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Lost wages is a loose term used to describe the lost income resulting from a personal injury.
It can include lost salary, lost overtime, lost bonuses, lost vacation/sick days, lost perks (i.e. cell phone, car, gym membership, etc.), lost business profits, lost commissions, and similarly quantifiable and provable lost income.
1) What are lost wages?
Yes, lost wages include lost income from commissions to the extent they can be proven.
Proving commissions can be difficult, though, since their very nature depend on the happening of an event.
Insurance adjusters and defense attorneys will immediately argue that commissions are speculative. So, it’s important to provide proof of a reliable history and pattern of past commissions to justify any claim for commissions lost from a personal injury.
2) Do lost wages include lost commissions?
Yes, lost wages include self-employed business losses, such as lost profits, lost contracts, lost goodwill, lost business opportunities, and increased expenses.
However, the very nature of these claims can be ripe for dispute.
Often, you’ll need a forensic accountant to review the business’s financial paperwork to provide reliable testimony as to business losses.
3) Do lost wages include self-employed business losses?
The at-fault person’s insurance company should be responsible for paying lost wages, and they should not refuse to do so.
However, they are entitled to proof of lost wages before paying them.
4) Do insurance companies pay for lost wages?
Typically, lost wages are calculated by reducing your income to an hourly wage and multiplying this amount by the number of hours missed from work. This method is only helpful if you have only missed a few days from work.
Calculating lost commissions will depend on the credibility of proof you can provide.
And, calculating self-employed business losses involves a much more complex analysis that often requires a forensic accountant.
5) How are lost wages calculated?
Your lost wage claim also includes any sick leave and vacation pay that was used as a result of your injury.
Many victims use sick leave and vacation pay when they miss work as a result of a personal injury.
These days are used in order to continue receiving a paycheck. Just because you are still able to recover a pay check, you’re still forced to use other benefits – i.e. sick leave and vacation pay.
6) Do lost wages include my sick leave and vacation pay?
Most often, lost wages for hourly employees can be proven by providing a lost wage verification, stating the time missed from work and the hourly rate.
Other methods of proof can include:
prior pay stubs;
tax returns or similar records;
contracts of employment;
proof of special projects that would have increased pay;
7) How do I prove lost wages?
A lost wage verification is a form completed and signed by an injured employee’s supervisor (or qualified human resources representative), that itemizes the time missed from work as well as the hourly rate of the employee’s time.
8) What is a lost wage verification?
You are not required to disclose tax records in order to prove you have suffered lost wages. Instead, Georgia allows you to prove lost wages by other means, such as through testimony, pay stubs, and lost wage verifications.
9) Am I required to disclose my tax returns to recover lost wages?
Loss of future earning capacity is another legal term used to describe your lost future wages.
It is a bit more harder to prove than proving past lost wages. That’s because you are trying to project your ability to work as well as possible earnings to some point in the future.
10) What is loss of future earning capacity?
You can recover for lost future wages to the extent they can be proven.
Future lost wages usually involve one of three claims:
permanently unable to work in any profession (i.e. brain injury victims);
not being able to work in the same type of specialty to which you are trained; or
reduced expected work life.
Lost future wages cannot be speculative. So, even if you’ve suffered a pretty bad injury, you cannot simply assign an arbitrary number to this amount, even if it’s self-evident that the injury will impact your employment status and future work abilities.
11) Can I recover for future lost wages?
Future lost wages are best demonstrated by the use of expert testimony. As you can expect, future lost income not only considers past income.
It also takes into consideration other aspects such as career-advancement opportunities, promotions, and increased wages.
As a starting point, a medical professional can provide expert opinions as to your practical limitations. Further, they can place a value on your disability as a result of the injury.
For instance, are you temporary and partially disabled, temporarily but totally disabled, permanently and partially disabled, or permanently and totally disabled? A medical expert to make these determinations and place a number value on the disability.
