Who bears the responsibility to ensure the employer's subrogation lien does not exceed the net recovery amount?

• A. The employer
• B. The employee
• C. The third-party claimant
• D. The court

Answer: (A)

The employer bears this responsibility. When an employer pays workers’ compensation benefits and later pursues reimbursement from the third party, the subrogation lien is limited to the employee’s net recovery from that third party (amount recovered after paying fees and costs). The employer (often through its subrogation administrator or counsel) must verify the net recovery and adjust the lien so it does not exceed that amount. If the third-party recovery would leave less than the lien, the lien must be reduced to match the net recovery.

The employee isn’t in charge of policing the lien amount, and the third-party claimant isn’t responsible for calculating or enforcing the limit beyond honoring the lien. The court only steps in to resolve disputes if there’s a challenge to the lien.