According to the Michigan State Police, car accidents resulted in over 60,000 injuries in 2020 alone. These can happen to anyone. If you are injured, you may be temporarily or permanently unable to return to work. If you are self-employed, this situation can lead to a scary sense of financial instability. Yet, you may be entitled to lost wages or lost income compensation following the accident. Call our Michigan car accident lawyers to discuss your options and start processing your claim today.
Working relationships are often complicated today, and the border between employment and self-employment can become blurred. While there is not always a clear distinction between the two, a person can be considered self-employed if they meet some or all of the following criteria:
While not all of these may apply to you, they give you an idea of what constitutes self-employment. If you consider yourself an independent contractor, freelancer, or sole proprietor, deciding where and when you will work, you will most often be regarded as self-employed. If not, and you must report to an employer concerning your work, receive paid time off (PTO), sick days leave, or vacation days, then you are employed. If you need assistance determining which category you fall under, seek the legal advice of a trusted Michigan car accident lawyer.
A lost wages claim is intended to cover the wages lost due to a personal injury sustained during an auto accident, regardless of whether you are the at-fault driver. This claim is calculated based on what you would have earned over a specific period of time if you had not sustained car accident injuries that caused you to be unable to work.
Both employees and self-employed individuals are eligible for lost wages in Michigan. However, a slightly different approach will be necessary for self-employed people. You will not have an employer to provide proof of work status, wage verification (e.g., pay stubs), and proof of time away from work due to the accident. Instead, you will need to compile this information yourself.
Such claims require diligent effort. You must be able to provide documentation from a medical professional that indicates your medical condition and that it resulted in your inability to work. Your documentation will serve as evidence in car accident cases and needs to be as thorough as possible so that there is no question about what benefits you deserve. Income tax returns showing annual income are one way to prove what you would have earned if you had not been injured.
Lost income or lost wages is the amount of work income an individual would have earned during the three years immediately following the accident date had they not sustained a bodily injury. It is a precise calculation made when assigning wage loss benefits. Lost income does not include lost earning capacity, as that is an entirely different type of claim.
For contractors, gig workers, and other types of self-employment, Michigan law specifies that wage loss benefits are commensurate to the worker’s net income, calculated by deducting business expenses from gross income. However, which business expenses get deducted from a self-employed person’s gross earnings is decided on a case-by-case basis.
While you may include a variety of business-related expenses on your Schedule C, there is the potential that only certain expenses will be deducted from your gross income when calculating lost income as a self-employed worker under Michigan’s no-fault laws.
Michigan’s no-fault insurance laws state that if you sustain injuries in a car accident, regardless of if you were the at-fault party, you are entitled to 85 percent of your lost wages, tax-free, for up to three years after the date of your accident. This 85 percent has a monthly maximum of $6,615 as of October 2022. The monthly maximum changes annually, and the increase is based on the inflation rate.
However, when it comes to such a wage loss request under a car accident claim, insurance companies often make it difficult for self-employed workers to obtain the level of benefits they are entitled to and deserve. For help determining if you should seek lost wages following an accident with severe injuries and calculating lost income as a self-employed worker, seek the legal advice and assistance of an experienced Michigan car accident attorney.
In order to receive your lost wages benefits, you must file a no-fault application within one year of your accident date.
Along with this filing, you will need to provide a work disability certificate from your doctor, backed up by the medical records of your injury case, paid and unpaid medical bills, and proof of medical treatment. You will also need to include proof of income before your accident. For a self-employed person, this could be previously filed taxes, client invoices, business receipts, bank statements, or other such financial documentation. The more documentation you can provide, the more likely you will receive adequate compensation.
Federal and state income tax returns for the year of the crash and the prior two to three years are typically included to build a solid claim in Michigan. These returns are key to the money you can seek for lost wages. Self-employed individuals can write off certain business expenses that regular employees cannot, thus significantly lowering net income. For example, if you make $100,000 in a year but only claim $70,000 after deducting business-related expenses, the amount you receive in monthly wage loss benefits may be lower than you believe you deserve. Lost wages are just that — lost wages. Lost business opportunities and lost benefits are not included.
Do not commit fraud. On your claim, be honest about what you earned and how long you were unable to perform your job. It is best to submit all documentation and evidence of lost wages and missed work promptly so you can start the 30-day clock. That is, by providing all reasonable proof that you, as the injured accident victim, are eligible for wage loss benefits and in what amount, the insurance company now has 30 days to make the payment without it being subject to interest.
If you are denied benefits for your personal injury claim for any reason, seek a Michigan attorney’s advice to determine your options going forward, including filing a personal injury lawsuit to prevent further financial hardship.
As a self-employed person, you may wonder who will pay for your no-fault lost wage claim. The answer depends on the type of motorist coverage insurance you have.
Your insurance company will pay if you have a no-fault insurance policy where you are the named insured. If you do not have this, then your spouse’s insurance or a resident relative’s insurance will cover the cost. A resident relative is someone who resides in the same home as you and is related to you by blood or marriage.
However, if none of those apply to you, you must file under the Michigan Assigned Claims Plan (MACP), and the state will assign a car insurance company to pay for your claim. The MACP provides car accident victims without insurance with no-fault personal injury protection.
Following filing a MACP claim, the state agency or assigned insurer will alert you in writing within about 60 days as to what documentation is required to demonstrate proof of loss reasonably. An insurance adjuster can deem you ineligible and deny benefits if you do not provide adequate proof. Seek a free case evaluation with a dedicated Michigan personal injury lawyer to increase your chances of obtaining lost wages from car accident injuries.
Self-employment brings with it many advantages. Yet, when you sustain an injury due to a car accident, you may be unable to work, harming your ability to make a living. In Michigan, you are eligible for lost wages and will need to file an insurance claim. However, these claims can be challenging for self-employed individuals. You must submit enough evidence and not back down to insurance companies seeking to limit or deny the amount you are entitled to receive.
Let the experienced and knowledgeable Michigan personal injury attorneys of Matz Injury Law help. Call 1-866-22Not33 today to schedule an initial free consultation, or contact our law office through our convenient online contact form. We want to help you recover from your loss and will diligently seek the wage loss benefits you deserve.
Steven J. Matz is a founding shareholder of Matz Injury Law. The firm’s concentration is on personal injury litigation, with an emphasis on traumatic brain injury.
The maximum contingency fee permitted by law is actually 331/3%. Michigan court rules require that the attorney fee be computed on the net sum recovered after deducting all disbursements properly chargeable to the enforcement of the claim.
We can charge 22% while virtually all other injury attorneys charge 331/3% because we are very, very, good at obtaining results for our clients.
We do not spend millions of dollars on television ads; instead, we offer a lower fee to all our clients. We do not have dozens of lower paid associates handling our work. All our clients are represented by Steven and Jared Matz. Steven Matz started the firm in 1977 and since then has dedicated his life to representing injury victims. Jared joined the firm in 2016 but grew up listening to stories, discussing theories, and generally learning at the dinner table about how to effectively and compassionately represent injury victims. Jared Matz was literally born to represent individuals involved in motor vehicle crashes.
All of our cases are handled on a contingency fee and all our cases are handled at 22%. Whether the case settles or goes through trial, the fee does not change. While our competitors make excuses as to why they charge so much, we are obtaining results for our clients at a lower fee.
At a typical television advertising law firm, your first call will be handled by a receptionist, who may refer you to an intake person, who will discuss your claim with an intake manager, who then discusses your claim with an associate, who may then report to a partner. You may never speak with the person whose name is at the top of the letterhead. At Matz Injury Law you will always speak with either Steven Matz or Jared Matz.