Workers' comp settlements, and when you can sue
Short answer
- Workers' comp pays medical care and part of lost wages whoever was at fault, but not pain and suffering, Cornell's Legal Information Institute says.
- No public source reports an average settlement.
- In New Jersey, comp is generally your only remedy against your employer, but you can claim against someone else who caused it.
Checked October 20, 2026.
Sources: Wex, Workers' Compensation Acts; N.J.S.A. 34:15-8; N.J.S.A. 34:15-40; N.J.S.A. 34:15-51; N.J.S.A. 34:15-17. Every fact cites a source
What workers' comp pays
Workers' comp laws are state laws. They require employers to buy insurance, and they make employers liable for injuries on the job and illnesses from the work, whoever was at fault.
- Medical careMedical coverage for the injury or illness.Source: Wex, Workers' Compensation Acts
- Part of your lost wagesA percentage of the wages you lose, not all of them.Source: Wex, Workers' Compensation Acts
- RetrainingThe costs of training for other work.Source: Wex, Workers' Compensation Acts
- A permanent injuryCompensation for any permanent injury.Source: Wex, Workers' Compensation Acts
- Not pain and sufferingComp doesn't include general damages for pain and suffering.Source: Wex, Workers' Compensation Acts
Whose program covers you
The U.S. Department of Labor runs four programs: for federal employees, longshore and harbor workers, black lung, and energy employees' work illnesses.
Source: Workers' CompensationWorkers at private companies and at state and local governments go to their state's workers' comp board.
Source: Workers' CompensationA claim goes to the Division of Workers' Compensation, by a claim petition.
Source: N.J.S.A. 34:15-8; N.J.S.A. 34:15-40; N.J.S.A. 34:15-51; N.J.S.A. 34:15-17Can you sue your employer?
Your state's comp law decides who you can sue. In New Jersey, it turns on who caused the injury.
Workers' comp is generally the only remedy against them, except for an intentional wrong.
Source: N.J.S.A. 34:15-8; N.J.S.A. 34:15-40; N.J.S.A. 34:15-51; N.J.S.A. 34:15-17A claim is still allowed, like one against another driver on a work trip or another company on a job site. Your employer or its insurer is paid back from what it recovers.
Source: N.J.S.A. 34:15-8; N.J.S.A. 34:15-40; N.J.S.A. 34:15-51; N.J.S.A. 34:15-17What workers' comp claims are worth
No public source we can check reports an average workers' comp settlement. What is published is what claims cost. The National Safety Council reports these averages from the National Council on Compensation Insurance's data, for accidents in 2022 and 2023.
- All claims$47,316 on average.Source: Injury Facts, Workers' Compensation Costs
- Motor vehicle crashes$91,433, the most costly cause of lost-time claims.Source: Injury Facts, Workers' Compensation Costs
- Burns$64,973.Source: Injury Facts, Workers' Compensation Costs
- Falls or slips$54,499.Source: Injury Facts, Workers' Compensation Costs
- Amputations$125,058, the most costly kind of injury.Source: Injury Facts, Workers' Compensation Costs
These are what claims cost on average. They aren't settlement amounts, and they aren't a value for anyone's claim.
Source: Injury Facts, Workers' Compensation CostsBefore you settle
A settlement can close parts of a claim for good, so a few rules matter first.
Part of a settlement may be set aside to pay for future care of the injury. That money has to be used up before Medicare pays for that care.
Source: Workers' Compensation Medicare Set Aside ArrangementsNo law requires sending Medicare a set-aside proposal, but it's the recommended process. Medicare reviews one if you're on Medicare and the settlement is over $25,000, or you expect Medicare within 30 months and it's expected to be over $250,000.
Source: Workers' Compensation Medicare Set Aside ArrangementsFederal law leaves amounts received under workers' comp acts for personal injuries or sickness out of income.
Source: 26 U.S.C. 104(a), Compensation for injuries or sicknessA Section 20 settlement needs a lawyer for you and a judge who finds it fair and just. It ends the claim: you give up any future comp for the injuries it covers.
Source: N.J.A.C. 12:235-3.13Workers' compensation is on the state's list of exempt, nontaxable income.
Source: New Jersey Division of Taxation, Exempt (Nontaxable) IncomeNJDo you need a lawyer for workers' comp?
It's your call. In New Jersey, a few rules shape it.
