What Is a Section 32 Waiver Agreement and Should You Settle Your Workers' Comp Case This Way?

A Section 32 Waiver Agreement is a formal settlement under New York Workers' Compensation Law § 32. It permanently resolves an injured worker's claim in exchange for a lump-sum payment or annuity. It requires approval from the New York Workers' Compensation Board, and once finalized, it cannot be reopened.

If an insurance carrier has approached you about settling your workers' comp claim, you are facing one of the biggest decisions an injured worker can make. A Section 32 agreement trades the open-ended security of ongoing benefits for a set amount of money now. For some workers it is exactly the right move. For others, it closes the door on medical care they will still need years from now. This guide explains what is a Section 32 waiver agreement, how it differs from regular benefits, and how the process works. Most important, it shows you how to tell whether settling makes sense for your situation.

What Is a Section 32 Waiver Agreement?

A Section 32 waiver agreement is a negotiated settlement between an injured worker and the workers' compensation insurance carrier. It is authorized by New York Workers' Compensation Law § 32. In exchange for closing out the claim, the worker receives a one-time lump-sum payment or a structured annuity. The agreement can settle the indemnity portion (payments for lost wages), the medical portion (future treatment costs), or both.

Two features define a Section 32 settlement in New York. First, it requires approval from the New York State Workers' Compensation Board before it takes effect. The parties cannot simply sign a deal and call it done. Second, once the Board approves it, whatever was settled is permanently closed. Say you settle both indemnity and medical benefits. The carrier's responsibility for that injury ends, and you generally cannot reopen the claim even if your condition later worsens.

Settling is always optional. The Board states plainly that you do not have to settle your claim. A Section 32 agreement only happens if both you and the insurance carrier voluntarily agree to it.

How a Section 32 Settlement Differs from Regular Workers' Comp Benefits

This is the question most injured workers are really asking. Regular workers' compensation and a Section 32 settlement deliver money in very different ways. The difference shapes everything about your long-term security.

Under regular workers' comp, you receive ongoing weekly indemnity checks while you are out of work or working at reduced capacity. The carrier pays your authorized medical bills as they come in. These benefits continue as long as you remain eligible. They run until you recover, return to full work, or the claim is otherwise resolved. A Section 32 agreement replaces that ongoing arrangement with a single payment that closes the case for good.

Here is how the two compare:

A useful nuance: a Section 32 is not always all-or-nothing. The agreement can settle indemnity benefits while leaving your medical benefits open. That lets you take a lump sum for your lost wages but keep workers' comp paying for future treatment related to the injury. This flexibility matters a great deal for workers whose medical needs are ongoing.

Consider a Queens construction worker who has received weekly checks for 18 months after a fall. Under regular benefits, those checks continue. The carrier keeps paying for physical therapy and follow-up surgery as needed. Now say that same worker accepts a Section 32 settlement of both portions. The weekly checks stop, the file closes, and any future treatment for that injury becomes the worker's own responsibility. That holds true even if a new surgery is required two years later.

Who Qualifies for a Section 32 Settlement?

Almost any worker with an open New York workers' compensation claim may be eligible to settle through Section 32. The claim can be accepted or still contested. What matters is that both sides are willing to negotiate. Because the agreement is voluntary, no one can force you to settle. Not the carrier, not the Board.

Section 32 settlements are most commonly considered in a few situations:

• The injury has reached maximum medical improvement (MMI), meaning doctors expect little further recovery with continued treatment.
• The claim is being disputed, and the uncertainty of litigation makes a negotiated resolution attractive to both sides.
• The worker simply wants closure and the freedom to move on from the workers' comp system.

Every category of worker can qualify. Full-time and part-time employees, union and non-union workers, and workers across industries are all eligible. That includes construction, health care, restaurants, and delivery. Undocumented workers can receive workers' compensation benefits in New York and may settle through a Section 32 as well. When the claimant is a minor or a dependent, the Board applies stricter scrutiny to make sure the settlement is genuinely in that person's interest.

The Section 32 Settlement Process, Step by Step

The settlement does not become real the moment you sign. Several steps stand between agreement and payment. Understanding them removes much of the anxiety from the process.

Step 1: Negotiation

You and the insurance carrier negotiate the terms, usually through your attorney. A Section 32 agreement must break down how the money is allocated. That means how much represents indemnity (lost wages), how much represents medical benefits, and how much goes to attorney fees. Attorney fees in workers' compensation matters are governed by New York Workers' Compensation Law § 24. They are capped, typically at around 15% of the benefits, and the judge approves the exact fee on the record.

