Can you get a Settlement from Workers’ Comp?

an employee successfully getting a settlement from workers' comp
Mordechai Kamenetsky
Last Updated: 
March 29, 2024

You can get a settlement from workers’ comp for job-related injuries or illnesses, covering costs like medical care and lost wages. The process involves reporting the injury, filing a claim, and possibly negotiating a settlement. Settlement times vary, and most are tax-exempt federally.

Table of Contents

What is the process for Workers’ Comp Claims?

Before we talk about settlements, you need to be sure you understand the overall workers’ compensation claims process. If an employee suffers a work-related illness or injury, they can seek out benefits using the workers’ compensation insurance provided by their employer. 

There are a variety of steps involved in this process, which we’ll delve into more below.

Reporting the Injury

Reporting the Injury

The first thing you need to do as an employee is to report illness or injury to your employer. 

If you do not do this within a certain amount of time, you may have trouble filing a claim. In some cases, you may be out of luck doing so at all. 

It’s vital to let your employer know as quickly as possible.

Seeking Medical Treatment

Seeking Medical Treatment

Next, make sure you seek out medical treatment from a healthcare provider. This should be someone who is authorized by your employer’s workers’ comp insurer. Unless it is an emergency, you should ask your employer where you can go.

Your safety and health are important. You want to be sure you have your injuries documented so your claims go through smoothly and you receive any compensation you deserve. 

Filing the Claim

Filing the Claim

Either your employer or their insurance company will give you the forms you need to file a workers’ compensation claim. Be sure you are accurate and thorough when you fill out these forms. To do otherwise could lead to a delay or even a denial. 

Waiting for the Investigation and Decision

Waiting for the Investigation and Decision

After you file the claim, you are going to need to wait for the process to be completed. The insurance provider will investigate the circumstances associated with your injury. 

During that time, they may ask for additional information or medical records so they can determine whether the claim is valid. Once the review is complete, they can choose to approve or deny your claim.

Can a Workers’ Comp Claim be Denied?

A question almost as common as “Can you get a settlement from workers’ comp?” is “Can a workers’ comp claim be denied? Sadly, the answer is yes. A workers’ comp claim can be denied. There are numerous reasons why this might occur. 

Here are a few of the most common:

  • No evidence supports the claim that the injury or illness was related to work
  • A dispute occurs over whether the injury was sustained while being employed
  • The injury was not reported within the required timeframe

If you have a claim that is denied, you are allowed to appeal that decision to get a new one. It’s best to team up with a workers’ compensation attorney to move through the appeal. They will be by your side to help you advocate for your rights.

What happens at a Workers’ Comp Settlement Hearing?

Depending on the situation, some cases may not need to move to a hearing. In those cases, a settlement can be negotiated without it. 

However, if this isn’t possible through mediation or negotiation, the case may still need to move forward to a workers’ comp settlement hearing. 

Can you get a settlement from workers’ comp in this case? Yes, in many cases.

The actual hearing is a formal situation where you and the other party present arguments and evidence before a judge. There are numerous parts of the process. We’ll share the basics below, so you know what to expect as you move forward.

Negotiation or Mediation

Before the hearing begins, negotiation or mediation is usually done first. This is a great way to reach a settlement in some situations. While these discussions occur, each side can evaluate the strengths and weaknesses of their case and try to find commonalities to move forward. 

If mediation is chosen, a neutral third party can help with negotiation and communication between both sides.

Preparation for the Hearing

Preparing for the hearing is the next step if mediation and negotiation do not work out. The worker who is injured and the employer’s representative (this is often an insurance company) find all the evidence available to support their side of the case. 

This could include expert opinions, witness statements, accident reports, and medical reports. Both parties can also prepare their legal arguments about why they feel justified in their position based on workers’ compensation laws.

Presentation of Evidence

Next, the hearing will begin. Both sides can present their arguments and evidence before the judge. This could include calling on witnesses to testify, which can involve coworkers, supervisors, medical experts, and others who have insight into how the injury happened. 

Providing useful evidence and testimony is important to persuade the judge that their party is right. 


The administrative law judge will consider all the evidence involved with the hearing before deciding how to move forward. 

If there has been a settlement agreement, the judge will look over the terms to make sure they meet all legal requirements and are fair to both sides. Assuming the settlement is approved, it is then binding, and the case is complete. 

On the other hand, if there is no settlement reached, the judge will come up with a decision based on applicable workers’ compensation laws and the merits of the case. 

How long does it take to get a Workers’ Comp Settlement?

When it comes to the timeline for receiving a workers’ comp settlement, various factors come into play. All of them will impact the amount of time the process takes. 

For instance, the willingness of both sides to negotiate and find a resolution that both can agree on is essential to move things forward more quickly. If each party is open to compromise and willing to cooperate, settlements will take less time to be provided. 

However, if there is a disagreement or argument about the settlement terms, negotiations will take longer, which also means a settlement won’t be available right away.

Another factor to consider is how many cases are already on the docket related to the workers’ comp system. If a backlog is present, delays in processing claims are more common. 

Limited resources and high caseloads can result in a longer wait for hearings and decisions, which also impacts the amount of time until you get the proceeds of a settlement.

Some settlements go quickly, while others may take months (or years in some cases) to reach the end. Being persistent and patient is important as you work through the process. 

Working with professionals is a good way to ensure everything goes smoothly and you get the settlement you’re entitled to.

Do you pay taxes on a Workers’ Comp Settlement?

In most cases, worker’s compensation settlements do not require you to pay federal taxes. They are meant to help ease the financial burdens of workers who are injured as employees. The Internal Revenue Service (IRS) has exempted these payments from taxes. 

At the same time, this doesn’t always apply to state taxes. These laws vary by state, so the regulations are not always the same. 

It’s important to investigate your state and how it handles worker’s comp settlements. The best way to do that is by connecting with a tax advisor who has insight into potential tax implications associated with your settlement.

Can you get a Settlement from Workers’ Comp? Final Considerations

At this point, you can answer the question, “Can you get a settlement from workers’ comp?” Workers’ comp settlements are a useful way for injured workers to get compensation for work-related illnesses or injuries.

The process might seem overwhelming, but you need to be aware of the steps involved and who to seek out when you need help moving forward while you navigate the various steps in the process.

Whether you have a claim approved, denied, or settled, it’s important to prioritize your health and advocate for your rights. This is the best way to ensure you get compensation for an injury or illness you suffered because of your employment. 

Follow the steps above to ensure you have the best chance of getting the results you deserve. 

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Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.

Mordechai Kamenetsky

Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.

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