What Are Lost Wages?

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Accidents or unlawful firings can result in lost wages.
Accidents or unlawful firings can result in lost wages. (Image: Feverpitched/iStock/Getty Images)

Lost wages are those earnings you do not receive because of the actions of another, such as a workplace or car accident or because of a firing in violation of federal or state discrimination laws. The term is typically used in settling lawsuits. For example, if you are in a car accident, you may lose wages because you cannot work while you are recuperating.

Recovering Lost Wages

Lost wages are considered part of the compensatory damages you might receive in a lawsuit against the person or organization that caused you to lose them. For example, if you are unable to work because unsafe working conditions contributed to a workplace accident, your attorney will include a calculation of these lost wages in court filings. This calculation may not always be simple. For example, if you lose two weeks of work at a pay rate of $200 a week, the calculation is fairly straightforward. You've lost $400. However, if some of your compensation is commission, the court will use historical earnings provided by your attorney and the company's attorney to arrive at a fair settlement.

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