Step 2: Required Forms

The parties submit the official Board forms. These include Form C-32 (the waiver agreement itself) and Form C-32.1 (the claimant's release). If the settlement covers indemnity only, an additional form applies (Form C-32-I), and the carrier files its own affirmation (Form C-32AF). These forms create the formal record the Board reviews.

Step 3: The Mandatory Claimant Video

Before the agreement is executed, the injured worker must watch the Board's "Settling Your Claim" video. This requirement exists to make sure every worker understands what a settlement means before committing to it.

Step 4: The 10-Day Withdrawal Window Opens

From the date the agreement is submitted to the Board, all parties have 10 calendar days to withdraw in writing. This cooling-off period is one of the most important protections in the entire process. It is covered in more detail below.

Step 5: Board Review

How the Board reviews the agreement depends on the circumstances. Where all parties request desk review, or in indemnity-only settlements, the agreement may be processed without an in-person hearing. Other settlements go before a Workers' Compensation Law Judge at a hearing. There, the judge confirms that you understand the terms and are agreeing freely.

Step 6: Board Approval

The Board approves a Section 32 agreement unless it finds the deal unfair, unconscionable, improper as a matter of law, or based on an intentional misrepresentation. One detail surprises many workers. A disapproval can be appealed, but the approval of a Section 32 agreement cannot. Once approved, it stands.

Step 7: Payment

After the agreement becomes final, the insurer must issue payment within 10 calendar days or face late-payment penalties under WCL § 25(3)(f). Payment usually comes as a single lump sum, though a structured annuity over time is also possible.

How Section 32 Workers Comp Settlement Amounts Are Calculated

There is no fixed formula for a Section 32 workers comp settlement. The carrier's offer reflects its estimate of how much it would otherwise have to pay over the life of your claim. The carrier's goal is to close the file for as little as possible. Understanding the variables helps you judge whether an offer is fair.

The main factors that drive a settlement figure include:

• Projected future medical costs. This is the "medical tail," or what your treatment is likely to cost going forward.
• Projected future lost wages, based on your earning capacity and how long benefits would likely continue.
• Benefits already paid, which reduce the remaining exposure the carrier is settling.
• Dispute risk. A contested claim the carrier might win is worth less to settle than a clearly accepted one.

The Board scrutinizes how the money is allocated. It looks closely at agreements where the medical allocation is less than 10% of the gross settlement. Shortchanging the medical portion can leave a worker without resources for future care.

One federal requirement deserves special attention. Say you are a Medicare beneficiary, or you reasonably expect to qualify for Medicare within 30 months of settling. In that case a Medicare Set-Aside (MSA) may be required. An MSA carves out a portion of the settlement specifically to pay for future injury-related medical care, protecting Medicare's interest. This matters because if the MSA funds run out, you are responsible for those costs. The Board's own guidance notes that if the money runs out, you will have to find another way to pay. MSA rules are complex and federal. Getting them wrong can jeopardize your future Medicare coverage, so this is an area where professional guidance is especially valuable.

Section 32 Waiver Agreement Pros and Cons

This is the heart of the decision. A Section 32 settlement is a tool, and like any tool it fits some situations and not others. The agreement is irreversible once approved, so the analysis matters more here than in almost any other workers' comp decision.

Situations Where a Section 32 May Make Sense

A settlement tends to make sense when your future is reasonably predictable and a lump sum serves you better than a stream of checks. Signs that settling may be a good fit include:

• Your injury has reached MMI and your future medical needs are stable and clearly projected.
• You have alternative health insurance that can cover future treatment related to the injury.
• Your benefits are being disputed and the uncertainty of continued litigation is costly.
• You want to return to work or start a new career without ongoing claim obligations hanging over you.
• Your weekly benefits are minimal, and a lump sum is financially superior over time.
• You need immediate capital to pay down debt, invest, or fund education or retraining.

Situations Where You Should Not Settle

Settling can be a serious mistake when your medical future is uncertain or your long-term needs outrun the offer. Be cautious about settling if:

• You are still receiving active medical treatment. Closing the medical portion now could leave you paying out of pocket.
• Your prognosis is unclear or your condition is likely to worsen.
• The offer does not realistically account for your long-term medical costs. This is the permanence trap. Once the Board approves the agreement, it is irreversible under virtually all circumstances.
• You have no alternative insurance to fall back on if a Medicare Set-Aside or your settlement funds run out.
• Your ongoing disability payments would likely exceed the lump sum over time.

The single most important warning bears repeating. If you settle your medical benefits and the money set aside for future care runs out, you pay the difference yourself. There is no going back to the carrier for more.

Can You Change Your Mind?

Yes, but only briefly. New York builds a short cooling-off period into every Section 32 settlement. That gives workers who feel rushed or uncertain a genuine chance to reconsider.

