Updated on February 3, 2026
No, you do not have to quit your job just because you’re settling a workers’ compensation case. In California, many injured workers can accept a settlement and continue working, depending on how the case is resolved and what both sides agree to.
Still, after a work injury, it’s normal to feel overwhelmed. You may be asking yourself how a settlement will affect your income, your medical care, and your ability to support your family. Fear and uncertainty often push workers to assume resignation is required, even when it isn’t.
The truth is that whether you quit, stay, or return to work depends on a few key factors, including the type of settlement, your medical status, and your employer’s expectations. In this article, we break down three important things every injured worker should understand before making that decision.
Summary:
1. Taking a settlement doesn’t mean they want you out
2. What happens if I don’t want to resign?
3. If I go back to work, can I get in trouble with the Insurance company?
Who This Applies To
This article is especially helpful if you:
- Are currently working or have been offered a workers’ comp settlement and were told you might need to resign
- Are worried that accepting a settlement means losing your job automatically
- Want to keep working but are unsure how a settlement affects future medical care or benefits
- Feel pressured to quit without fully understanding your legal options
- Are trying to decide between different settlement types in a California workers’ compensation case
If you’re facing any of these situations, understanding your options before signing anything can make a significant financial difference.
1. Taking a settlement doesn’t mean they want you out
First and foremost, do not take it personally. Although some workers might think they're being asked to resign when an insurance company offers them a settlement, this is usually not the case. Normally, employers just want their employees to be able to stay at work.
From an insurance company's perspective, a C&R (Compromise & Release) Settlement is easier to offer when the employee has resigned. That is, the settlements usually involve a lump sum payment for disability and medical care coverage. And this can be harder to obtain if you are still employed by the company and get hurt again.
For example, if you had a settlement of $100,000 after an accident on the job, at least half the sum was likely earmarked for future medical treatment. However, if you return to work and hurt yourself in the same way, there may be some disagreement with your insurance company. Why? because they will have to pay your medical bills again.
If the insurance company is asking for your resignation, it is because they want to avoid paying out on a claim if you were to sustain the same injury again. However, if both you and your employer are confident that the injury is not likely to recur, it may be possible to skip resignation.
2. What happens if I don’t want to resign?
When an incident occurs in the workplace, it is not uncommon for an insurance company to ask employees to resign in order to secure a Compromise and Release Settlement. However, this does not mean that you must accept such an arrangement. When insurance companies buy out your medical care in the event of a claim, they may worry that reinjury will cause them to lose money.
It means they are still liable for the debt and will have to run again through the process. As a result, the insurance focuses on the resignation while wanting to ensure that financial risk is not a key factor.
Some people plan to leave their jobs regardless, while others are in a position they’ve loved and cherished, and even worked hard at them for decades. They do not want to give up their job, especially if the amount of money they're receiving is less than adequate.
In most cases, an employer cannot force you to resign. And you may want to return to work once your medical care is complete and your restrictions are lifted. You may, however, want to return to work once your medical care is complete and your restrictions are lifted. But if you do, your employer must provide future medical care as well as Permanent Disability benefits.
3. If I go back to work, can I get in trouble with the Insurance company?
No. There are no legal repercussions for submitting a resignation and returning to work the next day. In many cases, employers wish that employees who resign do not leave and will encourage them to remain with the organization. The insurance company cannot force you to stay out of the job.
If an employer wants to rehire a worker, they can do so. In some cases, this is beneficial to both parties: the employer does not have to train another employee, and the insurance company helps the worker get their settlement and get back on their feet.
Common Mistakes That Cost You Money
Many injured workers lose benefits not because of their injury, but because of rushed decisions made under pressure. Some of the most common mistakes include:
- Assuming resignation is required to settle a case
- Accepting a settlement without understanding whether it includes future medical care
- Quitting a job before confirming how it impacts Permanent Disability benefits
- Relying on verbal explanations from an insurance adjuster instead of written terms
- Returning to work without clarity on work restrictions or medical status
These mistakes often happen when workers are trying to “do the right thing” without full information. Unfortunately, they can permanently affect your income and medical coverage.
When Should You Call a Workers’ Comp Lawyer?
You should consider speaking with a workers’ compensation lawyer if:
- You’re being asked to resign as part of a settlement
- You don’t understand whether your settlement closes future medical care
- You’re unsure if returning to work could affect your benefits
- Your employer or the insurance company is pressuring you to make a quick decision
- You want to confirm that the settlement truly protects your long-term interests
A short legal consultation can help you understand whether quitting is truly necessary or whether you have safer options that keep your job and your benefits intact.
Frequently Asked Questions
Do I have to quit my job to settle my workers’ comp case?
No. In California, you usually do not have to quit your job to settle a workers’ compensation case. Whether resignation is required depends on the type of settlement and the agreement between the parties, not on a legal rule.
What’s the difference between a Compromise & Release and a Stipulated Award?
A Compromise & Release (C&R) typically closes your case in exchange for a lump sum and often includes a buyout of future medical care. A Stipulated Award allows you to receive ongoing benefits and usually keeps future medical care open. In many cases, workers who want to keep their job lean toward a Stipulated Award, but every situation is different.
Does a Compromise & Release mean I have to resign?
Not automatically. Some insurance companies prefer resignation with a C&R to reduce future risk, but they cannot force you to quit. Whether resignation is included depends on negotiation and your specific circumstances.
Can I keep working after settling my workers’ comp case?
Yes, many injured workers return to work after settling, especially if their doctor clears them and the employer can accommodate any work restrictions. The key is understanding how the settlement affects future medical care and benefits.
When should I talk to a workers’ comp lawyer about quitting or settling?
You should speak with a lawyer before signing anything if you’re being asked to resign, don’t understand the settlement terms, or feel pressured to decide quickly. Once a settlement is approved, changes are usually not possible.
Still Unsure About Quitting or Settling?
If you’re being asked to resign, feeling pressured to accept a settlement, or unsure how your decision could affect your job or future medical care, getting clarity now can prevent costly mistakes later.
At Pacific Workers, we help injured workers understand their options before they sign anything—so they don’t quit out of fear or give up benefits they’re entitled to.
You can visit www.pacificworkers.com or call 800-606-6999 to schedule a free consultation and get answers specific to your situation.
About the Author
Bilal Kassem President and Co-founder
Bilal Kassem is the co-founder of Pacific Workers and a nominee for Applicant Attorney of the Year. With a deep-rooted passion for helping injured workers, Bilal leads with empathy and empowers his team to deliver world-class service from the very first interaction.
Bilal Kassem has extensive experience advising injured workers on workers’ compensation settlements, including when resignation is and is not required. He regularly helps clients navigate Compromise & Release and Stipulated Award decisions, ensuring they understand how settlements impact their job, future medical care, and long-term financial security before signing anything.