A workers’ compensation settlement can provide financial breathing room after a workplace injury, but understanding what an offer covers is essential. Your wages, ability to work, and future treatment needs can all affect its value.

In New York, a Section 32 waiver agreement is negotiated rather than calculated using one fixed settlement formula. The parties consider the benefits potentially payable under the claim, disputed issues, and whether future medical coverage will remain open. Weekly wage benefits and schedule loss of use awards have statutory calculations that help inform those negotiations, but neither automatically determines a settlement amount.

Before accepting an offer, it helps to understand how those calculations work, which rights you would give up, and how much of the settlement you would actually receive.

Key Takeaways: How Workers’ Comp Settlements Are Calculated in New York

• Section 32 settlements are negotiated: There is no single formula that determines the settlement value of every New York workers’ compensation claim.
• Your average weekly wage helps establish your benefit rate: This figure generally reflects gross earnings before the injury, with adjustments depending on your employment circumstances.
• Permanent disability benefits follow different rules: Schedule loss of use awards use statutory schedules, while non-schedule permanent partial disability benefits involve loss of wage-earning capacity and other factors.
• Medical benefits can remain open: A settlement may resolve wage benefits while preserving medical coverage, or it may also close future medical benefits.
• The Workers’ Compensation Board must approve the agreement: Signing a Section 32 agreement does not, by itself, make it final.
• The gross offer may exceed your take-home payment: Attorney fees, applicable deductions, and funds allocated for future medical care affect how much money is available for other needs.

What Factors Determine a Workers’ Comp Settlement in New York?

A Section 32 settlement is an agreement between the injured worker and the employer’s insurance carrier or other responsible payer. Both sides must accept its terms. The Workers’ Compensation Board reviews the agreement but does not negotiate the amount for you.

Factors that may affect the offer include:

• Your average weekly wage and applicable weekly benefit rate.
• The nature, extent, and expected duration of your disability.
• Benefits already paid and benefits that remain potentially payable.
• Your ability to return to work and earn wages.
• Expected future medical treatment, if medical benefits are being settled.
• Disputes about whether an injury is work-related or how much disability it causes.

The maximum weekly benefit adjusts each July 1 under a statutory formula tied to New York’s statewide average weekly wage. Your injury date determines the applicable maximum. Later annual increases generally do not raise the maximum for an existing injury.

Higher earnings can support a higher weekly benefit rate, but only within applicable statutory limits.

How Are Weekly Wage Benefits Calculated?

Your average weekly wage is a weekly earnings figure, generally based on gross pay during the 52 weeks before your injury. It includes overtime and may include other compensation.

It is not necessarily calculated by dividing your annual earnings by 52. Your work schedule, seasonal employment, shorter employment history, or qualifying concurrent employment can affect the calculation.

For temporary disability, the general calculation is:

Two-thirds of your average weekly wage × your percentage of disability = weekly benefit, subject to applicable limits.

At an average weekly wage of $900, the basic formula produces $600 per week for total temporary disability or $300 for 50% temporary disability. These are preliminary calculations, not necessarily the amounts payable. New York’s injury-date-specific minimum and maximum benefit rules must then be applied, along with any other applicable adjustments.

You may qualify for weekly wage replacement when a compensable work injury causes lost wages or reduced earning capacity and you meet applicable eligibility requirements. Being unable to perform your regular job does not automatically establish entitlement to ongoing checks.

How Do Permanent Disability Findings Affect the Calculation?

Permanent disability benefits depend on the type of injury and its lasting effects. A schedule loss of use award and a non-schedule permanent partial disability classification follow different rules.

After you reach maximum medical improvement, medical providers evaluate permanent impairment and functional limitations. Maximum medical improvement means further significant improvement is not expected; it does not necessarily mean you no longer need treatment.

Schedule loss of use awards

A schedule loss of use award compensates for permanent loss of function involving certain body parts, vision, or hearing. The Board determines the loss-of-use percentage based on the evidence.

For example, New York assigns an arm a maximum schedule of 312 weeks. A 25% loss of use produces:

312 weeks × 25% = 78 weeks of benefits.

At a $600 weekly rate, the gross award would be:

78 weeks × $600 = $46,800.

Temporary disability payments already made are generally credited against the award. Attorney fees and other applicable deductions can also affect the remaining payment.

An SLU award is different from a Section 32 settlement. Receiving an SLU award as a lump sum does not, by itself, close future medical benefits.

Non-schedule permanent partial disability

Permanent injuries involving areas such as the spine or lungs generally fall outside the body-part schedule. The Board considers medical evidence and vocational factors, including age, education, work history, and transferable skills, when determining loss of wage-earning capacity.

For injuries or dates of disablement on or after March 13, 2007, ordinary non-schedule permanent partial disability benefits have statutory maximum durations ranging from 225 to 525 weeks. The applicable maximum depends on loss of wage-earning capacity. It is not a guarantee of payment for every week.

A medical impairment rating alone does not determine the weekly payment or the settlement value.

How Do Lost Wages and Future Medical Care Affect Settlement Value?

Potential future wage benefits and medical expenses can be important parts of a settlement negotiation, but insurers do not have to calculate an offer by simply adding all remaining checks to the full estimated lifetime cost of treatment.

The parties may consider how long benefits could remain payable, whether eligibility is disputed, and the likelihood of future treatment. The negotiated amount also depends on which benefits the agreement resolves.

