After a player is waived/injured, the player and the team have five days to agree to an injury settlement. An injury settlement is designed for a team to pay the player for the time he is expected to miss with the injury.

If a settlement is reached, the player becomes a free agent and can sign with another team immediately. If a settlement is not reached, the player goes on the team's injured reserve. A player on IR can't be waived until he passes a physical. In the case of a short-term injury, it's typically in the best interest of both the team and the player to come to an injury settlement.

With a settlement, the team can pay a lump sum to cover the weeks the player will miss due to injury and then cut the player. If the player remains on injured reserve all season, the team is responsible for paying his salary each week.