California Senate Bill 487 was signed into law, limiting how much employers can recover from third-party settlements involving injured peace officers and firefighters.

While current law allows full reimbursement of workers’ comp benefits from such settlements, SB 487 caps recovery at one-third of the third party’s insurance policy, but only if the worker proves their damages exceed the net recovery and the insurance isn’t enough to cover both parties’ losses.

The law also prohibits using settlements as credits against future workers’ comp benefits, offering stronger financial protection for injured public safety workers.

This law will go into effect January 1, 2026.