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LOST WAGES FOLLOWING A CAR ACCIDENT – UNDERSTANDING THE BASICS

Here is the scenario: 

You have been injured in a car accident and it wasn’t your fault.  The at-fault car insurance company will not consider reimbursing you for your medical treatment or your lost wages until the end your case.  (If they agree to pay at all)  Your doctor says you can’t work because of your injuries, so you are sitting at home on the couch reading blog posts about how to make sure that you paid back for your lost wages.  Does this sound familiar?  If so, read on. 

Proving lost wages following a car accident in North Carolina can often be difficult.  Bradley Law Group has helped clients recover lost wages for more than 20 years.  We have handled thousands of lost wage claims, so we have “been there and done that” when it comes to lost wage claims.  If you are losing income as a result of a car accident that wasn’t your fault, call us for a free consultation.  All cases are unique, so it’s best to discuss your case with a lawyer.  If we represent you, we don’t get paid until you get paid. 

Remember, in North Carolina, the burden of proof for recovering lost wages is on YOU.  YOU have to prove that you were unable to work for a specified period and lost a specified amount of money.  Even if you could barely move on account of your injuries, an insurance company will not know if you were unable to work unless there is a doctor note explaining this.  An insurance company will typically not take your word that you could not work.  Remember, this is a legal claim, you need proof!

Here are some common lost wage scenarios that we see on a regular basis:

Hourly Worker (W-2 Employee):          

Example:  Fred was in a car accident that wasn’t his fault.  Fred works at the local gas station and is paid $15.00 per hour.  He works 8.0 hours per day and he is missing work as a result of his car accident injuries.  The accident was not his fault.  Fred’s doctor has written him out of work for five days.     

Fred needs to do these things:

  1. Get a written note from his doctor explaining that he can’t work for certain dates while he is healing from his injuries.  Make certain that the dates are specified in the note.  
  2. Give the doctor note to his employer so the employer is aware of why Fred is missing work.  If the employer doesn’t know why Fred is missing work, there’s a good chance that he will be fired for missing work!
  3. Return to work when the medical excuse note expires.  If Fred is still unable to work at the expiration of his work excuse note, he needs to contact the doctor to get a new work excuse note with a new return date.
  4. Save pay stubs and any other earnings records.  This will show what Fred was making before the accident versus after the accident.
  5. Get a lost wage letter signed by the employer.  When Fred returns to work, he needs to have his employer fill out a form calculating exactly how much Fred lost on account of missing work.  (This form can be supplied by your attorney)

Independent Contractor (Receives form 1099 at end of year):

Example: Mark drives a truck for a living.  He owns his truck and he has contracts with several local manufacturers to ship their products.  Mark charges these companies based on the distance that he must drive to deliver their products and this changes with each shipment.  At the end of the year, Mark receives 1099 tax forms from each of the companies showing exactly how much he earned.  Mark turns in these 1099 forms when he files his annual taxes.  Mark was involved in a car accident that wasn’t his fault.  Mark’s doctor has written him out of work for five days on account of his injuries.

Mark needs to do these things:

  1. Get a written note from his doctor explaining that he can’t work for certain dates while he is healing from his injuries.  Make certain that the dates are specified in the note.  Wait a minute, he needs a note even though he is self-employed??  Yes, that’s right.  The note is to prove to the insurance company that he could not work for a specified period of time.
  2. Return to work when the medical excuse note expires.  If Mark is still unable to work at the expiration of his work excuse note, he needs to contact the doctor to get a new work excuse note with a new return date.
  3. Notify his companies that he is willing to resume his duties when his doctor note expires and he is cleared to work.
  4. Provide his attorney with copies of previous federal tax returns and 1099 forms.  Many 1099 workers often see fluctuating income based on the season, the amount of work available, the economy, hours available to work, etc.  Therefore, Mark’s attorney will need these past records of earnings to establish an income average prior to the collision.
  5. Provide his attorney with copies of earnings records after returning to work.  Mark’s attorney will want to see if he is earning as much as he was before the collision.  If not, why not?  Is the difference related to Mark’s injuries?      

**Bonus Insight: The biggest mistake that 1099 workers make following a collision is not getting medical excuses for their work absences.  Since most 1099 workers do not have a “boss” they don’t feel the need to have their doctor write a note keeping them out of work.  After all, who would they give the note to?  With a 1099 worker, the doctor note is not for the employer, it is to show the insurance company that you could not work during a designated period of time.  The burden of proof is on YOU to prove a lost wage, so we need proof! The insurance company will not just accept your statement that you couldn’t work!

Small business owner:

Example: Mary sews quilts and sells them at a local market.  In addition to sewing quilts herself, she has one employee.  Mary was involved in a car accident that wasn’t her fault.  She hurt her arm in the collision and now she can’t sew quilts.  She is receiving physical therapy, but she isn’t sure when she will be able to return to sewing.

Mary needs to do these things:

  1. Get a written note from her doctor explaining that she can’t work for certain dates while she is healing from her injuries.  Make certain that the dates are specified in the note.  
  2. Give the doctor note to her attorney.
  3. Return to work when the medical excuse note expires.  If Mary is still unable to work at the expiration of his work excuse note, she needs to contact the doctor to get a new work excuse note with a new return date.
  4. Provide copies of prior tax returns to her attorney so that a baseline income can be established before the collision. 
  5. Save copies of all earnings and expenses following the collision.  This will enable Mary’s attorney to calculate the profit (or loss) following the collision.  How do post-collision earnings compare to pre-collision earnings?

**Bonus Insight: Proving lost wages for a self-employed person is much harder than proving lost wages for hourly employees or 1099 workers.  This is largely due to the fact that a self-employed person’s earnings are affected by so many different factors.  Following a collision, a self-employed person’s earnings might be impacted by his or injuries, but they may also be impacted by other factors such as reduced demand for a product, rising labor costs, staffing issues, etc.  Only lost earnings related to injuries are compensable.  Insurance companies love to argue that self-employed people lost money following a collision because of everything OTHER than their injuries.  Your best defense against this line of argument is to make certain that your doctor writes you out of work for all dates missed.  You also want to make sure that you provide your attorney with the information set forth above.

Closing words of wisdom

Lost wage claims are not “money makers.”  The best that you can do with a lost claim is to get back what you lost.  Insurance companies are notorious for fighting lost wage claims.  Remember, the less the insurance company pays you, the more they keep.  The very nature of a lost wage claim gives the insurance company countless ways to challenge your claim.  Bradley Law Group has decades of experience in fighting to recover lost wages.  If you have been injured in a collision and it wasn’t your fault, call us for a free consultation.  We don’t get paid until you get paid.  We look forward to talking with you!

****All cases are unique and are evaluated independently. Past results are not a guarantee of future performance. This post does not form an attorney client relationship with the reader nor is it intended as legal advice. State laws are different regarding insurance coverages and their applicability. Bradley Law Group represents people involved in accidents in North Carolina.

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