At some point in many workers' comp cases, settlement becomes a topic. In New York, the vehicle for settling a workers' comp case is the Section 32 Waiver Agreement — named for WCL §32. A Section 32 allows you and the insurance carrier to resolve the case in exchange for a negotiated lump-sum payment. Once approved by a Workers' Compensation Law Judge, it is permanent and irrevocable. You cannot reopen the case. This is one of the most consequential decisions in the entire workers' comp process, and it deserves careful, unhurried consideration.
What Is a Section 32 Waiver Agreement?
A Section 32 is a voluntary agreement between you (the claimant) and the insurance carrier to fully and finally resolve your workers' compensation case. In exchange for a lump-sum payment, you waive your right to any future workers' comp benefits for the injuries covered by the agreement — including future weekly benefits, future medical treatment, and future permanency awards.
The agreement must be submitted to the Workers' Compensation Board and approved by a Judge, who reviews it to ensure it is in your best interest. However, the Board's review is not a guarantee that the settlement is fair — the Judge can only approve or reject what is presented to them, not negotiate a better deal on your behalf.
Once approved, a Section 32 cannot be reopened — not if your condition worsens, not if you need additional surgery, not if you later discover you were underpaid. The finality is total. This is why the decision must be made carefully, with full information.
What the Settlement Covers
A Section 32 typically resolves two components of your case:
Indemnity (lost wages)
The indemnity portion covers all past and future disability benefits — the weekly payments you have been receiving or are entitled to receive. This includes any unpaid temporary disability benefits, Schedule Loss of Use awards, and non-schedule permanency benefits.
Medical (treatment costs)
The medical portion of a Section 32 can resolve future medical treatment costs, paying a set amount to cover anticipated future care. Settling the medical portion means the carrier no longer has to pay for any future treatment related to the work injury — including surgery, physical therapy, medications, or specialist visits.
Many claimants choose to settle the indemnity component only and leave the medical portion open — meaning the carrier continues to be responsible for future treatment. This is often a wise choice if you anticipate needing ongoing care. The tradeoff is that keeping medical open keeps the case alive and may require ongoing interactions with the carrier.
Medicare Set-Asides
If you are on Medicare or expect to be within 30 months, and your settlement includes a medical component, a Medicare Set-Aside (MSA) may be required. An MSA is a portion of the settlement funds set aside specifically for future Medicare-covered medical expenses related to the injury. Failing to properly handle an MSA can result in Medicare refusing to pay for related treatment until the set-aside is exhausted.
This is a technical area that requires careful handling. Your attorney should evaluate whether an MSA is required and, if so, ensure it is properly structured.
How Settlement Amounts Are Calculated
Settlement values are negotiated, not set by formula. However, experienced practitioners use several benchmarks to evaluate a fair settlement range:
- SLU value: For scheduled injuries, the likely SLU award (percentage × scheduled weeks × comp rate) provides a floor. See how to estimate this with the SLU Calculator.
- Non-schedule permanency: For spine and other non-scheduled injuries, the Loss of Wage Earning Capacity (LWEC) classification drives value
- Remaining temporary disability: Any unpaid TT or TPD benefits owed since the last payment
- Future medical: Estimated cost of reasonably anticipated future treatment
- Risk factors: The strength of medical evidence on both sides, litigation risk, and the carrier's likelihood of success on any open disputes
Before You Agree to Any Settlement
Here is a checklist of things that should be confirmed before you sign a Section 32 agreement:
- Your AWW is correct. If your Average Weekly Wage is wrong, every benefit calculation flowing from it is wrong — including the settlement value.
- Your permanency has been established. Settling before your condition reaches Maximum Medical Improvement means settling without knowing the full extent of your permanent injury. This is almost always a mistake.
- You understand what future treatment is being waived. If you are settling the medical component, make sure you have a realistic picture of what future treatment you will need and what it will cost.
- You have compared the offer to the full value of your case. A settlement offer that seems large in isolation may be a fraction of what you are actually entitled to receive.
- You have independent legal advice. You have the right to have an attorney review any settlement offer before you sign. Given the irrevocable nature of a Section 32, this is one situation where legal representation is essentially indispensable.
Pressure to Settle: Know Your Rights
Insurance carriers often push for early settlements before permanency is fully established. Earlier settlements tend to be cheaper for carriers because the full extent of your injury — and its dollar value — has not yet been determined. You have no obligation to settle at any particular time. You have the right to allow your case to develop fully before making this decision.
If you are feeling pressured to settle quickly, that pressure is itself a signal to slow down and get independent legal advice. Learn about your options at a workers' comp hearing — you do not have to choose between settlement and doing nothing.
Compare settlement scenarios
The free Settlement Comparison tool lets you model different settlement structures and see how a lump sum compares to continued weekly benefits over time.
Open Settlement Tool →Key Takeaways
- A Section 32 permanently closes your case — it cannot be reopened after Board approval
- You can settle indemnity only and leave medical open, or settle both
- Settlement value should be compared to the full projected value of your case, not just what feels like a large number
- Never settle before Maximum Medical Improvement is reached
- Independent legal advice before signing a Section 32 is essentially essential given the finality involved