Proving Car Accident Lost Wages When You're Self-Employed

Missing work or losing your job because of accident injuries can be devastating. In a car accident case, awarding an injured person for lost wages and income are not uncommon. Even if you're self-employed, you may be entitled to receive compensation for lost income or lost business opportunities if the other driver was at fault for the accident. However, the process for proving damages is different for self-employed workers than it is for employees. Read on to learn about how to prove lost wages when you're self-employed.

Self-Employed vs. Employee

When it comes to making a lost wages claim, there are important differences between an employee and a person who is self-employed. Generally, you are considered self-employed if you are a freelancer, independent contractor, or a sole proprietor, who decides when and where to work -- as opposed to employees, whose work is generally dictated by their employer. If you are unsure if you're considered self-employed (or an independent contractor), use the chart in FindLaw's "Being an Independent Contractor vs. Employee" article to help you to figure out your employment status.

What Are Lost Wages for Self-Employed?

The term "lost wages" are often used interchangeably with lost income, lost compensation, and lost benefits, which all refer to the amount of earnings and profits you would have made if you weren't injured. These earnings include recent profits, upcoming contracts, lost business opportunities, and lost good will. Be aware not to confuse lost wages with lost earning capacity, which is another type of damages that refers to the loss of future earnings.

Proving Lost Wages and Income

If you're self-employed, proving lost wages and income may be more difficult than it is for employees. If you don't have proof of lost wages, you won't be able to receive any compensation for it. Thus, it's important to provide the insurance company or the court with supporting documents and evidence.

Documents and Evidence

To prove lost wages and income, you will need to support your claim by providing documents and evidence:

  • Proof of lost income and opportunity: The key is to show how much you would have earned from the date of the accident to the time of full recovery. You may be required to submit your 1099 form(s), tax return from previous year, correspondence, business invoice, or receipts, if applicable.
  • Letter from your employer: Obtain a letter from your supervisor, boss, or office that states your identification info, employment status, compensation, and the number of work hours you missed from the accident to full recovery.
  • Medical documents: You need to provide documents that reflect your medical condition. It can be a doctor's note or a disability slip that contains a recommendation for time off from work.

Calculating the Amount of Lost Wages

The time you spent away from work should reflect the severity of your accident injuries. If your business or independent work has been steady, you may calculate your damages with your tax return from the previous year. However, if your business or independent work involves growing profits, additional benefits, or any irregularities, you may want to consider hiring a forensic economist or a personal injury attorney.

Get a Free Claim Evaluation

Putting together a lost wages claim when you're self-employed requires more than just plugging numbers into an equation. Car accident injuries are more complicated for self-employed workers because of their irregular work schedule and the difficulty in proving wages. If you need help to prove lost wages, contact an experienced attorney in your area today and get a free claim evaluation.

Next Steps

Contact a qualified auto accident attorney to make sure your rights are protected.

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