Disclaimer: This article is for educational purposes only and does not constitute legal advice. Always consult a qualified attorney for guidance on your specific situation.
Understanding Workers’ Compensation Liens in Wisconsin
When you receive workers’ compensation benefits and later pursue a third-party personal injury claim, Wisconsin law lets your employer or its insurer claim a lien on your settlement or judgment. Under Wis. Stat. § 102.29, they must be reimbursed for medical and wage-loss benefits paid. If you settle without allocating portions to medical or wage-loss, Wis. Stat. § 102.31 lets the court apportion the recovery fairly.
When a Lien Attaches
An employer’s lien attaches once you give notice of your third-party claim. The insurer must file a written lien notice within 30 days after your claim becomes known (Wis. Stat. § 102.29(3)). After that, your employer can hold a portion of any settlement or judgment until they recover benefits already paid.
Calculating the Reimbursement
Your employer must be paid for both medical benefits and wage-loss benefits. If your settlement clearly identifies amounts for each category, those funds go directly to the lien holder. If not, you or your attorney can ask the court to divide the settlement under Wis. Stat. § 102.31, based on the relative value of medical expenses versus lost wages.
Impact on Attorney Fees and Costs
Wisconsin case law requires that you allocate attorney fees and litigation costs in proportion to the benefits the insurer must repay. For example, if 30% of your recovery reimburses the employer, then 30% of your attorney fees and costs must come from that portion, not your net share. Your attorney should detail these allocations in the final accounting.
Hypothetical Example
Imagine you settle for $100,000. Your employer paid $20,000 in medical and $10,000 in wage-loss benefits, creating a $30,000 lien. Your attorney’s fee is 33% of the total recovery (\$33,000). Under pro rata allocation, 30% of fees (\$9,900) comes from the lien portion, leaving \$23,100 of fees against your net. After reimbursing the lien (\$30,000) and paying your share of fees (\$23,100), you would recover \$46,900.
Helpful Hints
- Track all workers’ compensation benefits paid to calculate your lien accurately.
- Provide timely notice of your third-party claim to protect your lien rights (§ 102.29).
- Negotiate lien amounts before settlement; some insurers agree to reductions.
- Ensure your settlement agreement allocates values for medical expenses and wage-loss.
- Work with your attorney to allocate fees and costs in line with Wisconsin case law.
- If parties dispute allocation, file a petition under Wis. Stat. § 102.31 for judicial apportionment.