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Both Section 20 and Section 22 Settlement Options Have Pros and Cons

If you had to file a workers’ compensation claim, you have probably learned that it is a fight to get your employer to pay you the benefits you deserve. At some point in the legal process, your employer will most likely agree to settle your workers’ compensation case. At that point, you could have some decisions to make on how to structure your settlement.

In New Jersey, there are two ways to settle a workers’ compensation claim: a Section 20 final lump sum payment or an order-approving settlement under Section 22. Each has its benefits and drawbacks.

Section 20 Lump Sum Settlements

A Section 20 settlement is a lump sum full and final payment of a claim. Key features of this type of settlement include:

  • The worker receives a lump sum payment rather than weekly payments over time.
  • The employer does not admit any liability.
  • The payment is not considered a workers’ compensation payment except for insurance rating purposes.
  • The employee cannot reopen the case in the future.
  • Both the employee and employer must agree to the Section 20 settlement, and the judge must approve it.
  • There must be a genuine issue about jurisdiction, dependency, the cause of the injury, or liability in order to enter into a Section 20 settlement.

Section 22 Order-Approving Settlements

In New Jersey, many more workers’ compensation claims settle under a Section 22 order-approving settlement than a Section 20 lump sum. In these results, a percentage of disability is apportioned to the injured part of the body. For example, if a worker injured his knee and required surgery, he could get an award of 20 percent disability of his leg. He would be entitled to a monetary award based on a rate chart prepared yearly by the New Jersey Department of Labor. The person could still work, but the award compensates him for a permanent injury that affects his daily or work life. Key features of this type of settlement include:

  • The employee receives a percentage of disability.
  • The employee can reopen the case to modify the award within two years of the last payment to seek additional medical payments and temporary or permanent disability payments.
  • The employer accepts a specific medical condition or conditions.
  • If the worker is reinjured in the future and suffers the same medical problem, the employer will get a credit for the percentage paid.

Settling a workers’ compensation claim can be complicated. That is why it is so important to contact an experienced workers’ compensation attorney who can explain the settlement options to you and help you get the best results you can.

Have you have suffered a workplace injury and need to file a workers’ compensation claim? Order our FREE electronic book, What the Injured Worker Needs to Know. Your Workers’ Comp Guide, to begin learning about your legal rights as an employee. And call us at 877-360-0183 for a FREE consultation to find out how we can help you.

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