Injury victims are almost never prepared for the outcome of a motor vehicle collision. One minute you’re driving during rush hour, and the next, your whole life is upended. Before you know it, you’re left with severe injuries and unable to return to work for an extended period. Then, you’re left with unimaginable medical bills and lost wages due to your accident injuries.
Missing work is arguably the worst outcome of a car crash. If you’re lucky to escape a car accident unscathed or even with minor injuries, you might be able to get back on track rather quickly. Sadly that’s not always the case. Many accident victims sustained severe injuries that restricted them from earning a living.
Being unable to return to work after an accident can feel like all your hard work is going to waste. It can be especially troubling for someone who is the sole provider for their family. The good thing is that if you are in a car accident that another negligent driver caused, you can seek financial compensation in Colorado. In addition, you are entitled to file a lawsuit and claim the lost wages from accident-related injuries under Colorado law.
The claims process, or a court proceeding, can be challenging. Unlike a claim for medical expenses, proving lost wages can be more challenging. Rather than trying to navigate tricky affairs alone, the best thing to do is contact a Denver car accident lawyer. That is the best way to secure yourself a fair outcome.
What Kind of Wages Can You Recover Compensation for After a Colorado Car Accident?
Often there is some confusion regarding what exactly you can claim as “lost wages.” That’s because many people don’t understand what they can claim as lost wages in a personal injury lawsuit.
Wages include all the payment you would have received from your workplace if you were not injured. In addition to your salary, lost wages can entail any bonuses, commissions, and even any reasonably expected payment during your missed work period.
Consider the following examples. If you were making $20/hour at your job when you got into the accident, you could claim that amount. However many missed work hours you had due to your injuries, you would be able to claim. You can also claim for:
- a special bonus you missed
- a lost promotion
- or any overtime pay for hours you would have worked
You don’t necessarily need to be in regular employment to recover lost wages. You can be self-employed or make your earnings primarily through tips and still claim for lost wages. The bottom line is that you can claim for any wages you would have legitimately earned if you were not injured by the accident.
Are Lost Wages the Same as Lost Earning Capacity?
Not necessarily. Lost wages and lost earning capacity are two different damages. Lost wages would cover the money you would have earned during the injury period. On the other hand, lost earning capacity anticipates a loss of earning capacity in the future. So, for instance, if you used to work 8-hour shifts every day but can only work 4-hour shifts, after the accident, you have lost earning capacity.
By law, you could claim compensation for the lost hours you would have been able to work had it not been for the accident. So, lost wages are those you can claim for salary, paychecks, and any earned income you could not receive due to missed work hours. “Lost earning capacity” is what you can no longer earn due to your accident injuries, including future potential income.
It’s usually more difficult to prove learning earning capacity than to prove lost income or wages. That’s because it usually requires an expert, such as a medical specialist or occupational therapist’s testimony. They would need to testify on your behalf to support your injury claims and show that it caused your lost earning capacity.
How Do I Prove Lost Wages for Multiple Sources of Income?
After a Colorado car accident, you must gather solid evidence to prove your lost wages. That’s the only way to secure competition for lost wages. Proof of lost wages is pretty straightforward. For example, if you usually work 40 hours a week and missed a month, you could calculate your lost income by multiplying the hours you missed that month by your hourly rate.
However, it can get more complicated if you are trying to claim for additional losses such as the following:
- Lost Performance bonuses
- Lost tips
- Missed opportunity for career advancement
- A raise you missed while you were out of work injured
- A raise you reasonably expected before the accident
- A promotion you were expecting before the accident
You will need to provide clear and convincing evidence of these circumstances. Then, with the full burden of proof, your Denver personal injury lawyer might enlist experts to testify on your behalf. Such experts might include occupational therapists or forensic accountants. They can help demonstrate that your career trajectory was affected by your accident injuries. Basically, you need to prove that your injuries resulted in your future lost earning potential.
Types of Evidence to Help Your Claim for Lost Wages after a Colorado Car Accident
A Letter From Your Employer
A letter from your employer indicating your salary or hourly rate is a great proof. It’s also the easiest way to prove lost wages. You can ask your employer to write a letter clearly stating the following:
- Your name
- Your job title
- How long you have been working with the company
- Your hourly rate or salary
- Your last raise or any expected raises
- If you missed a raise while you were out due to injuries
- Any overtime you would have worked and the overtime rate
- Any other relevant information to prove your lost wages
Previous Pay Stubs
It might be difficult for some people to get a letter from their employer. If that’s the case, you can also obtain your past pay stubs to provide proof. If you haven’t kept copies of your paychecks, your Colorado personal injury lawyer can help you obtain copies.
Prior Tax Returns
Tax returns from prior years can also be a good way to prove your income. It’s an official document showing exactly how much income you made over the last year and all of your expenses. Tax returns might be one of the best ways to prove your income. You can get an official copy of your tax returns by contacting the Internal Revenue Service. Lastly, depending on your work circumstances, you might need to get a copy of a 1040, W2, or 1099.
Proof of Lost Self-Employment Income
If you are self-employed, it might be more difficult to prove lost wages. However, a 1099 form is usually used for miscellaneous income, which often includes self-employed persons or freelance workers. In addition, self-employed people and independent contractors may have several 1099 forms a year, so their previous year’s income might differ from current or expected future income.
Therefore, it can be more challenging to prove lost wages or lost earning potential with jobs of this nature. However, your attorney can help you find the proper documents to help determine a fair value for your lost wages and lost future earning potential, no matter what kind of job you have. Sometimes, attorneys enlist the help of other professionals, like forensic accountants or personal investigators, to help provide proof of your income.
Compensation for Lost Wages, Including Personal Leave, Sick Days, Vacation Time, Overtime, Commissions, Promotions, and Bonuses
You can seek compensation for benefits in addition to your lost wages. For example, if your job pays you for sick days and vacation time, you can claim for those as recoverable damages. However, you would need to prove that you lost those benefits due to your accident injuries.
Overtime, commissions, or bonuses are more speculative types of income. Rather than a clear and objective amount like an hourly rate or annual salary, you might need more proof of a missed commission or a bonus. The easiest way to get proof would be to ask your employer to include these details in your lost wages letter. You might also be able to prove such losses (overtime, commission, bonus, etc.) if they appear on your past pay stubs.
Proof of Income From Tips
If you work a job where you make your income primarily from tips, proving income can be difficult. However, most places have a daily record or logging system that documents all the tips each employee makes. In this case, ask your employee to write a letter to support your claim on how much you usually earn. Your attorney will have other strategies to get solid proof of how much you make.
Is My Compensation for Lost Wages Subject to Tax in Colorado?
In theory, your recovered lost wages are taxable. Since your lost wages would have been taxable had you earned them, they should still be taxable if you recover them in a lawsuit. However, you should consult with your attorney to discuss this.
You may have an income you never declared to the IRS. Are you still able to prove and claim those wages? As such a situation can be very tricky, you should disclose all the facts to your attorney upfront. Then they can help you devise a winning strategy to get the compensation you deserve for all your missed work hours.
Contact a Dever Car Accident Lawyer Today
If a car accident injury has prevented you from earning your living, you might be entitled to compensation for lost wages. Missing work and losing your income due to missed work could result in you and your family facing serious financial turmoil. You deserve to seek recovery for those losses.
Contact us today for your free initial consultation. We will happily review your case and help you understand your rights and legal options.