Explaining Compensation for Lost Wages
Understanding compensation for lost wages can be difficult because there are many aspects of how you can get paid after an injury. We will try to explain compensation for lost wages from a legal standpoint.
When you get injured on the job in the state of Colorado, one of your primary concerns is likely how you’ll pay your bills if you can’t work. Thankfully, Colorado’s workers’ compensation system is designed to help employees by providing compensation for lost wages during the recovery period. Here’s everything you need to know about compensation for lost wages and how to seek a lawyer in Colorado.
3 Types of Wage Loss Benefits
In Colorado, wage replacement under workers’ compensation typically falls into these three categories below:
1. Temporary Total Disability (TTD) Benefits
If your doctor determines that you are unable to work at all during your recovery, you may qualify for Temporary Total Disability (TTD) benefits. These benefits replace a portion of your lost wages while you are out of work entirely due to your injury.
- How much will you receive? TTD benefits are calculated as two-thirds (66.67%) of your average weekly wage (AWW), up to a statewide maximum set annually by the state.
- When will payments start? TTD benefits are paid after a three-day waiting period. If your injury causes you to miss more than 14 days of work, you will be paid for the initial three-day waiting period as well.
2. Temporary Partial Disability (TPD) Benefits
If your doctor clears you to return to work but with restrictions that result in reduced hours or lower pay, you may qualify for Temporary Partial Disability (TPD) benefits. TPD benefits are designed to cover the difference between your pre-injury earnings and what you can earn while working on light duty or with limited capacity.
- How much will you receive? TPD benefits are calculated at two-thirds (66.67%) of the difference between your pre-injury wages and your current earnings with work restrictions.
3. Permanent Disability Benefits
Once your doctor determines that you have reached Maximum Medical Improvement (MMI) (the point at which your condition is unlikely to improve further with medical treatment), you may be entitled to Permanent Partial Disability (PPD) or Permanent Total Disability (PTD) benefits, depending on your level of impairment.
- PPD Benefits: For workers who can still perform some work but have a permanent impairment.
- PTD Benefits: For workers who are unable to return to any type of employment due to their injury. PTD benefits provide ongoing wage replacement, usually at the same rate as TTD benefits.
Calculating Your Average Weekly Wage (AWW)
Your average weekly wage (AWW) is critical in determining how much you will receive in lost wage benefits. AWW typically includes:
- Regular wages
- Overtime
- Tips (if documented)
- Employer-paid health insurance premiums
In Colorado, the AWW calculation includes all forms of compensation earned over the 52 weeks prior to your injury. If you have been employed for less than a year, the total earnings over your time of employment will be used instead.
What If My Employer Disputes My Lost Wage Benefits?
It’s not uncommon for employers or insurance companies to dispute claims regarding lost wages, particularly when it comes to:
- The amount of the average weekly wage (AWW)
- The degree of injury and its impact on your ability to work
- Whether or not the injury is truly work-related
If this happens, it’s crucial to have an experienced workers compensation lawyer, like Jon Boesen, by your side. They can help you gather the necessary medical records, pay stubs, and other documentation to build a strong case for receiving the wage loss benefits you are entitled to.
Duration of the Benefits
- TTD and TPD benefits are typically paid until you reach Maximum Medical Improvement (MMI), meaning your doctor determines that your condition will not improve further with treatment.
- Permanent disability benefits can last for a set number of weeks or, in the case of Permanent Total Disability (PTD), they may continue for life.
Statute of Limitations in CO
In Colorado, you must notify your employer about your injury within four days of the incident. Failing to do so can jeopardize your claim. Additionally, you have two years from the date of the injury (or from when you should have reasonably known the injury was work-related) to file a workers’ compensation claim. It’s important to take action promptly to preserve your rights.
How can a workers compensation lawyer help?
Navigating the workers’ compensation process can be overwhelming, especially when you’re recovering from a serious injury. A workers compensation attorney can:
- Ensure your lost wage benefits are accurately calculated based on your earnings and work restrictions.
- Assist with disputes regarding wage loss benefits, medical treatments, or permanent disability awards.
- Negotiate with insurance companies to secure a fair settlement or represent you at a hearing if necessary.
At Boesen Law, we have extensive experience helping workers secure the compensation they deserve after suffering on-the-job injuries. We are dedicated to making sure your rights are protected, and we won’t charge any upfront fees—we only get paid when you do.
If you’ve been injured at work and need help understanding your rights to lost wage compensation, contact us today for a free consultation.
How do you calculate lost wages in a personal injury claim?
Calculating lost wages in a personal injury claim is an essential part of ensuring that an injury victim is compensated for the financial impact of not being able to work due to their injuries. Here’s how you calculate lost wages in a personal injury claim:
1. Determine Pre-Injury Income
The first step is to calculate your pre-injury income. This typically includes:
- Hourly wages or salary: Your regular earnings before the injury. This is usually based on your most recent pay stubs or employment records.
