We will help you understand exactly how lost wages work in Florida, how to determine your lost wages, whether you are paid a salary, paid hourly, or self-employed, and what steps you must take to support your claim.
Lost Wages vs. Lost Earnings Capacity
There are two terms that sound like they mean the same thing, but they refer to two separate issues regarding your claim.
Lost wages refer to the actual amount of income you lost while recovering from your injuries. For example, if you took six weeks off from work after being injured, lost wages are going to represent those six weeks of income that you would have normally received. Loss of earning capacity, however, is a different issue.
Loss of earning capacity refers to the ongoing impact your injury has on your ability to continue making money. For instance, a construction worker whose dominant hand has been rendered useless may never again be able to perform his original line of work. Therefore, the loss of potential earnings he experienced as a result of that injury is a loss of earning capacity.
Both can be included in your personal injury or workers’ compensation claim, but both are supported with different forms of documentation. Lost wages can usually be easily documented; whereas loss of earning capacity is much harder to document and frequently requires the assistance of a vocational expert, an economist, and/or a doctor providing medical testimony about permanent damage.
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561-689-8180Florida Law Regarding Replacement Wages
The laws regarding replacement wages vary from state to state. Florida law provides for specific methods for calculating lost wages for workers receiving workers’ compensation benefits.
Under Florida Statutes Section 440.14, lost wages can be calculated by taking one-twelfth of your average weekly wage over the thirteen (13) weeks preceding the date of your injury. However, if you worked less than seventy-five percent (75%) of that time frame (for example, you recently began employment or had time off), your employer may use the wages of another employee who performs substantially similar duties or your average weekly wage, whichever is most reasonable.
Based upon the nature of your injury/condition and the duration thereof, workers’ compensation benefits fall into several categories:
Temporary Total Disability (TTD). When you become disabled due to an injury or illness and are unable to return to work temporarily until your condition improves and you can resume performing substantial gainful activity, Temporary Total Disability (TTD) benefits are payable. These benefits equal sixty-six and two-thirds percent (66 2/3%) of your Average Weekly Wage (AWW) up to the State Maximum Amount that varies each year.
Temporary Partial Disability (TPD). If you experience a partial disability that prevents you from returning to full-time work but still allows you to perform a certain type of work or limited hours per week, Temporary Partial Disability (TPD) benefits are payable. The benefits paid for TPD are based on the difference between your pre-injury wages and your current post-injury wages multiplied by .0456 x your Average Weekly Wage (AWW).
Impairment Income Benefits (IIB). Once your treating physician determines that you have reached Maximum Medical Improvement (MMI), Impairment Income Benefits (IIB) may be payable. IIBs are determined by multiplying your impairment rating by a percentage that is adjusted annually (.0158 = 15.8% of AWW).
Personal Injury Protection (PIP). PIP is applicable when your injury occurred in a motor vehicle accident. Regardless of who was at fault in causing the motor vehicle accident, PIP coverage will reimburse up to sixty percent (60%) of your lost wages or expenses related to treatment resulting from the accident up to the limits established in your policy. PIP is considered “no-fault” because it doesn’t matter who caused the motor vehicle accident when filing a PIP claim.
While workers’ compensation claims follow the “no fault” rule, where your employer’s negligence isn’t necessarily required for receipt of benefits, Workers’ Compensation benefits are limited. Personal Injury claims against at-fault drivers or third parties can recover the full value of your lost income, future earning capacity, pain and suffering, etc.; however, liability must be proven. Also, the statute of limitations differs greatly. In Florida, you have two years from the date of the incident to file a personal injury claim.
Related Reading:
How to Preserve Vehicle Event Data and Chain of Custody After a Florida Crash
Calculating Your Lost Wages as a Salaried Employee
Many salaried employees believe their situation is easier. They know their annual income, so their lost wages should be easy to calculate. While that is correct in general, there are some minor considerations that many people overlook.
If you are salaried, here is how to calculate your lost wages:
- Take your gross annual salary prior to taxes.
- Divide by 52 to arrive at your weekly wage, or divide by 365 to arrive at your daily wage.
- Multiply the number of days/weeks you missed by your daily/weekly wage.
Using our previous example, let us assume that you make $60,000 per year. Based on this information, we find that your weekly wage is $1,153 ($60,000 / 52) and $166 per day ($60,000 / 365). If you missed four weeks of work, your lost wages would be approximately $4,612 ($1,153 * 4).
