Colorado law allows injured parties to recover “lost wages” in personal injury cases.
Lost wages are:
- amounts an injured party would have earned;
- in the past;
- if not for the defendant’s wrongful acts.
What It Includes
Lost wages can include:
- regular pay,
- overtime pay,
- bonuses,
- commissions,
- self-employment income,
- pension income,
- retirement contributions,
- sick days or vacation days a person was forced to use, and
- any other lost perks or benefits.
Loss of Future Income
When a person is injured, often it results in the inability to continue to earn at the same amount due to an injury. This is typically referred to as “lost earning capacity.”
Lost earning capacity refers to:
- limitations caused by the injuries suffered;
- loss of potential income due to inability to work or work in the same field; or
- loss of opportunity to seek promotion or new employment.
This is typically measured by determining:
- the injured party’s skills, training, and education;
- the injured party’s age and experience;
- prior job history;
- temporary or permanent nature of any limitations; and
- the limitations created by the injury prohibiting the use of the above.
How to Value Your Claim
Establishing a value for lost wages claim or loss of future income claim can ensure an injured person receives the money he or she deserves.
A claim can be valued in some of the following ways:
- lost wages letter;
- pay stubs and tax returns;
- proving lost self-employment income;
- proving the value of lost personal days, sick days, and vacation time;
- proving lost overtime, commissions, or bonuses; and
- proving income related to tips.
Below, our Colorado personal injury attorneys address frequently asked questions about “lost wages” and “lost earning capacity” in personal injury lawsuits and the injuries you may have suffered:
- 1. What are “lost wages” in Colorado?
- 2. What is lost earning capacity?
- 3. How do I prove my claim for lost wages or lost earning capacity?
- 4. Can I recover lost retirement contributions?
Colorado law allows injured parties to recover “lost wages” in personal injury cases.
1. What are “lost wages” in Colorado?
Colorado law allows injured parties to recover “lost wages” in personal injury cases.
Lost wages are:
- amounts an injured party would have earned;
- in the past;
- if not for the defendant’s wrongful acts.1
1.1 What types of income does this apply to?
Lost wages can include:
- regular pay,
- overtime pay,
- bonuses,
- commissions,
- self-employment income,
- pension income,
- retirement contributions,
- sick days or vacation days a person was forced to use, and
- any other lost perks or benefits.2
There may be other types of compensation that may also be added to this list, depending on the specific nature of the injured party’s employment. Special circumstances can be taken into account when proving lost wages damages.
1.2 What about future missed pay?
No. Lost wages damages deal with losses that have already occurred up to the day of trial. Future pay and benefit loss are handled in a different way.
2. What is lost earning capacity?
When a person is injured, often it results in the inability to continue to earn at the same amount due to an injury. This is typically referred to as “lost earning capacity.”
Lost earning capacity refers to:
- limitations caused by the injuries suffered;
- loss of potential income due to inability to work, or work in the same field; or
- loss of opportunity to seek promotion or new employment. 3
2.1 How is lost earning capacity measured?
This is typically measured by determining:
- the injured party’s skills, training, and education;
- the injured party’s age and experience;
- prior job history;
- temporary or permanent nature of any limitations; and
- the limitations created by the injury which prohibits the use of the above.4
3. How do I prove my claim for lost wages or lost earning capacity?
There are many different ways to go about proving this type of damages in a personal injury trial.
The “right way” depends on the individual facts of the case, but the following are common ways to prove to the court and jury that an injured person is entitled to a financial award:
- a lost wages letter;
- proof of lost self-employment income;
- proof of lost personal days, sick days, and/or vacation days; and/or
- proof of lost overtime, commission, or bonuses.
3.1 What is a lost wages letter?
A lost wages letter is a letter from an injured person’s employer which states his or her:
- job title;
- date on which he or she was hired and confirmation that he or she was an employee as of the date of the injury or accident;
- the number of hours the employee normally worked per week;
- regular rate and frequency of pay (for instance, $25/hour);
- overtime rate (if applicable) and the number of overtime hours normally worked per week,
- number of days or hours of work missed;
- amounts he or she could reasonably have expected to receive in overtime pay, commissions, or bonuses during that period; and
- any other perks to which he or she would have been entitled but didn’t receive (such as a car allowance).
Not all employers are willing to write a letter, in which case other means to prove lost wages damages must be undertaken.
3.2 How do I prove lost self-employment income?
While self-employment income is often more difficult to prove, an injured person is entitled to the amount he or she would have earned absent the injury.
To prove lost self-employment income, a person needs:
- documents that support the claimed earnings;
- tax return from the previous year;
- any billing statements, especially those that show customary earnings per month; or
- testimony by an accountant.
Just because a person is self-employed does not mean he or she should go without lost wages damages.
3.3 How do I prove lost personal days, sick days, and vacation time?
If, as a result of an injury, the person had to use sick days, personal days, or vacation days, he or she can claim reimbursement for them.
If it had not been for the other person’s wrongful act, the injured party would not have had to use those days. With the help of an experienced attorney, the injured party can show:
- the number of days taken;
- the monetary value of that lost time; and
- the amount of time and hours it will take to re-earn those days.
A person who has to use these types of days off from work should take great care to document all time taken. This will make it considerably easier to prove at trial.
3.4 How do I recover lost overtime, commissions, or bonuses in Colorado?
If a person would normally have expected to receive overtime, commissions, or bonuses, he or she can prove those to receive damages. The injured party can show:
- the amount of overtime customarily worked, and that would have been worked;
- typical commissions earned in the past that were lost;
- bonuses lost as a result of the inability to work; and
- any other perks (such as a car allowance).
Any of these amounts can be recoverable as part of a personal injury case in Colorado, with the help of a knowledgeable attorney.
4. Can I recover lost retirement contributions?
If an injured person lost out on retirement contributions, like a 401(K) or a pension, he or she can show proof and claim it as damages. To do this, the injured party can show:
- the amount normally contributed to the retirement account per week;
- the amount lost due to the inability to work;
- the lost investment value of contribution earnings during lost period.
Call us for help…
For questions about lost wages or lost earning capacity or to confidentially discuss your case with one of our skilled Colorado personal injury attorneys, do not hesitate to contact us.
We represent clients in and around Denver, Colorado Springs, Aurora, Fort Collins, Lakewood, and several nearby cities.
Legal References:
- Bondi v. Liberty Mut. Ins. Co., 757 P.2d 1101 (Ct. App. Div. I 1988) (plaintiff seeking claim for lost wages due to an automobile accident).
- Presentation and Proof of Damages in Personal Injury Litigation, 59 AMJUR TRIALS 395, Jonathan M. Purver.
- Jones v. Cruzan, 33 P.3d 1262 (Ct. App. Div. I 2001). (“Damages for lost earning capacity were justified for injured driver, although driver was earning more at time of trial of personal injury action than before injury, where injured driver suffered permanent impairment that prevented driver from engaging in physical activities associated with his profession, and driver would need medical care for the rest of his life.”)
- Same as 2. (“At the time of an injury, the client will have had a certain capacity for making money. Typically, this is determined by his or her age, experience, education, and training. Prior job history can provide a solid basis on which to determine the earning capacity of the injured party. After the accident, the client’s capacity for making money is probably reduced. The reduction may be temporary or permanent.”)