How Do Settlements Work in Workers’ Compensation Cases?

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Settlements in workers’ compensation cases are very different than settlements in other kinds of personal injury matters. It is important to understand why.

Many people assume that when they get hurt at work, workers’ compensation insurance will reimburse them fairly for everything they have suffered and lost. Many people also assume that workers’ compensation will pay for all their medical treatment and pay their wages while they are unable to work.

This is partially, but not entirely, true.

Workers’ compensation insurance does not always reimburse an injured worker fairly. An experienced workers’ compensation attorney will fight for the compensation you may deserve.

The 3 Kinds of Workers’ Compensation Benefits You Can Receive If You Are Injured at Work in North Carolina

The three kinds of workers' compensation benefits - medical treatment, wage loss & permanent impairment rating payment.

The actual benefits that an injured worker gets through workers’ compensation are determined by state law. North Carolina workers’ compensation law says that there are three benefits you can receive if you are injured at work:

    1. Wage loss,


    1. Medical treatment, and


    1. Payment of a permanent impairment rating if your doctor gives you one at the end of your treatment


However, there are limitations on all these benefits. The law also says:

    • You are only entitled to get two-thirds of your normal wages while you are recovering from your injury and unable to work.


    • The workers’ compensation insurance company gets to select your doctors, not you.


    • The amount of your permanent impairment rating depends on how much money you make – if you earn less, your permanent impairment rating will be worth less than someone who earns more.


There is a lot that is unfair in the way North Carolina workers’ compensation law was written, which is why it’s important that you speak with an experienced workers’ comp attorney.

People are most shocked when they find out that workers’ compensation law does not include any settlement money for the pain and suffering they and their family go through. This is perhaps the most upsetting thing of all.

Maximum Medical Improvement or MMI

In most cases, settlement does not take place until the medical treatment is completed and the doctor releases you from treatment. This is called reaching maximum medical improvement, or MMI, for short.

At MMI, the doctor will decide:

    1. Whether you have any permanent impairments


    1. Whether you have any permanent physical restrictions


    1. The doctor may also address your risk of any additional necessary medical treatment in the future.


These are the things that determine how much your case is worth in settlement.

Settling a Workers’ Compensation Case

Your workers’ compensation attorney will analyze the factors the doctor provided to determine how much money they believe workers’ compensation should pay you to settle your case fairly.

If you have no physical restrictions and can return to your regular job, your settlement will be based on the value of your rating, but there will be no money offered for wage loss. You will be expected to return to your pre-injury job. In this situation, you will still be able to get additional medical treatment if you need it within a two year period from when the payment for your rating was issued.

On the other hand, if your physical restrictions prevent you from returning to your pre-injury job, your settlement will include money for future wage loss benefits and future medical treatment. You will generally be expected to resign from your job. In this situation, we will have to negotiate with the workers’ compensation insurance company because your settlement will be based on how long it takes you to find another job, what your earnings will be at the new job, and the cost of future medical treatment you might need for your work injury. Since neither side has a crystal ball, there is usually a lot of room to negotiate.

What Happens at a Workers’ Compensation Settlement Negotiation?

Settlement negotiations are usually done at a mediation, which is also known as a settlement conference. You will be expected to attend the mediation with your attorney. There will also be an attorney there representing your employer and their workers’ compensation insurance company. Both attorneys have to agree in advance on selecting a professional mediator to run the mediation. These professional mediators are attorneys who are very knowledgeable about NC workers’ compensation law, but they do not know anything about your case until the opening session. Mediations usually last about three to four hours and are held in one of our offices that is closest to where you live.

    • The first thing that happens at the mediation is called an opening conference. This is when all the parties meet together in one room. The mediator starts out by explaining the process and then asks your attorney to explain the facts of your case. It is not necessary for you to say anything during the opening conference.


    • After your attorney has told the mediator what is important about your case, the employer and insurance company attorney will have a chance to tell the mediator what their clients want the mediator to know about the case.


    • After the mediator understands the issues and the differences between how the attorneys see the case, the sides will separate into different rooms.


    • From then on, the mediator will move between the two rooms exchanging information, monetary offers, and counter offers.


    • The mediation will continue until the sides have reached an agreement to settle the case or the mediator decides that the sides are too far apart in their evaluations of how much the case is worth. In that situation, the mediator will close the mediation and call an impasse.


If the parties agree on a settlement amount and other terms, a document will be signed, which is a binding legal contract that a court would enforce if either side tried to back out later.

If the parties don’t agree on a settlement amount, there could be a hearing at the North Carolina Industrial Commission (NCIC) if either side has filed a hearing request. If no hearing request has been filed, the case will continue until such time as a settlement can be reached in the future.

Why Settle a Workers’ Compensation Case?

A large majority of workers’ compensation cases settle at mediation. Both sides generally prefer to have some measure of control over the outcome, which they don’t have if a NCIC hearing officer is the decision maker.

In addition, mediation is much faster than going to court. It can take almost a year to get a decision from the NCIC hearing officer, and the decision can be appealed by either side, which can add more years to the process.

Finally, the hearing officer at the Industrial Commission is not allowed to decide what a case is worth. The hearing officer can only make limited decisions, such as whether an injured worker is entitled to more treatment or to see a different doctor.

If you settle at mediation, you will generally receive your settlement within several months and you can move forward with your life on your own terms without the interference of the workers’ compensation system.

Contact a North Carolina Workers’ Compensation Lawyer

The workers’ compensation team at the Law Offices of James Scott Farrin includes nine North Carolina State Bar Board Certified Specialists in Workers’ Compensation Law. Our team of legal professionals is ready to serve you in your workers’ compensation matter. Please call 1-866-900-7078 today, or contact us here for a free, no-obligation case evaluation.

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About the Author

Susan Vanderweert practices workers’ compensation law in North Carolina for the Law Offices of James Scott Farrin. Previously, she represented the other side – insurance companies and employers – but moved on to fight on behalf of employees. Susan is a North Carolina State Bar Board Certified Specialist in Workers’ Compensation Law, and she was selected by peers to the annual “Best Lawyers”a list for Workers’ Compensation Law in 2021 and 2022 by Best Lawyers in America.

aFor more information regarding the standards for inclusion, please visit