Can the WCB Seize My Bank Account?

When Can the WCB Seize Bank Accounts?

The WCB cannot directly levy bank accounts at the administrative penalty stage. However, once the Board converts an unpaid penalty to a court judgment under WCL §26-a, it has all the collection tools available to judgment creditors under New York's CPLR.

After docketing the judgment, the WCB (through the Attorney General's office or its own legal team) can serve a restraining notice directly on your bank. The bank must immediately freeze all funds in your account up to the judgment amount. The WCB can then serve an execution to actually transfer those frozen funds to satisfy the judgment.

The Process: How a WCB Bank Levy Works

1. WCB penalty is assessed and goes unpaid
2. WCB files judgment with county clerk under WCL §26-a
3. WCB obtains enforcement authorization from the court (usually routine)
4. WCB serves restraining notice on your bank
5. Bank freezes all accounts up to judgment amount
6. WCB serves information subpoena to determine all accounts and assets
7. WCB serves execution to levy and transfer funds
8. Bank transfers funds to satisfy judgment

This Can Happen Without Warning

Many business owners first learn that a bank levy has been served when a check bounces, a payment is declined, or their bank calls them. The WCB is not required to give you advance notice before serving a restraining notice on your bank. The restraint takes effect immediately upon service.

This sudden freezing of bank accounts can be catastrophic for a business — unable to pay employees, vendors, or suppliers while accounts are frozen.

Can Levies Be Stopped or Reversed?

Yes. If a levy has been served, you can:

• Negotiate an emergency settlement with the WCB that includes release of the levy
• File a motion in court to vacate the underlying judgment if there were defects in its creation
• Show that levied funds are exempt from execution (certain types of funds are exempt under CPLR)
• Pay the judgment in full to release the levy

Emergency levy situations require immediate action — call 833-697-4357 right now if this is happening to your business.

Prevention Is Far Better Than Cure

The best way to prevent a bank levy is to resolve the WCB penalty before it ever becomes a judgment. This means responding within the 30-day window, engaging in negotiation, and reaching a settlement. See our complete guide to the WCB penalty process.

Related Questions