Lost Wages and What’s Recoverable in an Injury Claim

When understanding “lost wages”, don’t confuse it with “lost earning capacity.” All amounts lost in the past resulting from a personal injury are ‘lost wages.’ It covers all losses you suffered up till the date of the trial or settlement. On the other hand, “lost earning capacity” refers to the income you will no longer be able to earn in the future as a result of your injury. In this case, it means income may be forfeited in the future due to an injury or accident and is also recoverable in the state of California.

However, you should be able to prove the lost earning capacity for the future, which can be a lot more challenging than showing lost wages of the past. You can rely on facts to recover ‘lost wages,’ but when it comes to recovering ‘lost earning capacity,’ who knows whether you’d still been working at a particular company in the future, had you not been injured?

Even if you somehow manage to prove that you’d be working somewhere in the foreseeable future, the court will require testimonies from a medical expert to be able to recover future regular pay, bonuses, and increments.

Filing the Claim for Lost Wages in California

The statute of limitations in California, that is, the amount of time you have to file a claim for lost wages in the state is generally two years. However, this can vary for some types of injuries, for which the period can be shorter or longer than two years. For instance, if you were injured as a result of medical malpractice, you may only have one year to file your claim for ‘lost wages.’

When filing your claim, the earnings you claim to have lost must be supported by evidence. The calculation of the claim is straightforward if your injury lasted for a fixed, short period. But again, a testimony from a forensic occupation or accounting expert will be needed to calculate expected lost earnings, such as when you were due for a pay raise or a performance-based increment. While it is not necessary, but you may even be able to recover prejudgment interest on certain types of lost wages.

How to Prove Lost Wages?

When it comes to accident claims and insurances, California is an at-fault state. If another driver injured you in an accident, you would need to file a claim for lost income through the at-fault driver’s insurance company. The state requires all drivers to carry a minimum of $15,000 in liability insurance coverage to pay for bodily injury per person. Both your lost wages and medical bills will be reimbursed from this coverage mandated by California’s bodily injury policy.

When filing a claim for lost income, you will need to submit various documents to the insurance company. Thus, make sure you gather the required documents before filing your claim. Remember, in all circumstances; you need a letter from your doctor portraying your injuries, including an explanation of how long those injuries prevented you from working. You can’t just take time off without a doctor’s letter and expect to be paid for the lost income. Then you can consider the following different ways to prove your lost wages:

Letter from your employer

If you have regular employment, you can easily prove your lost wages by requesting past payslips and a letter from your employer.

The letter should include:

• Your job title
• Your date of joining the company
• Your standard working hours per week
• The regular wage rate or frequency of pay
• The rate for overtime
• The number of overtime hours you usually worked per week
• And the following injury-related information:
  • Whether you were an employee at the company at the time, you sustained the injuries
  • The number of hours or days you missed work due to the injury
  • The number of vacation or sick days you had to utilize to receive medical treatment
  • All amounts you expected to receive a commission, bonuses, overtime during the time you missed work
  • Other benefits or perks you were entitled to receive during the time you missed work

Tax Returns and Past Pay stubs

If, for some reason, you cannot get a ‘lost wage letter” from your employer, or if you’re self-employed, you can prove lost wages by submitting other documents such as those pertaining to your income tax returns or past pay stubs. You can easily request past tax returns from the Internal Revenue Service by using the IRS Form 4506. To request California tax returns copies from the California Franchise Tax Board, use the Form FTB 3516.

If you didn’t keep a record of your past pay stubs, a California personal injury lawyer could obtain them for you. If you are self-employed, you will have to prove the amount you could have made during the time you missed work due to the injury. In addition to the tax return statements, you will need to present past billing statements. In case your income is seasonal, you can prove your lost income by submitting the billing statements for the same period for preceding years.

The higher and complicated your expect income from self-employment, the more difficult it can be to prove your lost earnings. Again, a testimony from a forensic accounting expert will be required to verify your point.

Seeking Legal Assistance

Now you’ve learned what the state of California allows you to recover both your lost wages and lost earning capacity is possible in Sacramento. A personal injury claim, as we’ve described, you’ll now be knowledgeable of what will need to be proved concerning lost income when filing a claim for lost wages.

However, things aren’t as simple as they seem. It can be notoriously tricky to work with insurance companies that will attempt to pay you as little as possible. There also may be other issues that weren’t covered here that could impact your case. That’s why it’s always wise to seek the counsel of a specialized Sacramento, California personal injury attorney like the professional lawyers at Phoong Law Corp.

Schedule an initial free consultation to discover what your case is worth. When you work with Phoong Law Corp, they do not charge a fee unless they win your case.