California Compromise and Release vs. Stipulated Award

When a California workers' comp claim settles, it settles one of two ways: a Compromise and Release (C&R) or Stipulations with Request for Award (usually called "stips"). The choice decides two big things: whether you get one lump sum or payments over time, and who pays for your medical care after the case is over.

You'll also see pages promising "compromise and release settlement amounts." No agency publishes those, and we won't invent an average. What we can show is the pieces every California settlement is built from, the math behind the one piece that has a fixed formula, and the approval step that every settlement has to clear. For how the weekly check works before any settlement, see our guide to how your workers' comp weekly check is calculated.

C&R vs. Stips at a Glance

Topic	Compromise and Release (C&R)	Stipulations with Request for Award (Stips)
What closes	Usually the whole claim as written in the agreement. The insurer or employer is released from future liability.	The benefits you agree on, such as permanent disability. The award can still be changed for a limited time, and medical care stays open.
Future medical care	If the lump sum covers estimated future medical costs, the claims administrator stops paying your doctor and the cost becomes yours.	The claims administrator usually keeps paying for medical care for the injury.
How you're paid	One lump sum, covering permanent disability not yet paid.	Payments over time.
If your condition worsens	You can't ask for more benefits later.	Either side can usually ask for a change within five years of the injury date.
Approval	A workers' compensation judge must review it for adequacy.	Same.
Official form	DWC-CA 10214(c)	DWC-CA 10214(a)

Terms vary from one agreement to the next, so the signed document controls, not this table.

How a Compromise and Release Works

A C&R is a negotiated deal. You and the claims administrator agree on a dollar amount to resolve the claim. The State of California's description is plain: after a judge approves the lump sum, "the claims administrator will not be liable for any further payments or medical care."

The mechanics come from the Labor Code. Both sides sign, and a copy goes to the Workers' Compensation Appeals Board (WCAB), which can then enter an award based on the agreement (Lab. Code § 5002). The agreement has to state the date of the accident, your average weekly wage, the type of disability, and the amounts paid or still owed (Lab. Code § 5003).

The state's own C&R form releases the employer and insurer "from all claims and causes of action, whether now known or ascertained." Because that release is broad, the Division of Workers' Compensation (DWC) requires every body part and date of injury being settled to be listed up front, and it limits "all injuries" language to body parts that were actually injured and evaluated in the medical reports.

Once approved, a C&R is hard to undo. DWC's notice to injured workers says an approved C&R is final and can rarely be set aside.

How Stipulations with Request for Award Work

With stips, you and the claims administrator agree on the facts and on what is owed, then ask the WCAB to issue an award based on that agreement. The Labor Code allows exactly this: the parties may agree on the facts, file the agreement, and the board may decide the case on it (Lab. Code § 5702). The state's stipulation form has you "stipulate to the issuance of an Award," state a permanent disability percentage and weekly rate, and mark whether there is a need for medical treatment.

Two things set stips apart:

Medical care stays open. DWC says a stip "usually includes a sum of money and future medical treatment," with payments "over time."
The award can be reopened for a limited time. If your condition gets worse, you can request more benefits, and if it improves, the claims administrator can request a reduction. DWC says these requests usually must be made within five years of the injury date. The statute behind that window says no award may be changed "after five years from the date of the injury" (Lab. Code § 5804), and an injured worker may claim "new and further disability" within five years of the injury (Lab. Code § 5410).

That five years runs from the day you were hurt, not from the day the award was issued.

How the Settlement Amount Gets Built

A C&R number is negotiated, not computed. But the negotiation starts from benefits that have a legal basis, and DWC requires the settlement to "fully explain the basis for the settlement amount, including how PD was determined." Three pieces feed in.

1. Temporary disability (TD) paid or owed

TD replaces part of your wages while you can't do your usual job. As a general rule it is two-thirds of the gross wages you lose, within a state minimum and maximum. For a 2026 injury, DWC's rate chart (organized by date of injury) shows:

AWW below $396.92: the TD rate is $264.61 per week.
AWW from $396.93 to $2,646.17: TD is 2/3 × AWW.

Two-thirds of the top of that band is the 2026 maximum of $1,764.11 per week, which matches DIR's announcement that the maximum rises from $1,680.29 on January 1, 2026. Our state-by-state maximum benefits table uses the same figures. For injuries on or after January 1, 2008, TD generally stops at 104 weeks within five years of the injury, and certain listed conditions, including amputations and severe burns, allow up to 240 weeks (Lab. Code § 4656).

Hypothetical example, not a settlement estimate. Say a worker hurt in 2026 earned an AWW of $1,200 and was off work 20 weeks.

$1,200 falls inside the $396.93 to $2,646.17 band, so TD = 2/3 × $1,200 = $800.00 per week.
If 12 weeks were paid: 12 × $800.00 = $9,600.00.
If 8 weeks were owed and unpaid: 8 × $800.00 = $6,400.00.
All 20 weeks: 20 × $800.00 = $16,000.00, well under the 104-week limit.

A worker with a $3,000 AWW would hit the cap instead: 2/3 × $3,000 is $2,000, but the maximum is $1,764.11.

That $16,000 is only the TD line. It says nothing about permanent disability or future medical care.

