How Are Lost Wages Calculated?

Gregg Hollander | August 18, 2023 | Personal Injury

A personal injury claim arises if you suffer a physical injury that Florida personal injury law holds someone else liable for. Typically, the liable party is either the at-fault party or their insurance carrier. “Lost wages” is just one component of the compensation you might receive if you file a personal injury claim. In some cases, lost wages compensation can be immense.

How Personal Injury Compensation Works?

When someone else causes you to suffer an injury, you deserve full compensation. That means the sum total of your tangible and intangible losses, including:

In many cases, lost wages amount to only a small percentage of your total personal injury compensation.

Comparative Fault

No matter how great the injuries you suffered, you cannot receive full compensation for them if they were partly your fault. A Florida court will deduct an amount from your compensation that equals your percentage of fault. You’ll lose 20%, for example, if you were 20% at fault. If you were more than 50% at fault, however, you will receive nothing. 

What Is MMI?

“MMI” means “maximum medical improvement.” You reach MMI when your doctor certifies that your medical condition has already improved as much as it ever will. That could mean you enjoy a full recovery, or it could mean you suffer a permanent disability. If it means you made a full recovery, you will have a good idea of the amount of your total lost wages. It’s a good idea to wait until you reach MMI before you file a claim for lost wages.

Components of a Lost Wages Claim

Following are brief descriptions of the various possible components of a lost wages claim. Not all of them apply in every circumstance.

Past Lost Wages

“Past lost wages” refers to the income you lost from the moment you were injured until the time you file your claim. It means the lost earnings you have already accumulated. Suppose, for example, that you are a full-time employee who works 40 hours a week for $25 per hour. At eight hours per day, that’s $200 per day. If you miss eight days of work, your lost wages will total $1,600.

Suppose instead that you work for a salary of $5,250 per month with an average of 175 hours/month. That breaks down to $30 per hour, of $240 per day. If you missed five and a half days of work at $30/hour, your lost wages will total $1,320. If, on the other hand, you missed five and a half months of work, your lost wages would total ($5,250) X 5.5 = $28,875. 

Your best way of proving the amount of your losses is to rely on your employer’s business records. In addition, ask your employer to sign a letter confirming the amount of your lost wages and how the company calculated them.

Missed Bonuses

Missing work might have caused you to miss out on various types of bonuses. Be sure to calculate and claim these amounts.  

Lost Sick Leave and Vacation Days

You might think you’re not entitled to reimbursement for sick leave or vacation time if you stayed home due to your injuries but received payment anyway. You are indeed entitled to these amounts. Sick leave and vacation time are limited resources. By using them because of your injury, you depleted these resources. The value of each day should equal the amount of your daily wages.

Lost Commissions

If you work for sales commissions, your income might be quite variable. In this situation, you might try to use your commission income over time to calculate a daily, weekly, or monthly average. 

If you’re claiming several months’ worth of lost earnings, a different strategy might be appropriate. For example, you might use your tax return and other documents to prove your annual income and then divide it by 12 to arrive at a monthly average.

Lost Business Opportunities

If you are self-employed, calculating your lost “wages” can be quite a challenge. For instance, how much did you lose by missing that business meeting with a potentially lucrative client? You will need access to detailed business records. You might also have to rely on certain assumptions and extrapolations. Make sure you clarify exactly what assumptions your calculation is based on.

Diminished Earning Capacity

“Diminished earning capacity” refers to your estimated future loss of income. It applies if you have not made a full recovery by the time you file your claim. It is potentially the most lucrative component of a lost wages claim. If it applies, it is by far the most difficult component to calculate. In fact, you might need an expert witness, such as a vocational rehabilitation specialist.

Imagine the following scenario. You reach MMI suffering from permanent brain damage. As a consequence, you have to retire from your position as a mechanical engineer. You optimistically overestimate your ability to benefit from vocational rehabilitation, and you end up undervaluing your claim by over $200,000. Ten years from now, you run out of money–but by then, it is too late to ask for more. 

A good lawyer and a persuasive expert witness can help you avoid this fate.   

Find a Personal Injury Attorney To Help Your Press Your Claim

An injury can cause harm to both your health and your finances. And yes, Florida personal injury law is complex. That’s okay, as a competent attorney can successfully guide you through the personal injury claims maze. 
Your lawyer can also help you find the most knowledgeable and persuasive expert witness. What’s more, under the personal injury contingency fee system, you won’t owe your lawyer a dime unless they win money for your claim.

Contact Our Personal Injury Law Firm in South Florida

If you’ve been injured in an accident, please contact our experienced personal injury lawyers in Florida at Hollander Law Firm Accident Injury Lawyers to schedule a free consultation today. We have three convenient locations in Boca Raton, Fort Lauderdale, and West Palm Beach.

We proudly serve Palm Beach County, Broward County, and its surrounding areas:

Hollander Law Firm Accident Injury Lawyers – Boca Raton Law Office
7000 W Palmetto Park Rd #500
Boca Raton, FL 33433
(561) 347-7770

Hollander Law Firm Accident Injury Lawyers – Fort Lauderdale Law Office
200 S.E. 6th Street #203
Fort Lauderdale, FL 33301
(954) 287-0566

Hollander Law Firm Accident Injury Lawyers – West Palm Beach Law Office
319 Clematis St #203
West Palm Beach, FL 33401
(561) 556-7873