As previously mentioned above, bonuses/commissions/overtime: If any of these items are included as a regular part of your income, these items will be taken into consideration when documenting your lost wages. Many insurers attempt to limit a claimant’s lost wages to just their base salary; however, bonuses/commissions/overtime that occur regularly are an integral part of an individual’s income. To substantiate your bonuses/commissions/overtime income, you will need some form of documentation demonstrating the regularity of such income. Examples include pay stubs, tax returns, employer records, etc.
Non-monetary benefits: Although rare, non-monetary benefits may be relevant as well. If you used equipment/tools provided by your employer as a result of your injury, or if you used a vehicle provided by your employer as a result of your injury, or if you suffered loss/damage as a result of injury-related loss/damage to employer-owned property/equipment, then these losses may be compensated.
Paid vacation/sick leave: Using paid time off during an injury period may cause confusion when attempting to determine whether or not you have any entitlement to compensation for lost wages. The fact that you used paid time off during an injury period does not affect your entitlement to compensation for lost wages. The insurer/at-fault party should not be given credit for benefits that you earned for other reasons.
Calculating Your Lost Wages as an Hourly or Self-Employed Worker
Unlike salaried employees, who have some additional calculations involved when determining lost wages, hourly employees typically have fewer problems with regard to the calculation itself. As an hourly employee, simply multiply your hourly wage by the number of hours you missed. If you commonly work overtime, ensure you include those hours as well. Additionally, shift differentials — extra pay for working evenings/nights/weekends/holidays — should also be included as part of your standard income.
However, hourly workers do face challenges regarding documentation. If an hourly worker’s work schedule varies significantly from week to week, proving consistent hours worked becomes difficult without some form of documentation. Pay stubs, timesheets, and employer records for the weeks leading up to your injury are typically the most reliable evidence.
Determining Lost Wages as a Self-Employed Worker
Self-employed workers may face even greater challenges when trying to establish their lost wages. Because self-employed individuals typically do not receive a W-2 or have fixed pay schedules, income for self-employed individuals can vary widely on a monthly basis. What typically needs to be documented to demonstrate lost wages for self-employed workers includes:
- Federal tax returns from the past two to three years;
- Profit & Loss Statements;
- Contracts/invoices for work completed but unable to complete due to injury;
- Bank statements reflecting income deposits;
- Correspondence related to canceled engagements/lost business opportunities;
Due to fluctuations in income, courts and insurance companies will often consider an average when reviewing records submitted by self-employed workers. Frequently, an economic or financial professional will be called upon to review and analyze records submitted and project lost income. Contracts in place at the time of injury that were subsequently cancelled due to inability to complete work are extremely valuable documentation since they demonstrate tangible work that could have been performed but was lost due to injury.
Support Documentation Requirements
Whether or not your situation appears cut-and-dry, supporting documentation is necessary for establishing a lost wage claim. With respect to employed workers, gathering as follows:
- Pay Stubs; preferably from recent history (i.e., last 13 weeks);
- Employment Contract/Offer Letter confirming salary/hourly rate;
- Tax Returns — specifically W-2s;
- Timesheets or Attendance Records;
- Letter from Employer confirming Position/Hourly Rate/Dates Absent Work;
- You will also need documentation from your treating physician stating you were unable to work during a particular period — including dates — and why you were unable to work. If you were assigned light-duty/work limited hours, those periods should also be documented.
- Maintain a personal log. Document each day absent work; each medical appointment attended; and/or any task(s) prevented completion due to injury. Although it may seem redundant at the time, documentation created contemporaneously will carry significant weight if your claim is challenged at a later time.
According to the Florida Department of Financial Services, workers’ compensation benefit payments made by employers in Florida are based on fifty-six dollars and twenty cents ($56.20) per week in addition to forty-one dollars and ninety-seven cents ($41.97) per week per dependent child plus seventy-four dollars and eighteen cents ($74.18) per week for every additional dependent child, plus forty-two dollars and eighty cents ($42.80) per week for each spouse, with a minimum payment of thirty-eight dollars and fifty-seven cents ($38.57) per week for each eligible family member plus forty-five dollars and fourteen cents ($45.14) per week for each family member with a disability.
The most Common Disputes regarding lost wages occur among Insurance companies, particularly when lost wages are calculated. Understanding the methods Insurance companies may utilize to downplay lost wages assists in preparation.
Insurance companies downplay lost wages
Insurance companies will often base lost wages based solely upon the employee’s annual (or monthly) base salary. Insurance companies will also ignore bonuses, commissions, or overtime that the employee normally earns. Employees should push back by documenting all forms of income.
