Most injured workers in New York assume workers’ compensation is their only option after a workplace accident. For many workers it is the primary source of immediate benefits — but it is rarely the only source of compensation available, and it almost never provides full recovery. Understanding the difference between workers’ compensation and a personal injury lawsuit, and how the two interact, is one of the most important things an injured worker in New York can know.
What Workers’ Compensation Covers
New York’s workers’ compensation system is a no-fault insurance program. If you are injured on the job, workers’ comp covers your medical bills and a portion of your lost wages regardless of who caused the accident. You do not need to prove your employer was negligent. You do not need to prove anyone did anything wrong.
The tradeoff is that workers’ comp benefits are capped. Lost wage replacement is limited to two-thirds of your average weekly wage, up to a maximum of $1,222.42 per week for injuries occurring between July 1, 2025 and June 30, 2026. Workers’ comp pays nothing for pain and suffering. It does not compensate you for the full value of your future lost earnings if you are permanently disabled. And critically — it does not allow you to sue your employer directly.
What a Personal Injury Lawsuit Covers
A personal injury lawsuit against a negligent third party can recover everything workers’ comp does not. Full lost wages rather than the capped two-thirds. Pain and suffering. Loss of enjoyment of life. Future medical expenses. Permanent disability damages. The difference between a workers’ comp payout and a successful third-party personal injury settlement can be hundreds of thousands of dollars — or more.
The key requirement is that a third party — someone other than your employer — must have contributed to your injury. In construction accidents this is extremely common. Property owners, general contractors, subcontractors, and equipment manufacturers are all potential third-party defendants, and most construction sites involve multiple parties.
Labor Law §240 and the Construction Worker Advantage
Injured construction workers in New York have a significant additional advantage. Labor Law §240 — the Scaffold Law — imposes absolute liability on property owners and general contractors for gravity-related injuries. This means a construction worker who falls from a scaffold or is struck by a falling object can pursue a third-party lawsuit without needing to prove anyone was negligent. Absolute liability dramatically increases both the likelihood of recovery and the settlement value of construction accident cases.
Can You Pursue Both at the Same Time
Yes. Workers’ compensation and a third-party personal injury lawsuit are completely separate legal claims and you can pursue both simultaneously. Workers’ comp provides immediate benefits — medical coverage and partial wage replacement — while your personal injury case is litigated. There is no rule that requires you to choose one or the other.
There is one important interaction to understand. If you receive workers’ comp benefits and later recover money in a personal injury lawsuit, your employer’s workers’ comp insurer has a lien on a portion of your personal injury recovery — meaning they can seek reimbursement for some of what they paid out. An experienced attorney can negotiate this lien as part of the overall settlement, but it is a factor to account for.
When You Can Only Use Workers’ Comp
Workers’ compensation is generally your exclusive remedy against your direct employer. New York law prohibits employees from suing their employers in tort for workplace injuries — the workers’ comp system is the exclusive mechanism for claims against the employer. The third-party lawsuit pathway exists only against parties other than your direct employer.
If there is no third party involved — for example, a worker who slips on a wet floor at a private employer’s facility with no other parties involved — workers’ comp may be the only available claim. But in construction, manufacturing, and many other industries, third parties are almost always involved.
What To Do After a Workplace Injury
Report the accident to your employer in writing immediately. New York’s Workers’ Compensation Board requires written notice to your employer within 30 days of the accident. Failure to provide timely notice can jeopardize your workers’ comp claim. Seek medical treatment promptly and make sure your treating physician documents the connection between your injury and the workplace accident. Photograph the scene and collect witness information before anything changes.
Consult a personal injury attorney as soon as possible — not just a workers’ comp attorney. A personal injury attorney can evaluate whether third-party claims exist and ensure you are pursuing all available compensation simultaneously rather than leaving money on the table.