California residents hurt in the workplace have an option under California law to receive quicker compensation for their injuries by settling their claim with their employer and receiving their compensation in a lump sum. Settling workplace claims in this manner offers both benefits and possible disadvantages.
According to California’s Department of Industrial Relations, a worker may decide to settle the case for a lump sum payment under a Compromise and Release agreement. Under a C&R, a worker settles all the aspects of a claim with their employer. Instead of receiving a series of payments, the worker is awarded a single sum. A C&R also offers greater assurance of receiving compensation, as there are no future payments that could still be contested by the employer. A worker may also receive more money than under Stipulated Findings and Award since the injured party is surrendering claims to future money.
However, settling for a lump sum can close off options for future financing. California’s Department of Industrial Relations lays out the possible disadvantages of a lump sum settlement. First, once an injured party has settled with an employer, more employer financing for future medical treatment cannot be requested from that employer. Also, a worker who has settled cannot claim more benefits in the event of worsening health, and if the worker should die from workplace injuries, death benefits will not be paid out to the dependents of the deceased. Additionally, a Compromise and Release settlement is almost impossible to revisit barring exceptional circumstances.
Lump sum payments provide quicker and possibly more generous access to compensation while closing off almost all possible legal recourses. Ultimately, injured workers must assess their own situation and decide if a Compromise and Release agreement best serves their interests.
