How to Recover Lost Wages if You’re Self-Employed

If you are injured in an accident and you can’t work for a certain period of time, you may be able to recover your lost wages in a personal injury lawsuit. You’ll have to prove another party was negligent in your accident, and that your injuries prevented you from working. Then you will have to show proof of your usual income, which if you work a regular job as an employee, isn’t all that difficult to do.

But what if you’re self-employed?

What Are Lost Wages?

After suffering an injury, you may need time in the hospital for treatment, and after that, time at home to recover. Meanwhile, you and your family may struggle to get by without your regular paycheck.

Fortunately, you may be able to obtain compensation for those lost wages in a personal injury lawsuit. Where the law is concerned, “lost wages” refers to the money you would have earned from the time of the accident to the date you were able to return to work.

Typically, to recover lost wages, you would make a request to your insurance company, or in the case of a car accident where the other driver was at fault, to that driver’s insurance company. If your injuries are serious or if your insurance claim is denied, you may choose to file a lawsuit against the negligent party.

Whatever choice you make, you’ll need to prove that the accident prevented you from working, and provide evidence of your regular earnings. As an employee, you’ll need only turn over your paystubs, and perhaps a letter from your employer to confirm the details of when you were absent, and the number of hours (or salary level) that you typically are paid for each pay period.

For self-employed individuals, however, the process will be slightly different.

How to Figure Lost Wages if You’re Self-Employed

If you’re self-employed—perhaps as a freelancer, independent contractor, or small business owner—you may work irregular days and hours and earn varying levels of income from month to month. Under this scenario, it can be more difficult to prove what your lost wages should be.

Since you won’t have regular pay stubs to submit, you must find other ways to document work-related damages. Some possible approaches include the following:

• Document your past income: You can submit your tax returns, 1099s, bank records, etc. to show what you would have earned if you hadn’t been injured. As a small business owner, you may also use profit and loss statements or accounting records. From these forms, the insurance company or court should be able to figure an average weekly or monthly income.
• Document any lost work: Perhaps you landed a new job right before the accident, or had work your clients were expecting you to complete. If you have documents showing your work plans (emails from clients, signed estimates, work orders, canceled contracts, etc.) you can prove that you lost that work.
• Document increased expenses: Perhaps you had to pay others to complete the work you were unable to do to keep your business afloat. Providing invoices and proof of payment of those expenses can help document these losses.

Proving a lost wages claim can indeed be more difficult if you’re self-employed, but a personal injury attorney can help you gather all the evidence that you need.