An economist expert, can use your prior work history as well as to help project future potential earnings if you had never been injured.
Finally, a vocational expert can provide opinions as to your post-injury earning capacity. When compared to your future potential earnings had you not been injured, we can prove future lost wages.
12) How do I prove future lost wages?
Some factors that can influence the value of potential future wages include:
Your prior profession (and benefits);
Expected work life;
You skills, talents, and abilities;
Availability of other work;
Current market values/rates; and
History of promotions, raises, trainings, and other advancements.
13) What factors can influence my proof of future wages?
14) Can I recover future lost wages if I'm only partially disabled?
Yes, you can recover future lost wages for a partial disability to the extent you can show that the disability has affected your future earning capacity.
Again, this likely requires an expert to provide opinions on your disability after reviewing your medical records and other evidence and data.
15) Can I recover future lost wages if I'm only temporarily disabled?
Yes, you may be able to recover future lost wages for a temporary disability.
A temporary disability is one that is expected to resolve so that you are no longer disabled.
If you are expected to miss work in the future until your disability is resolved, then you may be able to recover for those lost wages, as long as they are not speculative.
16) What is loss capacity to labor?
Loss capacity to labor is an item of general damages different from lost wages and loss earning capacity.
It is used to compensate injury victims who were not employed or were unable to hold a job at the time of the injury.
For instance, this may apply to a stay-at-home spouse who takes care of the daily household duties while the other spouse earns a paycheck at a job. Although the stay-at-home spouse does not earn a paycheck, their services are still valuable. Since their permanent damages and disabling injuries cannot be neatly and objectively quantified with “lost wages,” these damages are dignified in the form of lost capacity to labor.
17) If I'm not employed, can I still recover lost wages?
Yes, but only to the extent you can prove that there was a probability of future employment, but for the injury.
For instance, if you had accepted an offer to work but had not started. Or, you were actively applying and were only unemployed for a brief period.
In the case of unemployed students, it’s also pretty easy to prove a probability of future employment. This is done by comparing the employability of similarly situated students.
Alternatively, you can claim damages in the form of lost capacity to labor.
18) Am I required to mitigate my lost wage claim?
Generally, you will be expected to mitigate any lost wage claims, if possible.
This could mean seeking vocational rehabilitation or pursue alternative career opportunities if you can no longer work in your current field or profession.
This also means you are expected to seek the medical treatment recommended by your physician in order to avoid prolonging a treatable disability.
19) Can I collect disability insurance and recover for a claim of lost wages?
You can collect disability payments and still recover for a claim of lost wages, but the law does not reward windfalls.
So, you can’t double-dip and receive compensation that exceeds your actual lost wages.
After you receive an award for lost wages, you’ll likely be required to reimburse the disability insurance to the extent they have paid benefits.
Usually, disability benefits only pay a fraction of the wages you could have made (typically 60%). Also, disability benefits usually expire after a certain period of time, so you are entitled to full lost wages to the extent disability insurance does not cover the period of missed time from work.
20) Can I collect workers compensation and recover for a claim of lost wages?
You can collect workers compensation wage payments and still recover for a claim of lost wages, if your injury resulted from a third-party’s negligence that is not excluded under the workers compensation statute.
Like disability benefits, the law does not reward windfalls. So, you can’t double-dip and receive compensation that exceeds your actual lost wages.
After you receive an award for lost wages, you’ll likely be required to reimburse the workers compensation insurance carrier to the extent they have paid benefits. Usually, workers compensation benefits only pay a fraction of the wages you could have made (in Georgia, 66%).
Also, workers compensation benefits usually expire after a certain period of time, so you are entitled to full lost wages to the extent workers compensation insurance does not cover the period of missed time from work.
21) Are lost wages taxable?
Wheale Law Firm is not qualified to give tax advice, and we strongly encourage you to consult with an accountant or tax attorney on your specific case.
However, since wages are normally taxed, we expect that any compensation you receive for lost wages to be taxable.