How Are Lost Wages Calculated?
Paul Brannon | January 18, 2023 | Personal Injury
Lost wages are a component of most personal injury and workers’ compensation claims. These economic damages are awarded to compensate accident victims for the income and benefits they lost due to their injuries. In some cases, the calculation of lost wages is straightforward. In other cases, it is extremely difficult. It is imperative, however, that you get it right.
Lost Wages for Short-Term Injuries
Calculating lost wages for short-term injuries is reasonably straightforward:
- Calculate your average daily pay. If you earn an hourly wage, for example, you can multiply it by eight if you work eight hours per day. If you earn a monthly or yearly salary, break it down into daily pay.
- Determine how many days of work you missed because of your injuries.
- Multiply your average daily pay by the number of work days you missed.
- Add in any extra amounts–bonuses, commission, sick leave, vacation pay, etc.
You add in sick leave and vacation pay even if you have used them because using leave diminishes your resources for future sick days or vacation time.
Lost Wages for Permanent and Long-Term Injuries
For practical purposes, an injury is permanent or long-term if it requires assessing estimated future lost earnings and incorporating this amount into your claim. This process is inherently speculative.
Maximum Medical Improvement (MMI)
MMI is the point in time, certified by your doctor, when you have recovered from your injuries as much as you ever will. This might mean a full recovery. Alternatively, you may suffer from a permanent disability that affects your ability to earn a living.
Ideally, you should wait until you reach MMI before you resolve your claim through either negotiation or court litigation. That way, you will know how much money to ask for. If you won’t reach MMI until the statute of limitations expires or your claim grows stale, you must pursue your claim before reaching MMI and estimate your future lost wages.
Popular Calculation Methods
The specific calculation method you need depends on the severity of the effect of your injuries on your career.
You may find yourself:
- No longer able to work full-time;
- Unable to resume your previous job duties; or
- Unable to work at all, for an indefinite time or perhaps the rest of your life. This last situation applies to catastrophic injury cases in particular.
The seriousness of your disability should heavily affect the calculation method you select. When in doubt, consult your Fort Walton Beach personal injury lawyer.
The methods of calculating future lost wages include:
- The actual lost wages method: Calculate your lost wages the same way you would estimate short-term lost wages, except you estimate your future losses.
- The diminished earning capacity method: Estimate the difference between your pre-accident future earning potential and your post-accident future earning potential, and claim the difference in lost wages.
- The loss of future earning capacity method: Assess the difference between your estimated future earning capacity before the accident versus your estimated future earning capacity after the accident. Take into account your age, education, experience, and anticipated future promotions, advancements, etc.
You will need to support your calculations with documentary evidence.
Expert Testimony To Calculate and Prove Lost Wages
You may need the assistance of an expert witness to calculate your lost earnings, especially if your injuries are long-term or permanent. Hire an expert if you need to because it is absolutely critical that you get this calculation right. Once you receive your compensation, you can’t go back and ask for more money later.
Experts cost money. Nevertheless, the right personal injury lawyer will pay your expert witness fees in advance for you and ask for repayment only if you win your case.
Contact a Fort Walton Beach Personal Injury Lawyer for Help Calculating Your Lost Wages
It’s important to note that lost wages are just one aspect of a personal injury claim. Other damages, such as medical expenses, property damage, and pain and suffering, may also be included in the calculation. You might even qualify for punitive damages.
To accurately estimate the total amount of damages, it may be necessary to work with an experienced personal injury lawyer.
If you need legal assistance, contact the Fort Walton personal injury lawyers at Brannon & Brannon Personal Injury Attorneys at your nearest location to schedule a free consultation today.
We have two convenient locations in Northwest Florida:
Brannon & Brannon Personal Injury Attorneys – Destin Office
4507 Furling Ln Suite 214
Destin, FL 32541
Brannon & Brannon Personal Injury Attorneys – Fort Walton Beach Office
975 Mar Walt Dr
Fort Walton Beach, FL 32547