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  1. #1
    Join Date
    Mar 2017
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    1

    Default What Happens After the Department of Labor Levies a Former Employer's Bank Account

    My question involves labor and employment law for the state of: NY

    Perhaps this should be posted under procedure but I'll start with it here. I formerly worked for a company (in 2007-10) that listed me as a 1099 despite clearly being a W-2 employee and did not pay overtime on my hourly wages. About 3 months after finally leaving for a new job, I took the case to the NYC Department of Labor. My former boss (the CEO and part owner of the small company) did her best to stymie the investigators so it wasn't until 2015 that they came to a judgement that awarded me thousands of dollars in back overtime pay. Again, after the judgement, she ignored all of their inquiries and demands. I also believe that by this point she had shut down the old company and started a new, nearly identical company.

    Using some of the information I had provided, the DoL looked for accounts to freeze and in early 2016 finally found and froze a connected savings account with Capital One. They explained to me that normally when an account is frozen, the judgement debtor pays up for obvious reasons. Though in this case, since the bank only froze the savings account, there was less incentive to pay. In December of 2016 the DoL decided to use the NYC sheriff to levy the account because it was clear that the debtor was not going to cooperate. On 1/30/2017 the sheriff finally served the bank with the levy. I've been checking in every few weeks hoping to find out if there has been any progress; however, neither the bank or the sheriff has been responsive to the DoL investigator assigned to the case. And today I found out, for the first time, that the account freeze is only in effect until the end of this month (March 2017).

    Since it has been extremely hard to get any answers (the DoL, although responsive to me, doesn't really seem to know anything), I'm posting here to see if anyone can answer the following questions:

    -How long does the bank have to respond to the DoL/sheriff's levy? I know for IRS levies there is a holding period of 21 days. I've also seen 30-45 days mentioned for subpoenas.
    -Does the bank have to wait until the account in unfrozen to give out the funds? I would guess no but the one person in the sheriff's office that I spoke with mentioned this.
    -Who is the bank sending the judgement amount too: the DoL or Sheriff?
    -If the worst case scenario happens and the account is not levied in time and the debtor empties the account, I assume that the judgement still stands (for 20 years I believe). This would just mean that the DoL would have to restart a chunk of the investigation and find a new account to freeze. Is this correct?
    -Any other relevant information that might be helpful and anything I can do besides putting pressure on the DoL and sheriff (who is very difficult to reach).

    Many thanks,
    J

  2. #2
    Join Date
    Sep 2005
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    98,846

    Default Re: What Happens After the Department of Labor Levies a Former Employer's Bank Accoun

    For a judgment levy against a financial account, if the judgment debtor takes no action then the bank will forward funds thirty days after being served with the levy. See NY CPLR Sec. 5232.

    If the account is frozen for reasons other than the levy, then there may be other competing attachments against the money.

    If the judgment is not satisfied as a result of the levy then, yes, further collection efforts remain possible.

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