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How Does a Workers’ Compensation Lien Work?

What Is a Workers’ Compensation Lien?

If you are injured at work and file a workers’ compensation claim, your claim is generally filed against your employer’s insurance company and not necessarily and directly against your employer. In the event your workers compensation claim is caused by negligence of a third party you, your employer’s insurance company may seek to recover costs from any settlement you receive from the third party.

This action is a workers’ compensation lien.There are numerous ways to reduce the amount you have to pay to your employer’s insurance company, and that can all start with hiring an attorney to help you. At KJT Law Group, our lawyers can explain what a workers’ compensation lien is, how it works, and how it could affect your settlement with a third party.


What Is a Workers’ Compensation Lien?

A workers’ compensation lien prevents an employee from collecting the same benefits from a workers’ compensation and a third-party lawsuit.An employer must begin paying out benefits to an employee after they are injured in the workplace. However, if the injury was actually the result of another company or person, the employer is entitled to recover the benefits they pay out if the injured employee receives a settlement.


Will I Still Receive Compensation for My Injuries?

If everyone involved cooperates, yes. If you suffer an injury at work, your employer’s insurer will have to start making payments for your medical bills as well as any time you are forced to miss work.You will receive these benefits whether your lawsuit against the third party is successful. Where it becomes more complicated is when the third party has to pay for your medical expenses and other losses.


Not All Benefits Are Subject to Liens

The laws were implemented to prevent employers from being taken advantage of. If the injury was not actually a result of improper care on the employer’s end, they should not be held responsible for your injuries, just like you should not be held responsible.According to the California Department of Industrial Relations (DIR), these are the items that could have a lien placed on them.

  • Attorney fees
  • Burial expenses
  • Unemployment compensation disability benefits
  • Expenses for loved ones, such as a spouse or child
  • Unemployment compensation and other extended benefits to the family
  • Reasonable expenses for medical treatment
  • Indemnification granted by the California Victims of Crime Program

Noticeably absent are non-economic damages, such as pain and suffering, which your employer’s workers’ compensation insurance would not have to pay. Therefore, if you are granted a settlement that includes pain and suffering, your employer would not be entitled to any of that income.


What Is the Best Way to Handle a Lien?

When your employer seeks compensation for the benefits they already paid to you, you may want to consider hiring a lawyer to work on your behalf. They can help ensure that you are putting yourself in the best position to obtain optimal compensation.

Workers’ compensation lawyers can help with things like:

  • Ensuring you are paying as little as necessary
  • Ensuring you receive the correct compensation from your employer and the third party
  • Negotiating the lien amount

Negotiating a Lien Amount

When it comes to workplace injury, the injured employee should receive reimbursement for their injuries and missed work no matter what. However, whether an employer is left footing the bill depends on the results of a third-party lawsuit.For an employer, they know that if there is no third-party lawsuit, then they will be responsible for providing the benefits to ensure their employee recovers. However, if your attorney and your employer negotiate beforehand, you may end up being more likely to file a third-party lawsuit and even receive more in a settlement. This scenario is a win-win for both parties.


An Example of When Workers’ Compensation Is Relevant

In a very basic example, you are an employee working for a landscape company where you need to drive from house to house to provide your services. While driving from one house to another, you are involved in an accident that is the fault of another driver. You sustain serious injuries, and you are forced to go to the hospital and also miss work for an extended period of time.Your employer’s workers’ compensation immediately goes into effect, and they are responsible for your medical bills and providing for you for the time you miss work. However, because the other party is the reason for your injuries and your inability to work, you will file a lawsuit against them. Afterward, your employer places a lien on the personal injury matter.Your employer will receive the money that they gave you as a result of your injuries, and you may be able to collect more compensation from the third-party lawsuit than you would receive from workers’ compensation.


Deadline to File a Third-Party Lawsuit After a Workplace Accident

If you qualify to file a lawsuit against a third party, you must comply with certain time limits. According to CCP § 335.1, you usually have two years to sue for personal injury. Trying to file after that generally results in the court denying your case.

With enough notice, our lawyers can help ensure you meet the deadline.


Our Team Can Further Explain How a Workers’ Compensation Lien Works

If a third party is responsible for your work injury, obtain the assistance of a workers’ compensation attorney on our team. They can help you determine how to navigate your situation, including whether to file a lawsuit against that third party. Additionally, our attorney can speak with your employer’s insurance company and negotiate the lien amount to ensure you receive the best deal possible.

At KJT Law Group, we are ready to help you in your time of need. To learn more about how a workers’ compensation lien works, contact us at (818) 507-8525.

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