All parties have 10 calendar days from the date the agreement is submitted to the Board to withdraw. The withdrawal must be in writing and delivered to the Board. Telling someone verbally does not count. For example, say your agreement is submitted on June 1. You have until June 11 to file a written notice of withdrawal. Submit it within that window and the deal is off.

Once those 10 days pass with no withdrawal, the agreement becomes final, conclusive, and binding on all parties. After that, the case is closed for the benefits you settled. You generally cannot reopen it, even if your medical condition deteriorates.

There is one narrow exception. Under WCL § 32(d), a Section 32 agreement may be modified at any time if all interested parties agree and the Board approves the change. In practice this almost never happens. The carrier has little reason to agree to pay more after a case is closed. You should not treat this exception as a safety net.

A separate situation is a brand-new injury. If you are later hurt again on the same job, you may be able to file a separate claim. Benefits will be apportioned between the old and new injuries, and your prior Section 32 settlement does not reopen.

Frequently Asked Questions

Is a Section 32 settlement mandatory?

No. Settling is always voluntary. The Board makes clear that you do not have to settle your claim. Neither the insurance carrier nor the Board can compel you to accept a Section 32 agreement. A settlement only happens when both sides choose to enter into one.

What happens if I still need medical treatment after settling?

It depends on what you settled. If your agreement closed the medical portion, you become responsible for future treatment costs related to the injury — through private insurance, a Medicare Set-Aside, or out of pocket. If the agreement left medical benefits open, workers' comp continues to cover authorized treatment. Workers with ongoing medical needs often settle indemnity only for this reason.

Will a Section 32 settlement affect my Social Security or Medicare?

It can. A lump-sum settlement may reduce Social Security Disability benefits through an offset. It also triggers Medicare's interest in future injury-related care, which is what the Medicare Set-Aside addresses. How the settlement is structured can reduce these effects. The rules are technical and federal, so getting advice before signing is worthwhile.

Can I get a Section 32 settlement if my claim is still being disputed?

Yes. A contested claim can be resolved through a Section 32 agreement just as an accepted one can. Dispute is actually one of the most common reasons both sides agree to settle — it removes the uncertainty of litigation for everyone. The carrier's offer will typically reflect the risk that the claim might not succeed.

Does a judge have to approve the agreement?

Yes. No Section 32 agreement is effective until the Workers' Compensation Board approves it. Depending on the circumstances, approval comes at a hearing before a Workers' Compensation Law Judge, or through a desk review in some cases. The Board will reject a settlement it finds unfair, unconscionable, improper as a matter of law, or based on intentional misrepresentation.

Can undocumented workers get a Section 32 settlement?

Yes. Undocumented workers are entitled to workers' compensation benefits in New York and may settle their claims through a Section 32 agreement on the same basis as any other worker. Immigration status does not bar eligibility for benefits or for settlement.

What forms are required?

The core forms are Form C-32 (the waiver agreement) and Form C-32.1 (the claimant's release). An additional form (C-32-I) applies to indemnity-only settlements, and the insurer files a carrier affirmation (Form C-32AF). The injured worker must also watch the Board's "Settling Your Claim" video before the agreement is executed.

How long does the process take?

There is no single timeline. After the agreement is submitted, the 10-day withdrawal window runs. The Board completes its review, and a hearing is typically scheduled within a few weeks unless desk review applies. Once the agreement is final, the carrier has 10 calendar days to pay. Complex settlements or those requiring a Medicare Set-Aside can take longer.

This article provides general information and is not legal advice. Every workers' compensation case is different. Contact an attorney to discuss your specific situation.

Sources & Official Resources

New York Laws Cited

1. WCL § 32 — Section 32 Waiver Agreements
2. WCL § 24 — Attorney Fees in Workers' Compensation

New York Workers' Compensation Board 3. WCB — Section 32 Waiver Agreements Overview 4. WCB — Section 32 Waiver Agreements Guidance 5. WCB — Section 32 FAQ 6. WCB — Protections for Undocumented Workers

Federal Resources 7. CMS — Workers' Compensation Medicare Set-Aside Arrangements

Contact The Orlow Firm

The decision to settle your workers' compensation claim through a Section 32 agreement is irreversible once the Board approves it, so it is worth getting it right the first time. Say an insurance carrier has offered you a settlement, or you are weighing whether a lump sum or ongoing benefits better protect your health and finances. Talking with an experienced attorney before you sign can make all the difference.

The Orlow Firm has helped injured workers throughout Queens and across New York City for over 40 years. We can review your offer and explain exactly what you would be giving up. We can help you understand the Medicare and Social Security implications and negotiate with the carrier on your behalf.

Call (646) 647-3398 for a free, confidential consultation. We work on contingency. You pay nothing unless we win.

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