- The judge sets the feeA judge of compensation may allow a reasonable fee, up to 25% of the judgment.Source: N.J.S.A. 34:15-64(a), as amended by P.L.2024, c.55; Acting Governor's bill signing, August 22, 2024
- A settlement that closes the claim needs oneA judge can approve a Section 20 settlement only when you have a lawyer.Source: N.J.A.C. 12:235-3.13
- Someone else caused itA claim against them is allowed alongside comp, with its own deadline to sue.Source: N.J.S.A. 34:15-8; N.J.S.A. 34:15-40; N.J.S.A. 34:15-51; N.J.S.A. 34:15-17; N.J.S.A. 2A:14-2(a)
- You didn't tell your employer right awayNo comp is allowed without notice or the employer's knowledge within 90 days.Source: N.J.S.A. 34:15-8; N.J.S.A. 34:15-40; N.J.S.A. 34:15-51; N.J.S.A. 34:15-17
NJHurt at work in New Jersey: the deadlines
- Tell your employerN.J.S.A. 34:15-17Within 14 days
- No comp without notice or knowledge afterN.J.S.A. 34:15-1790 days
- File the comp claim petitionN.J.S.A. 34:15-512 years after the accident or the last payment
- Sue someone else who caused it, in generalN.J.S.A. 2A:14-2(a)2 years
- A claim against a public entityN.J.S.A. 59:8-8Notice within 90 days
Sources
- Wex, Workers' Compensation ActsWhat workers' comp laws do, what they pay, and that they don't pay pain and suffering. Checked .
- N.J.S.A. 34:15-8Justia, 2025 New Jersey Revised Statutes. Checked .
- N.J.S.A. 34:15-40Justia, 2025 New Jersey Revised Statutes. Checked .
- N.J.S.A. 34:15-51Justia, 2025 New Jersey Revised Statutes. Checked .
- N.J.S.A. 34:15-17Justia, 2025 New Jersey Revised Statutes. Checked .
- Workers' CompensationThe federal programs the Department of Labor runs, and where everyone else's claim goes. Checked .
- Injury Facts, Workers' Compensation CostsWhat workers' comp claims cost on average, from insurers' data. Costs, not settlements. Checked .
- Workers' Compensation Medicare Set Aside ArrangementsWhat a Medicare set-aside is, and when Medicare reviews one. Checked .
- 26 U.S.C. 104(a), Compensation for injuries or sicknessThe federal law that leaves workers' comp out of income. Checked .
- N.J.A.C. 12:235-3.13Legal Information Institute, Cornell Law School, New Jersey Administrative Code. Checked .
- New Jersey Division of Taxation, Exempt (Nontaxable) IncomeWorkers' comp is exempt from New Jersey income tax. Checked .
- N.J.S.A. 34:15-64(a), as amended by P.L.2024, c.55New Jersey State Library, P.L.2024, c.55. Checked .
- Acting Governor's bill signing, August 22, 2024State of New Jersey, Office of the Governor (Internet Archive copy). Checked .
- N.J.S.A. 2A:14-2(a)Justia, 2025 New Jersey Revised Statutes. Checked .
- N.J.S.A. 59:8-8Justia, 2025 New Jersey Revised Statutes. Checked .
- N.J.S.A. 59:8-9Justia, 2025 New Jersey Revised Statutes. Checked .
General information, not legal advice. We don't know the facts of your claim. A lawyer can review them, and most injury lawyers offer a free consultation.
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Questions people ask
What is the average workers' comp settlement?
No public source we can check reports one. The National Safety Council, from NCCI's data, puts the average cost of a claim at $47,316 for accidents in 2022 and 2023. That's what claims cost, not a settlement amount.
Can I sue my employer for an injury at work?
Your state's comp law decides. In New Jersey, workers' comp is generally the only remedy against your employer and co-workers, except for an intentional wrong. A claim against someone else who caused the injury is still allowed.
Does workers' comp pay for pain and suffering?
No. Comp covers medical care, part of lost wages, retraining and permanent injury, but not general damages for pain and suffering, according to Cornell's Legal Information Institute.
Do I need a lawyer for workers' comp?
You decide. In New Jersey, the judge sets a comp lawyer's fee, up to 25% of the judgment, and a Section 20 settlement can be approved only when you have a lawyer.
Is a workers' comp settlement taxable?
Federal law leaves amounts received under workers' comp acts for personal injuries or sickness out of income. New Jersey lists workers' compensation as exempt from its income tax.
What is a Section 20 settlement in New Jersey?
A settlement that closes the claim. A judge can approve one only when you have a lawyer, the case has contested issues, and the judge finds it fair and just. You give up any future comp for the injuries it covers.
How long do I have to file a workers' comp claim in New Jersey?
File the claim petition within 2 years after the accident, or after the last comp payment if some was paid. Tell your employer within 14 days.