California Workers' Compensation Guide
Workers' Comp Settlements in California: How They Work
The workers' compensation system in California exists to aid injured workers with their medical treatment, bills, wages, benefits, and more. However, not all claims end in trial; many are settled instead. Notably, the type of settlement you accept can have a major impact on the terms and outcome of your situation.
Importantly, settling your case means that you and the insurance company agree to resolve your matter for a certain amount.
This page explains the two main settlement types, how the value of a claim is actually determined, when settlement usually happens, and what to check before you sign.
If you have questions about whether you have a workers' compensation claim, or if you are considering a settlement offer from an insurance company, give our lawyers a call for a free consultation.
The two types of settlement
California has two main ways to settle a workers' comp case.
- Compromise and Release (C&R). You receive a single lump-sum payment and, in exchange, the case is closed, usually including your right to future medical care for the injury.
- Stipulations with Request for Award (“Stips”). You and the insurer agree on the facts, including your permanent disability rating and payments, which are paid out over time. Your future medical care can also stay open.
| Compromise and Release | Stipulations with Request for Award | |
|---|---|---|
| How you're paid | One lump sum | Paid over time |
| Future medical care | Usually closed | Can stay open |
| Reopening the case | Generally not possible | Can be possible within 5 years of injury for new and further disability |
Neither option is better for everyone. The right choice depends on your injury, your medical outlook, and your financial situation. This is not a comprehensive list or legal advice. For an evaluation of your situation, call our attorneys for a free consultation.
Every settlement must be approved by a judge
No California workers' comp settlement is final until a workers' compensation judge reviews and approves it. The judge checks that the settlement is adequate given the evidence. That review is a built-in protection, but it isn't a substitute for understanding what you're agreeing to. An experienced lawyer can help you pursue a beneficial outcome.
How the value of a workers' comp claim is determined
There is no fixed formula for determining the value of a settlement. A settlement is built from several components, and each can be disputed. This list is not exhaustive, but includes factors that are considered:
- Your injury
- Disability rating
- Medical care and treatment needed today and in the future
- Your ability to work
- Any potential unpaid benefits
When settlement usually happens
Settlements usually occur after a claim is filed, typically after you've received treatment for your injuries, you have recovered enough to resume working, or you have recovered as much as you are expected to and have reached maximum medical improvement.
Before you sign: a checklist
- Do I understand whether this is a C&R or Stips, and what happens to my future medical care?
- Is my permanent disability rating correct, and is any apportionment justified by the medical evidence?
- Are all injured body parts included? Body parts left out may be waived.
- Have all unpaid temporary disability benefits been accounted for?
- Is a Medicare Set-Aside necessary?
- Do I have other claims, such as a retaliation claim under Labor Code § 132a or a third-party claim, that this settlement might affect?
- Do I need a Supplemental Job Displacement voucher?
Frequently asked questions
Which is better, a Compromise and Release or a Stipulated Award?
Does a judge have to approve my settlement?
Can I reopen my case after settling?
Can I keep working for my employer after I settle?
Before you accept a settlement, talk to a workers' compensation attorney about what you may be giving up.
Our Pasadena firm offers a free consultation, in English or Spanish.