In this guide13 sections
- Key takeaways
- When you can settle
- How a stipulated award works
- How a compromise and release works
- Side-by-side comparison
- A worked example
- What the judge reviews before approving
- Future medical care and Medicare
- Liens, fees and what you take home
- Can a settlement be reopened?
- How to choose: a checklist
- Frequently asked questions
- Talk to a California workers’ comp lawyer
In California workers’ comp, a compromise and release (C&R) pays you one lump sum and usually closes your case for good, including future medical care. A stipulated award pays your permanent disability over time, keeps future medical care open, and can be reopened within five years of your injury. Neither one is final until a workers’ compensation judge approves it.
Key takeaways
- No C&R is valid unless a workers’ compensation judge or the appeals board approves it (Labor Code §5001), and a stipulation becomes an award only when a judge issues it.
- A stipulated award keeps the insurer responsible for treating your injury and can be reopened for new and further disability within five years of the date of injury (Labor Code §§5410, 5803).
- A C&R is negotiated, not set by formula. Compare it with the value of your rating plus the future medical care you would give up.
- If you are on Medicare or expect to be, closing medical care in a C&R may require a Medicare set-aside.
- The $6,000 job displacement voucher can’t be settled away in a C&R (Labor Code §4658.7(g)).
When you can settle
Most cases settle after you reach maximum medical improvement (MMI), also called permanent and stationary. At that point your treating doctor, a QME or an AME describes your permanent impairment and future medical needs, and that report is turned into a permanent disability (PD) rating.
Settling earlier is possible but risky. Before MMI, nobody knows how much permanent disability you will have or what treatment you will need. Our guide on when you can settle a workers’ comp case covers timing in more detail.
A California workers’ comp case usually ends one of three ways: stipulations with request for award, a compromise and release, or findings and award after a trial if the two sides can’t agree.
How a stipulated award works
You and the insurer sign a form agreeing on the key facts: the injury, the body parts, your earnings, your PD rating, the weekly rate and whether you need future medical care. A judge reviews it and, if it is adequate, issues an award the insurer must follow.
- Payments over time. PD is paid every two weeks until the full amount is paid. PD advances already paid are credited against the total.
- Future medical stays open. The insurer must keep providing reasonable and necessary treatment for the accepted injury. Requests still go through utilization review.
- Room to reopen. The appeals board keeps continuing jurisdiction, so you can petition to reopen for new and further disability within five years of the date of injury.
- Enforcement. If the insurer unreasonably delays or refuses payment, the delayed amount can be increased by up to 25 percent or $10,000, whichever is less (Labor Code §5814).
A stipulated award often fits workers who expect more treatment, such as a recommended surgery or ongoing medication, or whose condition may worsen. More in what is a stipulated award.
How a compromise and release works
A C&R must be in writing, and your signature must be witnessed by two disinterested witnesses or notarized (Labor Code §5003). It is filed with the appeals board and has no effect until a judge approves it.
- One payment. You receive a single check for the agreed amount, minus approved attorney’s fees and any liens the agreement says will be paid from it.
- Future medical usually ends. According to the Division of Workers’ Compensation, after a C&R is approved the claims administrator usually isn’t liable for any further payments or medical care.
- The amount is negotiated. It can be more or less than the value of your rating plus your future care, depending on the disputes in your case.
- The voucher is separate. If you qualify for the $6,000 supplemental job displacement voucher, it can’t be settled or commuted in a C&R.
A C&R often fits workers who want to control their own medical care, who are leaving the job or the state, or whose case has serious disputes, such as whether the injury is work-related.
Side-by-side comparison
| Issue | Stipulated award | Compromise and release |
|---|---|---|
| How you are paid | Every two weeks until the PD total is paid | One lump sum |
| Future medical care | Stays open for the accepted injury | Usually closed |
| Reopen if you get worse | Yes, within 5 years of the injury date | Generally no |
| How the amount is set | By your PD rating and weekly rate | Negotiated |
| Judge approval | Required | Required |
| Medicare issues | Usually fewer, because medical stays open | May need a Medicare set-aside |
| Job displacement voucher | Not affected | Can’t be settled |
A worked example
Here is a hypothetical. Darnell, a warehouse worker injured in 2023 who earned more than $435 a week, has a 15 percent rating and a doctor’s note that he may need surgery later. Under a stipulated award, 15 percent is 50.5 weeks of PD at $290 a week, or $14,645 paid over time, and his future medical care stays open.
