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Workers’ Compensation Settlement Agreements
What We Do
Workers’ compensation laws require employers or insurance carriers to pay for injuries arising at work. The Labor Commission is here to make sure that workers’ compensation laws are followed.
Utah law allows settlements of workers compensation claims. But, the law requires that the Labor Commission approve these agreements. So, even though the injured worker and insurance carrier have come to an agreement, the Labor Commission must still approve it.
There are two kinds of settlement agreements: 1) Compromise settlements: used when the parties disagree whether a workers’ compensation benefit is owed to the injured worker; and 2) Commutation settlements: used when the parties agree that a workers’ compensation benefit is owed.
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Compromise Agreements
A "disputed validity" or compromise settlement must involve a real dispute between the parties over whether a claim is legally payable. Settlement of these disputed claims allows the parties to assess the strengths and weaknesses of their respective positions and then strike a compromise in order to avoid the risk, expense and delay of further adjudication.
Commutation Agreements
A "commutation agreement" involves very different considerations. Here, the injured worker's right to benefits has been established and is no longer in doubt. The only question before the judges is whether the parties should be allowed to substitute their own method of paying those benefits for the payment provisions otherwise required by the Utah Workers' Compensation Act.
Information
The information the Labor Commission needs is different for each kind of settlement.
Compromise Agreements: The Labor Commission makes sure the claim has been denied for a reason the law allows. The Labor Commission will look at each side to see if a real dispute exists and if the compromise is fair.
Commutation Agreements: A commutation is an estimate of all the future compensation and medical expenses that will come due on a non-disputed claim. Money is paid to “buy out” the claim. To decide whether the estimate is fair, the Labor Commission looks at the following information:
- Why a commutation is needed (only allowed under “special circumstances”)
- Medical opinion estimating future treatment and costs
- Nature and severity of injury
- The injured worker’s age
- Permanent work restrictions because of injury
- How long the injured worker has been medically stable
- Injured worker’s ability to return to old job or perform new work
- Whether the employer is providing permanent modified duty
- Length of time injured worker has been working since injury
What's Next?
All settlements on cases not currently in the hearing process must be submitted to the Division’s Southern Utah office for review or via e-mail at casefiling@utah.gov. Follow the links below for more information about how settlement agreements are evaluated by the judges.
Settlement Agreement Forms
If you wish to settle, please fill out the form completely. Send it back via fax, regular mail or e-mail at casefiling@utah.gov.