California Workers' Comp Third-Party Claims Against Someone Other Than Your Employer

A Second Claim Against Whoever Else Caused Your California Work Injury

If someone other than your employer caused your work injury in California, you can sue that person or company while you collect workers' compensation.

Labor Code § 3852 says the comp claim does not affect your right to recover all your damages from any third party.

A negligent driver, the maker of a defective machine, and the owner of an unsafe property are the most common examples.

Comp pays nothing for pain and suffering, and a third-party claim can.

The comp carrier is repaid from the recovery, but only after attorney's fees and costs, and its share can shrink if your employer was also at fault.

Most third-party lawsuits must be filed within two years.

If you were hurt on the job and another company had a hand in it, call (888) 713-6653 with your questions, in English or Spanish.

What Workers' Comp Pays and What a Third-Party Lawsuit Adds

Workers' compensation is a no-fault system. It pays regardless of who caused the injury, and in exchange it pays a limited set of benefits. Temporary disability is two-thirds of your average weekly earnings, and for injuries in 2026 it cannot exceed $1,764.11 a week or fall below $264.61.^[1] A worker who earned $3,000 a week still receives no more than the maximum.

• Comp pays medical treatment, temporary disability, permanent disability based on a rating, and supplemental job displacement benefits
• Comp does not pay pain and suffering, emotional distress, loss of enjoyment of life, or the full value of lost earning capacity
• A third-party claim pays every category of damages a jury can award, including the wages comp does not replace

The exclusive remedy rule in Labor Code § 3602 protects your employer, and § 3601 protects your co-workers in most cases, but neither protects anyone else. The broader picture is on our page about third-party claims alongside workers' comp.

For a worker who cannot go back to the same job, the gap between the comp benefits and the full loss is often the largest number in the case, and only a third-party claim can close it.

Gig Drivers, the ABC Test, and Proposition 22 Insurance

Who counts as an employee decides whether workers' comp applies at all. Since July 1, 2020, California has used the ABC test in Labor Code § 2775 for workers' comp purposes: a worker is an employee unless the hiring company proves the worker is free from its control, does work outside its usual business, and runs an independent business of the same kind. A worker misclassified as a contractor can still claim comp.

App-based rideshare and delivery drivers are the large exception. Proposition 22 classifies them as independent contractors when its conditions are met, and the California Supreme Court upheld it in Castellanos v. State of California (2024).^[2] Instead of comp, the companies must carry occupational accident insurance covering at least $1,000,000 in medical expenses and disability payments of 66 percent of average weekly earnings for up to 104 weeks, but only for injuries while the driver is logged into the app.

Nothing in Proposition 22 limits a driver's claim against the person who caused the crash. Those occupational accident benefits can reduce what the driver collects from uninsured motorist coverage, though, so the order in which claims are made matters. Our page on California rideshare and delivery driver injury law covers the 2026 rules on medical liens in these cases.

For a gig driver, the negligent driver's insurance is usually the only source of pain-and-suffering damages, since neither comp nor the Prop 22 policy pays them.

How Labor Code § 3856 Divides a Third-Party Recovery

When a third-party case recovers, the money is divided in a set order. Under § 3856, reasonable litigation expenses and the injured worker's attorney's fee come off first, and only then does the employer or comp carrier receive "a first lien against the amount of such judgment for damages" for what it paid in benefits.^[3] Section 3860 applies the same expenses-first order to a settlement.

The last line is the one people miss. Under § 3861, the Workers' Compensation Appeals Board gives the employer a credit against future benefits for the worker's net recovery, so comp may stop paying for further treatment or disability until that amount has been used up.

Valuing a third-party case without accounting for the lien and the future credit can make a settlement look larger than what it will put in the worker's hands.

When the Employer's Own Negligence Shrinks the Comp Lien

An employer that helped cause the injury cannot collect its full lien. In Witt v. Jackson (1961), the California Supreme Court barred a negligent employer from reimbursement entirely. Since Associated Construction & Engineering Co. v. WCAB (1978), the rule is comparative: the employer's percentage of fault is deducted from the third party's liability, up to the amount of comp the employer paid, and the employer's lien is denied to the same extent.

