Written and reviewed by Josh Kohanim, Esq., California Bar No. 328609 · Reviewed
In this guide
The question that decides a construction case is whose payroll the careless person was on. Answer that and you know which system you are in, and whether the second one is open to you.
An injured construction worker in Los Angeles with a workers' compensation claim open, or about to open, needs the exclusive remedy rule, the test for who counts as a third party, how the two claims interact, the lien and the credit, and the rule for an uninsured employer. Litigating the comp claim itself, medical provider networks, and utilization review are separate subjects. Our Los Angeles construction accident lawyer page covers the liability side.
Why your employer is usually off limits
Exclusive remedy means the workers' compensation bargain is the whole of what you get from your employer. Labor Code section 3602(a) puts it as the sole and exclusive remedy of the employee against the employer, subject to that section and to sections 3706 and 4558. Everything else on this page exists because that sentence is narrower than it looks: it shields your employer, and nobody else.
Subdivision (b) opens three narrow exceptions. The first is a willful physical assault by the employer. The second is fraudulent concealment of an existing work injury and its connection to the employment, where recovery is limited to the damages caused by the aggravation. The third is injury from a defective product the employer manufactured and sold or leased to an independent third person, which was then provided back for the employee's use.
The fourth exception is the one that applies on job sites. Section 3706 provides that if an employer fails to secure the payment of compensation, an injured employee or their dependents may bring an action at law, meaning an ordinary lawsuit, against that employer for damages as if the workers' compensation division of the Labor Code did not apply. Section 4558 adds a fifth for a shop: the knowing removal of a point of operation guard on a power press, specifically authorized by an owner or supervisor under conditions known to create a probability of serious injury or death.
Who counts as a third party
A third party is anyone whose negligence contributed to your injury and who is not your employer and not a coworker acting in the course of employment. The test is the payroll, not the hard hat. Two men in the same color vest, standing three feet apart, can be a coworker you cannot sue and a stranger you can.
| Party on the site | Third party? | Why |
|---|---|---|
| Your own employer | No | Labor Code 3602(a), unless 3602(b), 3706, or 4558 applies |
| A coworker on your crew | No | Covered by the same exclusive remedy bargain |
| The general contractor | Yes, if it retained and used control | Jury instruction CACI 1009B |
| Another trade's subcontractor | Yes | Ordinary negligence, no employment relationship |
| Equipment maker, lessor, or utility | Yes | Product liability, negligence, or premises control |
One caution on the row for your own employer. The company that signs your check is not always your only employer. Staffing agencies and labor brokers create special employment arguments in which a second company claims the shield too, and defendants raise it early because it disposes of the case. Whether it works turns on who directed the work, who could fire you, and who supplied the tools.
Running both claims at the same time
Nothing about filing a lawsuit slows the benefits, and nothing about taking benefits waives the lawsuit. The Division of Workers' Compensation states on its how to file a claim page that your employer must give or mail you a claim form within one working day of learning about your injury, and must authorize appropriate medical treatment within one day of your filing that form. The insurer generally has 14 days to write and tell you the status of the claim, and if your employer does not deny the claim within 90 days of your filing, the injury is presumed covered in most cases.
The sequence is simple. Get the claim form in and the treatment authorized. Let the workers' compensation insurer fund the imaging, the surgery, and the disability checks while the lawsuit is investigated and filed. Keep the two files consistent: the recorded statement you give a workers' compensation adjuster gets read out loud in the third-party case, and the job description in your comp file gets compared against the wage loss you claim in the lawsuit.
How the settlement is divided
Labor Code section 3856 sets the order of payment when the injured worker is the one who brought the action, and the order is the whole dispute. Reasonable litigation expenses and a reasonable attorney's fee are paid first, out of the judgment. The employer then takes a first lien against the balance for what it spent on compensation. What is left after both is yours.
| Order | What is paid | Who decides the amount |
|---|---|---|
| 1 | Reasonable litigation expenses of the action | The court |
| 2 | A reasonable attorney's fee | The court |
| 3 | The employer's first lien for compensation paid | The court, on the employer's showing |
| 4 | The balance to the injured worker | What is left |
| After | Credit against future benefits, up to the balance | Labor Code 3858 |
Two things move the employer's lien, the third line in that table. The first is the employer's own conduct: where its negligence contributed to the accident, its recovery is reduced accordingly. The second is allocation. Benefits paid for a body part or a condition the third party did not cause do not belong in the lien, and carriers routinely include them.
The credit is where the real negotiation happens. A worker who settles a third-party case and leaves the credit untouched can find the workers' compensation insurer lawfully refusing to pay for the next surgery until the entire net recovery is exhausted on paper. Resolving the lien and the credit together, before anything is signed, is the difference between a settlement figure and money you can spend.
When your employer had no workers' comp
It happens more often than the industry admits, particularly in residential remodeling and in the lower tiers of subcontracting. Where the employer failed to secure the payment of compensation, section 3706 removes the shield and the case is tried as a negligence action. That changes the arithmetic above: no lien, no credit, no separate comp file.
Licensing is the companion issue. Labor Code section 2750.5 creates a rebuttable presumption, an assumption the other side must disprove, that a worker performing services for which a contractor's license is required is an employee rather than an independent contractor, and it states that any person performing such work must hold a valid license as a condition of independent contractor status. An unlicensed operator who calls you a subcontractor is often, in law, your employer.
When the second claim is not there
- Every careless act was your own employer's, on a site where the hirer, the company that hired your employer, delegated the work and left it alone. That is the ordinary case, and it ends at workers' compensation.
- The only other company involved was a staffing agency that may share the exclusive remedy shield as a special employer.
- The recovery is smaller than the lien and the credit combined. A modest settlement against a minimum-limits defendant can leave nothing after the insurer is repaid, which is a reason to value the case before filing rather than after.
- The two-year statute of limitations ran out while the workers' compensation claim was pending. The workers' compensation file does not pause it, and this is the most common way a good third-party case ends.
- A public entity owned the site and no government claim was presented within six months, under Government Code section 911.2.
Which claim you have
If your injury came from your own crew's mistake on a site where nobody else had a hand in the work, you have workers' compensation. If a general contractor was directing the sequence, another trade left the hazard, a machine failed, or a company there was uninsured, you have a second claim worth many times the first. That question is answered from the site records rather than from a phone call.
Start the comp claim today, keep treating, and get the site records preserved this week. Two common fact patterns are covered on our pages on falls from heights and scaffolding and crane, forklift, and heavy equipment accidents. If the injury is permanent, our catastrophic injury page explains how future care is priced.
Tell us who was on the site and what failed. We will tell you which system you are in. No fee unless we recover.