A key aspect of any personal injury claim is calculation of all losses arising from the accident and resulting injuries. In addition to compensation for medical treatment and pain and suffering, another category of damages that shouldn’t be overlooked is lost income.
Lost Income: What’s Recoverable in a Personal Injury Case?
In most instances, you’re entitled to reimbursement (from the person who was at fault for the accident, or from that person’s insurance company) both of:
- income lost because you were unable to work because of your accident and injuries, and
- time missed at work because you were undergoing treatment for your injuries.
The right to be reimbursed applies whether you have a full-time or part-time job, regular or occasional employment, an hourly wage or weekly or monthly salary, or are self-employed.
Sick Leave and Vacation Pay
The fact that you were able to take sick leave or vacation pay for the time you missed—and therefore did not directly lose income—does not matter; that time is still part of your lost income claim. You were entitled to use that sick leave or vacation time when you might have needed or wanted it. Bottom line: Using up sick leave or vacation pay is considered the same as losing the pay itself.
Documenting Lost Income as Part of Your Injury Case
To be reimbursed for lost income, you typically must be able to show:
- the time you missed from work because of your accident, injuries, and recovery, and
- how much money you would have made during the time you missed.
If you are regularly employed by someone else, collecting information about your lost income is usually straightforward. Ask your human resources department to print out a letter or email you a document (on company letterhead or stationery, if that’s an option) that includes your name, your position, your rate of pay, the number of hours you normally work, and the number of hours or days you missed following the accident. In addition, your human resources department can provide copies of paystubs to document your pre-accident earnings.
If you are irregularly employed or are self-employed, proving lost income can be a little more complicated. You have to show how much work time you lost and what you might have earned had you been able to work. You can use any evidence you have of a drop in billing or invoices, a calendar showing appointments you had to cancel, and any documents (including printouts of emails and other electronic messages) showing meetings, conferences, or other appointments you were unable to attend.
After you have demonstrated how much work you missed, you have to show how much you might have earned. If you had been working a relatively steady amount immediately before the accident, you can show an average for the period by putting together copies of your billing, invoices, payments received, or other evidence of money earned. Then, depending on the amount you were working and how much you were earning, you can calculate how much income you are considered to have lost for the time you were unable to work due to the nature and extent of your injuries.
If you work sporadically—some weeks or months earning most of your income and other weeks or months earning little or nothing—you can show the value of lost work time through evidence of what you make during an entire year, then dividing that into a weekly or monthly average.
The best evidence of your yearly income is your personal income tax returns. If you had particularly low earnings during the previous year, include two or three years of returns to demonstrate how much you usually earn. If you also have some evidence of income for the current year showing a similar earning pattern, include that as well.
Getting Compensation for Lost Opportunities
In addition to time lost from work, you are entitled to reimbursement for work opportunities lost as a result of the accident and your injuries. Of course, it’s harder to prove you lost income by missing a job interview or a sales meeting than showing you lost income by missing actual work. But even if you cannot point to a specific dollar amount, a damages expert can help you determine the potential lost opportunities.