Proving Lost Wages When You're Self-Employed
The easy case and the hard case
When someone with a regular job is hurt, proving lost wages is simple. The employer writes a letter saying how much the person earns and how many days they missed, and the pay stubs back it up.
When you work for yourself, there is no employer letter. You might drive for Uber or DoorDash, run a small business, do contract work, clean houses, do landscaping or cut hair. Your income may change from week to week. The insurer will use that to argue you did not really lose anything, or that whatever you lost cannot be proven.
It can be proven. It just takes more paper.
What counts
A claim for lost income can include:
- The work you missed while you were hurt and recovering
- The jobs or contracts you lost, including clients who went elsewhere because you could not do the work
- The business you could not take on: shifts you could not drive, bookings you had to turn down
- What you paid someone else to keep your business running while you could not
- Future losses, if the injury will limit what you can earn going forward. That is called loss of earning capacity, and it is often the largest part of a serious case
The records that prove it
Start gathering these early, while the details are fresh:
- Tax returns for the last few years, with all schedules. These are usually the starting point.
- 1099 forms from the companies you work with
- App earnings statements: weekly and monthly summaries from Uber, Lyft, DoorDash, Instacart and similar apps, for the months before and after the injury
- Bank statements showing your deposits
- Invoices, receipts and booking records
- Contracts or emails showing work you had lined up and lost
- Your calendar or schedule, showing the days and hours you normally worked
- Messages from clients canceling or moving to someone else
What makes the claim is the comparison. Your income before the injury, against your income after, shows the loss.
If you are paid in cash
Many people who work for themselves are paid partly in cash. That income still counts, but it is harder to prove. Bank deposits, a notebook of jobs and payments, messages with clients, and testimony from the people who paid you can all help.
Ask your doctor to put it in writing
Insurers often argue you could have gone back to work sooner. Ask your doctor to write down any work restrictions: no lifting, no driving, no standing for long periods, and for how long. A note in the medical record that you could not work is far stronger than your word alone.
When an expert helps
In a larger case, especially one with future losses, an accountant or an economist may be brought in to calculate the loss in a way a jury can follow. That is part of the case your lawyer builds; you do not need to arrange it yourself.
Talk to Boyd
If you work for yourself and an injury has cost you work, call. The consultation is free, and Boyd takes the call himself: (714) 656-2400.