An injured contractor, freelancer, or business owner may not have a supervisor who can sign a standard wage loss form. That does not eliminate the possibility of an income loss claim. It changes the evidence needed to explain what work was lost, why the injury prevented it, and how the amount was calculated.

Define the loss before calculating it

Missed revenue, lost personal earnings, reduced business profit, and loss of future earning capacity are related but distinct concepts. A canceled invoice is not automatically equal to the recoverable loss. Costs that were avoided, work performed later, replacement labor, business ownership, and other contributors to income may affect the analysis.

The Judicial Council’s CACI No. 3903C addresses proof of past lost earnings and future earnings reasonably certain to be lost because of the injury. A claim for diminished earning capacity raises a separate question about the ability to earn. Neither should rest on a projection detached from the person’s work history and medical evidence.

Build a record of work before and after the injury

  • Tax returns and business financial records for relevant periods.
  • Invoices, deposits, contracts, and payment records showing actual earnings.
  • Calendars and communications documenting accepted assignments or canceled work.
  • Records showing which duties you personally performed and which were delegated.
  • Receipts for replacement labor or other claimed expenses, with an explanation of necessity.
  • Medical restrictions and records supporting the reason you could not perform particular tasks.

Connect the restrictions to actual duties

A general statement that you “could not work” may leave unanswered questions. Describe whether the job required lifting, climbing, prolonged driving, concentration, or another activity affected by the injury. Provide the treating clinician with an accurate description of those duties so any restriction is based on the work you actually do.

Do not turn a medical recommendation into a broader limitation than the clinician gave. If you were able to perform administrative work but could not perform physical work, preserve that distinction. Explain partial work, reduced hours, and gradual return rather than treating every day after the accident as a complete income loss.

Account for normal business variation

A seasonal business may earn more in one month than another. A new business may lack several years of returns. Compare appropriate periods and preserve the reasons for changes unrelated to the injury. A single unusually profitable week can be misleading when used as the sole basis for a long projection.

For a canceled project, keep evidence that the work was actually expected, its terms, and whether it was completed later or by someone else. Separate a firm commitment from a possible lead. If the business continued earning while you were absent, explain the role of employees, partners, equipment, or other sources of that income.

Use a transparent calculation

Organize the dates, affected assignments, relevant income, avoided expenses, replacement costs, and supporting records. Mark estimates as estimates. Do not double count the same loss as both a canceled contract and a total reduction in monthly profit. An accountant, vocational expert, or economist may be needed for a more complex claim.

What if you were paid in cash?

Preserve lawful, accurate records such as receipts, contemporaneous ledgers, customer communications, and deposit information. Do not create false invoices or rewrite prior records. Gaps in documentation should be discussed honestly with counsel. A claim should be supported by the best available evidence rather than a manufactured paper trail.

Primary legal resources

Judicial Council CACI No. 3903C; CACI No. 3903D, lost earning capacity (reproduced by Justia).

Discuss the facts of your claim

Weiss Attorneys can review the records and the legal questions raised by your situation. Learn about our related injury representation and this related claim guide.

Read Scarlett Farrokh’s attorney profile, request a consultation, or call (213) 583-0977. This article provides general California information. The applicable duties, deadlines, and available remedies depend on the particular facts.