If your doctor expects additional surgery, medication, therapy, or other treatment, those needs should be evaluated before you agree to close medical benefits. The cost and uncertainty of that care can affect whether an offer adequately addresses your future needs.

If you settle only wage benefits, future medical costs remain outside that closure.

Can Medical Benefits Remain Open After a Settlement?

A Section 32 agreement may resolve indemnity benefits—the payments for lost wages—while leaving medical benefits open. It may also settle both portions of the claim.

If medical benefits remain open, the insurer remains responsible for covered work-related treatment under the claim, subject to applicable rules.

If the final agreement closes future medical benefits, you become responsible for treatment costs covered by that closure. An unexpected worsening of your condition does not automatically restore the medical benefits you waived.

When future medical benefits are settled, Medicare’s interests must also be considered when applicable. A Workers’ Compensation Medicare Set-Aside arrangement allocates settlement funds for future injury-related medical services that Medicare would otherwise cover. Those funds are intended for qualifying medical expenses and should not be treated as money freely available for household spending.

What Can Reduce the Amount You Receive?

The gross settlement offer and the amount available to you after settlement are different figures.

For a represented worker, New York’s Section 32 attorney fee is generally 15% of the settlement benefits, excluding amounts allocated for future medical expenses. The fee must be approved by the Board and is deducted from the award.

Other applicable deductions, such as child support arrears, may also reduce the payment. A medical allocation can further limit how much of the settlement is available for nonmedical needs.

A prior injury or medical condition can affect negotiations if the parties dispute causation or how much of the current disability is attributable to the work injury. Having a preexisting condition does not automatically disqualify you from benefits.

Before accepting an offer, review the gross amount, proposed deductions, medical allocation, and benefits you would retain.

Gathering Evidence to Evaluate a Settlement Offer

Reliable wage records and medical evidence help establish the benefits at issue.

Useful documentation may include:

• Payroll records showing gross earnings, overtime, and relevant additional employment.
• Medical reports addressing diagnosis, work-related causation, restrictions, and prognosis.
• Permanency evaluations and functional assessments.
• Treatment recommendations and estimates of future care needs.
• Records of benefits already paid and any unpaid periods in dispute.

Detailed medical records can help explain why you remain unable to work or need additional treatment. Gaps in care may require explanation, but they do not automatically prove that you recovered.

Vocational evidence may also help explain how permanent limitations affect your ability to earn wages.

If someone outside your employer contributed to the injury, a separate third-party personal injury claim may be possible. That claim can involve workers’ compensation reimbursement and consent issues that should be addressed before either matter is settled.

What Happens Before a Section 32 Agreement Becomes Final?

The Workers’ Compensation Board must approve a Section 32 agreement before it becomes binding. Depending on the agreement and applicable requirements, review may occur at a hearing or through the Board’s desk-review process.

Each party has 10 calendar days from the date the agreement is deemed submitted to the Board to withdraw by notifying the Board in writing. The Board identifies that submission date; it is not necessarily the date you signed or mailed the paperwork.

Once the withdrawal period has passed and the agreement is approved, its terms become final and binding. You generally cannot seek additional benefits that you waived simply because you later need more money or treatment. Benefits expressly left open remain available under the claim.

An agreement may be modified with the consent of all interested parties and Board approval.

Workers’ compensation does not provide pain-and-suffering damages. A Section 32 offer should therefore be evaluated against the workers’ compensation benefits and issues being resolved.

Meeting Workers’ Compensation Deadlines in New York

Protecting your underlying claim is essential before settlement negotiations begin.

For an accidental workplace injury, you generally must:

• Give your employer written notice within 30 days of the accident.
• File a workers’ compensation claim with the Board within two years of the accident.

Exceptions can apply, but late notice or filing can jeopardize benefits.

Occupational diseases have different timing rules. Generally, a claim must be filed within two years after disablement or within two years after you knew or should have known the disease was work-related, whichever is later. Certain conditions, including occupational hearing loss, have additional rules.

Report a suspected work-related injury or illness promptly rather than waiting until you are ready to discuss settlement.

Frequently Asked Questions About Workers’ Compensation Settlements

How Long Does It Take to Receive a Settlement Check in New York?

The insurer has 10 calendar days from the date the Section 32 agreement becomes final to have the settlement check postmarked. If the deadline falls on a Saturday, Sunday, or legal holiday, it moves to the next business day. A late payment can result in a 20% penalty on the amount paid late.

Do You Have to Pay Taxes on Your Settlement?

Workers’ compensation benefits paid under a workers’ compensation law for an occupational injury or illness are generally excluded from federal taxable income. Social Security offsets and certain related payments can involve different tax treatment.

Can You Return to Work After Settling Your Claim?

You can return to work after a Section 32 settlement. Whether you can receive additional wage benefits depends on what the agreement left open and your continuing eligibility. Returning to work does not restore benefits you waived.

Need Legal Help? Brandon J. Broderick, Attorney at Law, Is Here for You

At Brandon J. Broderick, Attorney at Law, we help injured workers understand their benefits, evaluate settlement offers, and consider how an agreement could affect future income and medical care. Our team can review the proposed terms, identify benefits being waived, and explain the amount you would receive after applicable deductions.

Our dedicated team is available 24/7 to listen to your story and review the circumstances of your case. We offer free, no-obligation consultations to help you understand your options and protect your rights. Contact us today.