Proposition 51 adds a cost to the worker as well. In DaFonte v. Up-Right, Inc. (1992), a jury split the fault 15 percent to the worker, 45 percent to the employer, and 40 percent to the manufacturer of the equipment.^[4] Because the employer was immune, its 45 percent share of the $300,000 in non-economic damages, $135,000, was taken off the manufacturer's bill, and the worker bore that loss.

• Employer fault reduces the lien, which can put more of the recovery in the worker's pocket
• Employer fault also reduces the third party's non-economic share, which can lower the recovery itself
• Other third parties pay their own shares, so every responsible company belongs in the case

How these rules play out on a construction site, where the Privette doctrine also limits claims against the general contractor, is explained on our page about California construction injury claims.

The employer's role is usually the most contested fact in a third-party case, because it moves money in two directions at once.

SB 487 and Third-Party Claims by Local Police Officers and Firefighters

A 2025 law changed the lien rules for one group of workers. SB 487 (Stats. 2025, ch. 763), effective January 1, 2026, applies to peace officers and firefighters employed by a city, county, city and county, or fire protection district.^[5]

The statute does not say whether it reaches injuries that happened before 2026, and no court has decided that question yet.

For a city firefighter hit by a drunk driver on a freeway call, the law can mean the difference between a recovery the city mostly keeps and one the firefighter keeps.

Settling the Third-Party Case Without Losing Control of the Comp Claim

The two cases have to be coordinated, and the Labor Code sets the rules.

• Notice of the lawsuit. Whoever sues the third party, the worker or the employer, must "forthwith" give the other a copy of the complaint under § 3853, and the other may join the case.
• Notice of the settlement. Under § 3860, a settlement "is not valid or binding as to any party thereto without notice to both the employer and the employee."
• Consent. Section 3859(a) provides for written consent of both, but § 3859(b) lets the worker settle with the third party without the employer's consent, subject to the employer's right to recover its share.
• Who sets the fees. The court approves fees and expenses on a settlement of a lawsuit, and otherwise the Appeals Board does.

The comp case often has its own settlement, such as a compromise and release, and the timing of the two affects how the lien and the future-credit rules apply.

Settling one case without planning for the other can leave a worker with a third-party check and a comp file that has stopped paying for treatment.

What a Third-Party Work Injury Claim Is Worth After the Comp Lien

A third-party claim is worth the worker's full damages, reduced by any share of fault assigned to the worker, minus the comp lien, with no cap on pain and suffering in most cases.

• Lost earnings and earning capacity at the worker's real wage, without the comp maximum
• Future medical care, including surgery and therapy comp may later stop paying because of the credit
• Pain, suffering, and loss of enjoyment of life, which comp never pays
• A spouse's loss of consortium, which comp does not recognize

The size of the third party's insurance often sets the practical ceiling. A delivery driver hit by a car with a $30,000 policy has a different case from one hit by a commercial truck with a $1,000,000 policy, even with the same injury.

Identifying every company with a policy that could respond, before the evidence and the witnesses move on, is what decides how much of the loss a third-party claim can recover.

The Two-Year Deadline to Sue a Third Party After a California Work Injury

The third-party lawsuit generally must be filed within two years of the injury under Code of Civil Procedure § 335.1.^[6] The comp claim runs on its own clock: report the injury to your employer within 30 days under Labor Code § 5400, and file the claim within one year under § 5405.

• A public entity as the third party, such as a city bus or a county road, needs a written government claim within six months
• A death on the job gives the family two years from the date of death for a wrongful death claim against a third party
• An uninsured motorist claim under the worker's own policy must be settled, sued on, or taken to arbitration within two years

Where a public agency's vehicle or property was involved, our page on filing a claim against a California public entity explains the shorter first step.

The comp carrier can also sue the third party itself, and a worker who waits may find the carrier has already filed, which is one more reason to look at the third-party claim early.