Proving Car Accident Lost Wages When You’re Self Employed

Being injured in a car accident in Los Angeles is difficult no matter what you do for a living.  You should know, that regardless of your profession, you do have the right to recover your lost earnings but sometimes that can be tricky, which is why you need the right lawyer. Someone who is self-employed may have greater difficulty proving their lost wages, in comparison to someone who works a 9-5 job and punches in and out consistently.  The experienced Los Angeles auto accident attorneys at The Drexler Law Firm have the expertise and experience to help you receive the compensation you deserve. Contact us today for a free consultation.

What is the Difference Between Being an Employee and Being Self-Employed?

A person who is an employee works for a company, often under contract for an agreed-upon amount of compensation.

• An employee may work for a small business, a large organization, or the government.
• Employees are normally hired after an application and interview process.
• Employment terms are specified in either a written contract or verbally. 
• Unemployment and sick benefits are often covered for an employee. This is especially important if a person is injured in a car accident.

A self-employed individual may be an entrepreneur, business owner, truck driver, a freelance writer, or consultant. There are a few differences between being an employee and self-employed that are important to understand.

• Self-employed individuals work for themselves. This might include owning a business, being an independent contractor, or working as a freelancer.
• Self-employed people are sometimes classified as entrepreneurs.
• Self-employed people are responsible for their own benefits, including insurance. They may have access to very few benefits or options if injured in any type of accident.

What are Lost Wages?

In regards to a car accident, lost wages, or more specifically loss of earnings or loss of earning capacity is a quantification of the amount of wages you missed out on as a result of the injuries that were caused in your car accident.

Lost wages usually include more than regular income. It can also include overtime, any bonuses missed, and sick days that were used after the accident. For a self-employed individual, working overtime and missing time from work is more difficult to calculate and prove. Additionally, those who are self employed might not get regular paychecks or earn a consistent salary. They also might have complexities in their tax returns which need to be dealt with very carefully by an attorney.

What is Needed to Prove Lost Wages and Income?

Loss of Earnings

Documentation is the most important concept in proving loss of earnings. An insurance company will not ever pay for an item of damages that is not supported by documentation. If you are an employee, usually this is simple to get from your employer.  If you are a freelancer or self-employed this can be more complicated. If you are missing work as a result of a car accident make sure you document every missed opportunity you have had as each of those can play a role in you getting fair compensation.

For example, if you are a carpenter and you had a big job lined up but then could not do said job due to a car accident, it could be very helpful to write up the job and have the potential client sign something that says they were going to hire you had you not been injured.  Creative workarounds like this can work if they are executed properly.

Diminished Earning Capacity

Diminished earning capacity is based on the idea that each individual has an acquired or inherent ability to make a living and earn money. When that individual is injured and experiences a loss of physical or mental capabilities, the person’s ability to make a living decreases. This is sometimes difficult to prove since there may be degrees of diminished capacity. Witness testimony is sometimes needed to prove damages. This can be difficult to show without the assistance of an experienced lawyer. How this is proved and how much compensation a person may get will be dependent on many factors:

• The type and severity of the injuries received.
• The type of work an individual does.
• The amount of lost profits and lost wages.
• The size of the business and the labor that is employed.
• The extent of the owner’s participation in the business.

Lost Opportunities & Goodwill

This is similar to diminished earning capacity in that it’s an estimate of future impact. The potential for new opportunities in a business may decrease or disappear when the owner is injured physically or mentally. For example, if a business needs to shut down temporarily, customers may take their accounts to a new company. And even if the business reopens in a short amount of time, these accounts might be permanently lost. Witness testimony may be necessary to prove damages. This can be extremely difficult to prove without the help of a qualified attorney.

What Should You Do to Get Help?

It’s often very challenging to prove lost wages when a person is self-employed. Insurance adjusters may not understand or consider all of the factors involved when considering lost income. It may be necessary to file a lawsuit in order to receive fair compensation when a self-employed individual is injured in a car accident. Contacting a qualified attorney is crucial for getting the lost wages and income you deserve.

The Drexler Law Firm has over 50 years of combined experience and has successfully helped thousands of people receive fair compensation after an accident. Contact the Drexler Law Firm to schedule a consultation.