How Lost Wages Are Calculated in Ohio Accident Settlements

After you suffer injuries in an accident in Ohio caused by another party, you might have the right to seek compensation for various losses resulting from your injuries, including ongoing and future losses of wages. But how do parties determine an accident victim’s lost wages when negotiating a settlement of a motor vehicle accident claim in Ohio? Understanding your rights to recover lost income or earning capacity in an Ohio accident settlement can help you seek the financial recovery you deserve after getting hurt due to another party’s fault. 

Understanding Ohio Injury Laws

In Ohio, accident laws allow injured victims to recover economic losses from the party or parties at fault for the accident and other liable parties (such as an at-fault party’s employer if they caused the accident in the course of their work). Economic losses can include wages, salary, or other compensation that an accident victim cannot earn due to their injuries. Although many accident victims seek compensation for lost wages, their financial recovery will depend on various factors, including the fault for the accident, the parties’ respective shares of liability, the causal links between the accident and lost wages, and the accident victim’s current or future ability to work. 

Steps for Calculating Lost Wages

Determining your lost wages when negotiating a settlement of your Ohio accident injury claim can involve several steps:

• First, gather documentation of your pre-accident earnings, including pay stubs, tax statements, and income statements (if you work as an independent contractor or own a business). These records can help determine how much you earned before your injury.
• Next, you will need to calculate your “past” lost wages, or the income you haven’t earned since the accident. Hourly workers might multiply their wage by the hours or days they have missed due to their injury, while salaried workers might divide their annual salary by the number of days or weeks they have missed from work. You should also include other compensation you typically receive beyond base wages or salary, such as overtime, bonuses, commissions, and other benefits. You will also need to account for any income you earned since the accident in part-time or modified duty work. 
• When your injuries will continue to keep you out of work, you will also need to project your future lost income or reduced earning capacity. For example, your treating physicians may provide you with a prognosis that estimates how long it will take you to return to work, which can help you calculate future lost wages. However, if your injuries will lead to permanent impairments that require you to transfer to a lower-paying job, you should determine the difference between your pre-accident and post-accident earning potential. 

Key Considerations and Pitfalls

Some of the top issues and mistakes that may arise in calculating lost income or earning capacity for an Ohio accident settlement include:

• Comparative negligence: Under Ohio’s comparative negligence system, any percentage of fault you bear for the accident can reduce your financial recovery proportionally; bearing a majority of the fault can bar you from any recovery.
• Timing: You may postpone settlement negotiations until your injuries have stabilized, allowing you to understand your future earning capacity better. 
• Tax: The portion of a settlement attributed to lost income may become subject to state and federal income tax. 
• Insurance coverage: Your ability to recover lost wages in a settlement may depend on the limits of the liable party’s insurance coverage.

Contact a Personal Injury Lawyer Today

When you sustain injuries in an accident in Ohio that prevent you from working, you might have a legal claim against the parties at fault for the accident for your lost income. Contact Kitrick, Lewis & Staley-Sladek Co., L.P.A. for a free, no-obligation consultation with a car accident lawyer to learn more about your rights to seek financial compensation for your lost wages or future earning potential if you suffer injuries in an accident due to another.