Detailed Answer

Disclaimer: This article is for informational purposes only and does not constitute legal advice.

What Is a Workers’ Compensation Lien?

In Nevada, when an employee receives workers’ compensation benefits for an on-the-job injury, the employer (or its insurer) gains a right of subrogation. Under NRS 616C.150, the employer can place a lien on any subsequent third-party recovery, such as a personal injury lawsuit, to recoup benefits paid.

How the Lien Reduces Your Net Recovery

When you settle or win a personal injury claim against a negligent party—say a driver who hit you outside work—the employer’s lien attaches to your award. Nevada law requires your employer to share in the cost of obtaining that recovery:

• First, you deduct reasonable attorney fees and litigation expenses from your gross settlement.
• Then the employer’s lien attaches to the remaining amount.

This division follows NRS 616C.140. The statute caps the employer’s reimbursement to the net recovery after deducting costs and attorneys’ fees, and apportions that reimbursement pro rata based on the ratio of total litigation expenses to the entire recovery.

Example Scenario

Imagine you settle a personal injury claim for $100,000. Your attorney charges 33% fees and $5,000 in expenses, for a total cost of $38,000. That leaves $62,000 net. Your employer paid $20,000 in workers’ comp benefits. Under NRS 616C.140, the employer may recover up to $20,000, but that amount must be reduced to account for your attorney’s fees and costs:

1. Gross recovery: $100,000
2. Attorney fees and costs: $38,000 (38%)
3. Net available: $62,000
4. Lien amount before reduction: $20,000
5. Reduction factor: 38% of $20,000 = $7,600
6. Employer’s final lien: $20,000 – $7,600 = $12,400
7. Your final recovery: $62,000 – $12,400 = $49,600

Practical Tips

• Notify your workers’ compensation insurer before settling any third-party claim to avoid delays.
• Keep detailed records of all medical bills and benefit payments.
• Ask your attorney to calculate the lien reduction under NRS 616C.140 before finalizing any agreement.
• Consider negotiating the lien if you have legitimate disputes over the amount of benefits paid.

Conclusion

A workers’ compensation lien will reduce your personal injury recovery by the amount the employer can recoup, but Nevada law ensures your attorney’s fees and costs share that burden. Understanding Chapter 616C of the Nevada Revised Statutes helps you and your attorney protect the largest possible net recovery.

Helpful Hints

• Review your employer’s benefit records promptly.
• Work with an attorney familiar with Nevada’s subrogation rules.
• Clarify all liens and encumbrances in a written settlement sheet.
• Verify any lien reductions under Nevada law before signing a release.
• Ask your insurer for a lien waiver if you negotiate directly with them.