- Overtime: If you regularly earned overtime before the injury, it should be included as part of your lost wages calculation. You’ll need documentation of the overtime worked prior to the injury.
- Bonuses: Any bonuses or performance-based incentives you would have reasonably expected to earn during your recovery period.
- Commissions: For sales employees or those on commission, lost wages should include an estimate of the commissions lost due to the inability to work.
- Benefits and Perks: Some employee benefits, such as employer-paid health insurance premiums or other financial perks, may also be included.
2. Calculate the Duration of Time Missed from Work
Next, you need to determine the amount of time you’ve missed from work due to your injury. This includes:
- Days off work: Count the number of workdays you were unable to attend due to medical appointments, recovery time, or therapy sessions.
- Partial disability or reduced hours: If your injury forced you to work reduced hours or take on lighter duties with less pay, you may also be entitled to recover lost wages for the difference in earnings during this time.
3. Multiply by Average Weekly or Daily Income
Once you have the necessary data, multiply your lost time from work by your average weekly or daily income. For example:
- Hourly workers: Multiply your hourly wage by the number of work hours you missed.
- Salaried workers: Divide your annual salary by 52 to determine your average weekly earnings, then multiply by the number of weeks you missed from work.
Example for a Salaried Worker:
If you earn $52,000 annually and were out of work for 8 weeks, your lost wages would be calculated as follows:
52,000÷52=1,000 (weekly earnings)52,000 \div 52 = 1,000 \text{ (weekly earnings)}52,000÷52=1,000 (weekly earnings) 1,000×8=8,000 (lost wages over 8 weeks)1,000 \times 8 = 8,000 \text{ (lost wages over 8 weeks)}1,000×8=8,000 (lost wages over 8 weeks)
Example for an Hourly Worker:
If you earn $25 per hour and normally work 40 hours per week, and you missed 5 weeks, the calculation would look like this:
25×40=1,000 (weekly earnings)25 \times 40 = 1,000 \text{ (weekly earnings)}25×40=1,000 (weekly earnings) 1,000×5=5,000 (lost wages over 5 weeks)1,000 \times 5 = 5,000 \text{ (lost wages over 5 weeks)}1,000×5=5,000 (lost wages over 5 weeks)
4. Include Lost Earning Capacity
If your injury has long-term consequences that will impact your ability to earn money in the future, you can seek compensation for lost earning capacity. This is more complex and typically requires expert testimony or reports, but it includes situations where:
- You are unable to return to the same line of work due to physical limitations.
- Your earning potential has decreased because you can no longer work the same hours or perform the same tasks.
- You may need to switch to a lower-paying job or role that accommodates your injury.
5. Document Your Lost Wages
To successfully claim lost wages, it’s essential to document everything related to your employment and earnings. Some of the key documents to gather include:
- Pay stubs: To show your earnings before the injury.
- Tax returns: Especially important if you are self-employed or earn irregular income.
- Doctor’s notes: Proof that your injury prevented you from working during a specific period.
- Employer’s statement: A letter from your employer confirming your salary, hours missed, and the nature of your work restrictions or inability to work.
6. Self-Employed Workers
If you’re self-employed, calculating lost wages can be more complicated but still possible. You will need to provide documentation of your earnings history, which could include:
- Tax returns
- Profit and loss statements
- Invoices and contracts that show expected income during the period of recovery
- Financial statements showing business performance pre- and post-injury
7. Recoverable Types of Lost Wages
In addition to actual wages lost, you may be able to recover compensation for:
- Sick days and vacation time used: If you had to use paid time off (PTO) for your recovery, you could claim this time as lost wages since you would have otherwise earned wages without having to dip into your PTO.
- Promotions and bonuses: If your injury caused you to miss an opportunity for a promotion, bonus, or career advancement, this may be factored into your lost wages. Read more here about different types of injuries that you can claim workers compensation from.
Contact Boesen Law to maximize your lost wage compensation
An experienced Denver personal injury lawyer, like Jon Boesen, can help ensure that all potential lost wages are accounted for, including future lost earning capacity. They will also work with experts, such as vocational specialists and economists, if necessary, to provide evidence to support your claim for future lost wages or diminished earning potential.
Lost wages in a personal injury claim are intended to compensate you for the financial impact of not being able to work due to your injuries. Accurately calculating your lost wages can involve more than just your salary; it requires consideration of any overtime, bonuses, benefits, and even future lost earning potential.
Hiring a personal injury lawyer will ensure that all aspects of your lost wages are considered and that you receive the full compensation you deserve. If you’re in Colorado and dealing with a personal injury, contact a lawyer who can walk you through the process, handle negotiations, and help you recover the maximum compensation for your losses.
