Can I Collect Workers' Comp and Severance at the Same Time in Los Angeles?

Yes. In most situations, you can collect both. Workers' comp and severance are two completely different things that come from two completely different legal systems, and receiving one does not disqualify you from the other.

But there's a catch. The release language in your severance agreement could complicate your workers' comp claim if you're not careful. That's the part most people miss.

Why They're Separate

Workers' compensation is a state-mandated insurance system. It covers medical treatment and lost wages for injuries or illnesses that happened because of your job. It's administered by the Division of Workers' Compensation (DWC) and adjudicated by the Workers' Compensation Appeals Board (WCAB). Your employer doesn't get to decide whether you receive it. The system does.

Severance is a private contract. It's additional compensation your employer offers in exchange for you signing a release of claims. It's negotiable. It's voluntary. And it operates entirely outside the workers' comp system.

Receiving a severance payment does not reduce your workers' comp benefits. Receiving workers' comp does not reduce your severance. They're parallel tracks.

The Release Language Problem

Here's where it gets dangerous. Most severance agreements include a broad general release of claims. The employer wants you to give up the right to sue them for anything related to your employment. And some employers try to include workers' comp claims in that release.

California Labor Code Section 2804 prohibits employers from requiring employees to waive their workers' compensation rights as a condition of employment. While the enforceability of a workers' comp waiver in a severance agreement is more nuanced (because you're no longer employed), signing a release that includes workers' comp claims can create serious problems for your pending or future claim.

If your severance agreement's release says something like "all claims arising out of your employment, including but not limited to claims for workers' compensation benefits," you need to either remove that language or explicitly carve out your workers' comp claim before signing.

Common Scenarios in Los Angeles

You're on workers' comp leave and get terminated. This happens regularly. You got injured, went out on leave, and weeks or months later your employer "eliminates your position" or says they can't hold your job any longer. Your workers' comp claim survives the termination. Your medical treatment continues. Your temporary disability benefits continue. And the severance is a separate offer on top of all that.

You have an open workers' comp claim and get laid off. Same situation, slightly different timing. Your claim was already filed, and the layoff happens for reasons the employer says are unrelated to the injury. Your claim stays open. If the employer offers severance, it should not affect your comp benefits.

You were injured but haven't filed a claim yet. This is the trickiest situation. If you sign a severance with a broad release and you haven't filed your workers' comp claim, you may inadvertently waive your right to file. The release language could be interpreted to include the comp claim. If you have any work-related injury or illness, file your workers' comp claim before signing the severance, or at minimum ensure the release explicitly excludes workers' comp.

What Your Severance Should Say

At a minimum, the severance agreement should include a carve-out that explicitly excludes workers' compensation claims from the general release. Something like: "Nothing in this Agreement shall be construed as a waiver of any workers' compensation claim or right to workers' compensation benefits."

Better yet, the agreement should affirmatively state that your workers' comp claim will continue to be handled through the normal workers' comp process, that the employer will continue to provide treatment authorization for your approved claim, and that the severance does not affect your right to future benefits including permanent disability.

Filing a Workers' Comp Claim After Signing Severance

If you already signed a severance and now realize you have a work-related injury you didn't claim, you may still be able to file. The statute of limitations for workers' comp claims in California is generally one year from the date of injury (or from the date you knew or should have known the injury was work-related). A severance release may not extinguish the claim if the waiver was not knowing and voluntary as to workers' comp specifically.

This is a complex area where having an attorney matters. Both a workers' comp attorney and a severance agreement attorney may need to coordinate to protect your rights.

What to Do

If you have an active workers' comp claim and your Los Angeles employer is offering severance, do not sign the severance until you've confirmed that the release excludes your workers' comp rights. If you're injured but haven't filed, file your workers' comp claim before signing anything.

If you've already signed a severance and are worried about your workers' comp claim, talk to an attorney. The interaction between severance releases and workers' comp rights is fact-specific, and what the release actually says matters. Free consultations for Los Angeles employees.