeks in February 2016, you should take an average between the months of January through March of 2015 (3 months).
Important Note: Be aware that certain adjusters will award lost wages but withhold a portion of those funds, claiming that amount is needing to be withheld for “taxes.” Your claim for lost wages should seek reimbursement for all wages lost, not just the money you would have received after taxes. In other words, a claims adjuster should not take into account any taxes when reimbursing you for your lost wages. With this being said, you should always speak with a certified accountant about your settlement after you have received it, as lost wages are generally taxable.
In order to support your lost wage amount, you will need some form of wage verification from your employer. The wage verification should be provided by your employer, with the proper signature (manager, supervisor or higher), and include information such as: the dates you missed work, the hours you were scheduled to work on the days you missed, the amount of money you would have made if you had worked the days you missed and a breakdown of your pay, whether salary, hourly or commission).
The wage verification form will provide the claims adjuster with proof of your base pay and the days you actually missed from work. Go here to view a lost wage verification form or to download a copy.
Important Note: A lost wage verification form does not necessarily guarantee that a claims adjuster will accept the amount your employer notes as your lost wages. Your medical records and out-of-work doctor’s notes will also be necessary as evidence in addition to this form.