2. Permanent disability (PD)

PD is payment for a lasting loss after you've recovered as much as you're going to. In California, for injuries on or after January 1, 2013, the rating starts with the doctor's whole-person impairment under the AMA Guides, 5th Edition, which is "multiplied by an adjustment factor of 1.4" (Lab. Code § 4660.1). DWC's rating schedule then adjusts for occupation and for age at the date of injury, and apportionment (how much of the disability the job caused versus other factors) is considered too. The rating, your injury date, your pre-injury wages and whether your employer offers you qualifying work all feed into the PD amount, and "PD benefit amounts are set by law."

We don't print California PD dollar figures here, because the weeks and weekly limits depend on the rating and the injury date and should come from DWC directly. Use DWC's permanent disability rating schedule and rating resources for the rating, and see our PPD settlement guide for how impairment ratings work in general.

How PD shows up differs by settlement type. In stips, the agreed PD is paid over time. In a C&R, you receive one lump sum covering the PD you haven't yet received, and DWC says it "is reduced by the PD benefits that you already received, including any lump sum advances."

3. Future medical exposure

This is the piece that makes C&R numbers hard to compare. Under stips the insurer keeps paying, so no one has to put a price on future treatment. Under a C&R the parties estimate what future care might cost and fold that estimate into the lump sum, because afterward the cost is yours. Different assumptions about surgery, therapy and medication produce very different estimates. There is no official formula, and we won't offer a typical figure.

What comes out of the lump sum

The state's C&R form has lines for the attorney's fee requested, liens to be paid out of the settlement, PD advances already paid, and any TD overpayment. A judge must approve any attorney fee. So the number on the settlement is not always the number you receive.

The WCAB Approval Step

A California settlement isn't valid until it's approved. The Labor Code says "No release of liability or compromise agreement is valid unless it is approved by the appeals board or referee" (Lab. Code § 5001).

Under WCAB rule 8 CCR § 10700, the board "shall inquire into the adequacy" of both C&Rs and stips. It may set a hearing to take evidence, approve or disapprove the agreement, or issue findings and awards. For agreements that pay less than the full compensation due and release the employer from future liability, the rule says approval comes only "where it appears that a reasonable doubt exists as to the rights of the parties or that approval is in the best interest of the parties." Lien claimants on file must be served a copy (8 CCR § 10702).

Signing is not the finish line: until the judge approves it, the settlement isn't final. You are also not required to accept any offer.

Medicare Set-Asides

If you're on Medicare, or expect to be within 30 months, a settlement that covers future medical care can raise a federal question. The Centers for Medicare & Medicaid Services (CMS) describes a workers' compensation Medicare Set-Aside (WCMSA) as "a financial agreement that allocates a portion of a workers' compensation settlement to pay for future medical services." CMS says there are "no statutory or regulatory provisions requiring that a WCMSA proposal be submitted to CMS for review" and calls submission a recommended process. It reviews proposals when the claimant is a Medicare beneficiary and the total settlement is over $25,000, or when the claimant reasonably expects Medicare enrollment within 30 months and the settlement is expected to exceed $250,000. The state's C&R form also has a paragraph headed "Social Security, Medicare and Long-Term Disability Benefits." See CMS's WCMSA page for the details.

Free Help From DWC

DWC's Information & Assistance (I&A) officers answer questions and help injured workers sort out problems with a claim, and DWC says "their services are free." They can call the claims administrator to clear up misunderstandings, but they "cannot actively prepare your case, fill out forms or argue on your behalf." DWC's line is 1-800-736-7401. More at the I&A Unit page.

To see where your own weekly numbers land, use our California workers' comp calculator page or the main workers' comp settlement calculator. Any calculator, ours included, can only approximate California's permanent disability amount. How we source our figures is on our methodology page.

Frequently Asked Questions

Can I get medical care after a California Compromise and Release?

Usually not at the insurer's expense. DWC says that if the lump sum covers the estimated cost of future medical care, the claims administrator stops paying your doctor and the cost becomes yours. The signed agreement controls, so read what it says about medical care.

What if my condition gets worse after I settle with stips?

You can request more benefits, usually within five years of the injury date. The claims administrator can likewise ask for a reduction if you improve. After a C&R you can't ask for more.

How much is a California Compromise and Release worth?

No agency publishes an average, and the amount isn't set by a formula. It's negotiated from three pieces: temporary disability paid or owed, permanent disability from the rating, and an estimate of future medical costs. Fees, liens and advances then come out.

Can a judge reject my settlement?

Yes. The WCAB must inquire into whether the agreement is adequate and may disapprove it or set a hearing. A settlement isn't valid until approved.

Do I need a Medicare Set-Aside?

CMS says no law requires submitting a proposal, but it is a recommended process, and CMS sets review thresholds for Medicare beneficiaries and people expecting to enroll within 30 months. Check CMS's WCMSA page before you sign anything.

Sources

This article is general information, not legal advice. California workers' compensation rules, rates and forms change, and every claim turns on its own facts. Confirm current figures with the Division of Workers' Compensation and talk to a licensed California attorney or a DWC Information & Assistance officer before you sign a settlement.