Employees may have earned income from two jobs
If an employee was employed at two separate jobs when the employee suffered an injury, Florida law provides that employees may report wages from each job when calculating average weekly earnings. However, employees are required to report the second job to the employer; therefore, employees must have documentation from both employers to demonstrate dual employment. Documentation demonstrates that the employee was employed at a second job and supports the inclusion of those wages into the average weekly wage calculation. Including wages from a second job can dramatically increase the amount of average weekly wage and ultimately increase benefits.
Employees were Seasonal workers or part-time workers
The 13-week look-back does not always provide an accurate representation of earnings for Seasonal or part-time workers. Under Florida statutes chapter 440.14, the statute provides for the ability to calculate earnings using either a 52-week or calendar-year average for those situations in which the 13-week look-back is deemed inaccurate. For example, if an individual was injured while working seasonally or experienced variations in work schedules, using either a 52-week or calendar-year average can substantially enhance lost earnings.
Younger employees are often able to increase their wages based on future increases in earnings
Under Florida statute chapter 440.15(2), younger employees (those less than twenty-two years old) have historically been considered to be in their initial stages of developing their earning potential. As such, young employees are permitted to have their earnings increased in order to reflect projected future increases in earnings. Younger employees are often better suited to benefit from this provision since they are generally experiencing lower wage-earning potential compared to older employees.
What is lost earning capacity?
Lost earning capacity refers to any permanent restriction in employment due to injuries sustained. A person who becomes unable to perform heavy lifting due to an accident, or a person who is unable to regain fine motor control in his/her hands after surgery, or a person who suffers severe mobility limitations after suffering serious injuries – these people may experience a permanent decline in earning capability. This permanent decline in earning capability is a form of damage that can be recovered through Florida personal injury claims.
Expert testimony must be provided to establish the amount of lost earning capacity.
Vocational experts assess what work can be performed by an individual after suffering an injury and subsequent restrictions. Economic experts project the potential difference between the employee’s pre-injury career path and post-injury employment options over the remainder of the employee’s working life. The resultant numbers can be significant.
Permanent total disability benefits
When an individual suffers a permanent total disability (PTD) as a result of their workplace injuries, they may be eligible for continuing benefits payments through workers’ compensation. In addition, PTD benefits can be claimed through a Florida personal injury lawsuit, including both past-lost wages and future loss of earning capacity.
Disputed lost wage claims: common tactics used by insurers
Insurers commonly dispute lost-wage claims for many different reasons. Being aware of common tactics used by insurers enables injured employees to become prepared and defend their claims.
- Downplaying wages. Adjusters will sometimes base lost-wage calculations solely on an employee’s base salary and ignore any additional income generated through bonuses, commission, overtime, etc. Employees must gather supporting documentation to counter this tactic.
- Excluding second-job income. Some insurers may attempt to exclude income earned by employees at a secondary job(s). Florida law permits concurrent income to be reported and included in the average weekly wage calculation, provided that there is proper documentation of the secondary employment.
- Arguing partial work capability. An insurer may argue that an employee was capable of returning to light-duty work earlier than recommended by their treating physician, resulting in a shorter duration for temporary total disability (TTD). Medical records documenting the employee’s medical treatment, combined with their treating physician’s recommendation(s), will serve as the strongest defense against this argument.
Ways to protect yourself when filing for lost wages
- Report the injury immediately. Delaying reporting an injury creates skepticism and negatively impacts eligibility for workers’ compensation benefits. Therefore, it is crucial that the employee reports their injury as soon as reasonably possible.
- Obtain medical attention & follow the treating physician’s recommendations. Any gaps in receiving medical care or failure to adhere strictly to the recommendations of the treating physician can be utilized as evidence by insurers to diminish liability for lost wages. Thus, it is essential that employees seek immediate medical attention and continue to receive medical care until released from further treatment by their physician.
- Gather all relevant documentation & records of past wage history. Documentation and records of prior wage history are critical components necessary for demonstrating past wages and establishing a basis for determining present/future lost wages.
- File on time. Both personal injury lawsuits filed within two (2) years from the date of injury in Florida and workers’ compensation filings require timely submission according to Florida statutes.
- Do not provide recorded statements without consulting with an attorney first. Recorded statements made directly to the Insurance company can often lead to misinterpretation or twisting words to support positions taken by the Insurance carrier. It is imperative that injured employees consult with an attorney before providing any recorded statements to ensure the integrity of their claim.
