The purpose of workers’ compensation is to provide benefits to workers, through an insurance policy paid by the employer, who are injured or become ill on the job or because of their job (We’ll explain this in more detail later). Remember, this article is not legal advice. If you have questions about a workers’ compensation settlement, see an attorney, like Gateway Pacific Law Group.
The purpose of workers’ compensation is to provide workers with financial support and medical care while they are unable to work and to help them return to work as soon as possible.
The following types of injuries are compensable in a workers’ compensation case in California:
- Injuries caused by an incident: This includes injuries that are caused by a sudden, unexpected event, such as a slip and fall, a fall from a ladder, or a car accident.
- Cumulative trauma injuries: This includes injuries that develop over time from repeated exposure to certain activities or conditions. Examples of cumulative trauma injuries include carpal tunnel syndrome, tendonitis, and bursitis.
- Preexisting injuries: are aggravated by the duties an employee performs for their employer: This includes injuries that the employee had before they started working, but that were made worse by the demands of their job.
Injuries caused by an incident
Injuries caused by an incident are typically easier to prove than cumulative trauma injuries or preexisting injuries that are aggravated by the duties an employee performs for their employer. This is because there is often a clear and sudden event that can be identified as the cause of the injury.
Cumulative trauma injuries
Cumulative trauma injuries can be more difficult to prove because there is often no single event that can be identified as the cause of the injury. Instead, the injury develops over time from repeated exposure to certain activities or conditions.
Preexisting injuries Made Worse by the Duties an Employee Performs for their Employer
Preexisting injuries that are aggravated (or made worse) by the duties an employee performs for their employer can also be difficult to prove. This is because the employer may argue that the injury would have gotten worse even if the employee had not been working.
If you are injured on the job, it is important to speak with an experienced workers’ compensation attorney to determine whether your injury is compensable. An attorney can help you gather evidence to support your claim and can represent you in negotiations with the employer’s insurance company.
Types of Settlements in Workers’ Compensation Cases
There are two main types of settlements in workers’ compensation cases in California:
- Stipulation and award (stip): A stipulation and award is a settlement agreement that is filed with the Workers’ Compensation Appeals Board (WCAB). The stipulation and award sets forth the terms of the settlement, including the amount of money that the worker will receive, the medical care that will be paid for, and any other benefits that will be provided.
- Compromise and release (C&R): A compromise and release is a settlement agreement that releases the employer and its insurance company from all future liability for the worker’s injury. The C&R is usually a lump-sum payment, but it can also include ongoing payments for medical care or other benefits.
The main difference between a stipulation and award and a compromise and release is that a stipulation and award does not release the employer and its insurance company from future liability. This means that if the worker’s condition worsens or if they develop new injuries related to their original injury, they can still file a workers’ compensation claim.
A compromise and release, on the other hand, does release the employer and its insurance company from all future liability. This means that the worker cannot file a new workers’ compensation claim for the same injury, even if their condition worsens.
Tax Liability of Settlements
Workers’ compensation settlements are generally not taxable income. However, there are some exceptions to this rule. For example, if a settlement includes money for future medical care, that portion of the settlement may be taxable.
It is important to consult with a tax advisor to determine the tax liability of a workers’ compensation settlement.
Processing of Settlements
Once the worker and the employer’s insurance company have reached a settlement agreement, the settlement agreement must be reviewed and approved by the WCAB. The WCAB will review the settlement agreement to ensure that it is fair and equitable to both parties.
If the WCAB approves the settlement agreement, the employer’s insurance company will then have 30 days to pay the settlement amount to the worker.
Potential Penalties for Late Payments
If the employer’s insurance company does not pay the settlement amount to the worker within 30 days, the worker may be entitled to penalties. The penalties for late payments can be significant, and they can be compounded daily.
The timeline for processing a workers’ compensation settlement can vary depending on the complexity of the case and the workload of the WCAB. However, it is generally possible to have a settlement approved and paid within a few months.
If you are considering settling your workers’ compensation case, it is important to speak with an experienced workers’ compensation attorney. An attorney can help you understand your rights and options and can negotiate a settlement that is fair to you.
About The Author
Roger Haag is an attorney who specializes in consumer, labor, and employment law, primarily representing employees. Mr. Haag has extensive experience in various legal proceedings, including arbitration hearings, administrative hearings, bench and jury trials, and has even presented arguments before the California Courts of Appeal. Additionally, Mr. Haag served in the United States Navy and also has professional experience with the Department of the Navy’s Civilian Acquisition Workforce and Chief of Naval Operations Executive Panel in Washington D.C.
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