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HB 426

Workers' compensation; employer's offset in event of recovery.

2026 Regular Session Introduced by Destiny LeVere Bolling

HB 426 permits Virginia employers to deduct workers' compensation payments from employee third-party lawsuit recoveries, reducing worker net proceeds while lowering employer costs.

Approved by Governor-Chapter 923 (effective 7/1/2026)
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Bill Summary · HB 426

Legislative bill overview

HB 426 modifies Virginia's workers' compensation law to allow employers to offset their compensation payments when an injured worker recovers damages from a third party (such as a lawsuit settlement). This changes the current balance of how benefits are split between employer-provided compensation and third-party recovery proceeds.

Why is this important

Workers' compensation and third-party recovery interactions directly affect how much injured workers ultimately receive and how employer costs are distributed. This bill shifts financial responsibility, potentially reducing what injured workers keep from settlements while lowering employer expenses, which affects both workplace injury economics and worker financial security.

Potential points of contention

  • Worker vs. Employer burden: The offset may reduce net recovery for injured workers who already receive reduced workers' comp benefits; employers gain financial relief while workers bear more risk
  • Litigation incentives: Employers might be incentivized to offset aggressively, potentially discouraging workers from pursuing legitimate third-party claims that could exceed workers' comp limits
  • Fairness questions: Workers injured due to third-party negligence may feel penalized twice—once by reduced workers' comp benefits and again by employer offsets against their own lawsuit recovery

Compiled from official sources — confirm details with the bill’s official record.

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