If the insurer instead offers a $25,000 C&R, roughly $14,645 of it reflects PD he would receive anyway. The remaining $10,355 is, in rough terms, what he is being offered to give up future medical care and his right to reopen, before fees, liens and the timing of payments. He should weigh that against what the surgery and follow-up care could cost. Our workers’ comp calculator and permanent disability pay chart can help you run your own numbers.
What the judge reviews before approving
Signing the paperwork isn’t the end. The appeals board must look into the adequacy of every C&R and stipulation, and may approve it, disapprove it or set the case for hearing (8 CCR §10700). In a June 2026 en banc decision, the Workers’ Compensation Appeals Board confirmed that a settlement is enforceable only after approval, and that the judge must decide whether the agreement is valid and adequate to protect the injured worker.
The same decision stressed the limits of that review. If the judge has concerns, the judge may suspend action to get more information and hold a hearing if needed, but the parties are entitled to notice and an opportunity to be heard. In practice, be ready to explain how the numbers were reached, especially if a C&R is well below the value of your rating or closes medical care you may still need.
Future medical care and Medicare
Future medical care is often the most valuable part of a case and the easiest to undervalue. Before closing it, ask your treating doctor what care you are likely to need, such as surgery, injections, therapy, medication or imaging, and estimate what it would cost without workers’ comp.
If you are on Medicare, or expect to be, and your settlement closes future medical care, federal rules require that Medicare’s interests be considered. That often means a Medicare set-aside. Our Medicare set-aside guide explains how it works.
Liens, fees and what you take home
- Liens. Medical providers and others may file liens. The Employment Development Department can claim a lien for state disability benefits it paid while workers’ comp should have been paying (Labor Code §4903(f)). See liens on a workers’ comp settlement.
- Attorney’s fees. Fees in workers’ comp must be reasonable, and the appeals board decides what is reasonable (Labor Code §4906).
- Advances. PD advances already paid are subtracted from the PD owed.
Can a settlement be reopened?
A stipulated award can. Labor Code §5410 lets you start proceedings within five years after the date of injury if the original injury has caused new and further disability. The five years run from the date of injury, not the date of the award, so a case that settles late may leave only a short window.
A C&R generally can’t. Once approved, it resolves the claim it covers. It may be set aside only in narrow situations, such as fraud or a serious defect in how the agreement was made, so treat it as permanent.
How to choose: a checklist
- Confirm your rating and weekly rate.
- Price your future care with your doctor’s input.
- Check Medicare before you negotiate.
- Subtract the stipulated PD value from any C&R offer to see what you are being paid to close medical care.
- Get a written breakdown of liens, fees and advances.
- Read every page and get a lawyer’s review before closing medical care. See should I accept my settlement offer?
Frequently asked questions
Which is better, a C&R or a stipulated award?
Neither is better for everyone. A stipulated award is usually safer if you expect more treatment or your condition may worsen. A C&R can make sense if you want closure, want to choose your own doctors, or your case has disputes that make a lump sum worthwhile.
Does a C&R pay more than a stipulated award?
Not necessarily. A C&R that looks higher on paper may be a worse deal once you account for the medical care and reopening rights you give up.
Can I reopen a compromise and release?
Generally no. Only a stipulated award can be reopened for new and further disability, and only within five years of the date of injury.
How long does a C&R take to pay?
Payment follows the judge’s order approving it. Unreasonable delay after approval can increase what the insurer owes under Labor Code §5814.
Can I settle before I reach MMI?
You can, but it is risky because your permanent disability and future medical needs aren’t yet known.
Talk to a California workers’ comp lawyer
Employees First Labor Law represents workers exclusively, including injured workers weighing a settlement offer. We offer free virtual consultations to compare a C&R with a stipulated award in your case. Contact us online or call (310) 853-3461.
This article is general information about California law as of 2026, not legal advice for your situation. Reading it does not create an attorney-client relationship.
