What is a workers’ compensation lien?
You might have a negligence claim against a third party for your work injury. A lien is your employer’s way of recovering the benefits they paid you from that third party.
Workers’ compensation is commonly thought of as the employee’s only way to get compensation for an injury that happens on the job. While it is true that you cannot sue your employer even if they cause your injury through their negligence, workers’ compensation does not keep you from filing a lawsuit against a third party whose negligence is responsible for the accident.
A third party is a party that is outside the employment relationship between you and your employer. Here are some examples of third-party liability for a work accident:
- You are on the road making deliveries or picking up supplies for your employer when you are injured in a traffic accident caused by a negligent driver.
- You are working off-site on another party’s premises when you slip and fall or incur some other injury because of a dangerous condition on the premises that the property owner knew about but failed to warn you of. Fixing the hazard must not be the reason you were there in the first place.
- You are injured by a defective power tool, machinery, or some other piece of equipment that was defective when it left the manufacturer.
In all of the above examples, you could file a lawsuit against the negligent third party and also file a claim for workers’ compensation benefits as well. In a negligence lawsuit, you could recover compensation for your medical expenses in addition to lost wages, which is also what your employer has to pay you in workers’ comp. To keep you from recovering more than you are entitled to, your employer could place a lien on your personal injury claim. If you are successful in your third-party lawsuit, your employer could get reimbursed from the proceeds of the lawsuit for the workers’ compensation benefits they paid, and you would keep the rest.
Have your attorney negotiate the size of the lien
A negligence lawsuit settlement or judgment will typically be larger than a workers’ compensation award, since in a lawsuit you can recover compensation for harm such as pain and suffering and emotional distress that workers’ comp doesn’t pay for. Still, you are the one who was injured, and you want to be able to keep as much of the settlement as you can. If your employer places too large of a lien on your lawsuit, you might decide it’s not worth it and drop the suit altogether, leaving your employer stuck with paying you workers’ comp. With this leverage in mind, your attorney can work with your employer to negotiate the size of the lien they put on your third-party claim.
