When An Employer Will Not Return An Employers Return Form
I am not an attorney, I am a judgment referral expert (Judgment Broker)
. This article is my opinion, based on my experience in California, and laws vary in each state. Nothing in any of my articles can ever be considered legal advice.
In this article, when "EWO" is used, it means Earnings Withholding Order (or levy order or wage garnishment), to levy a debtor's income from conventional employment.
This article is my opinion on dealing with EWO problems that can happen when trying to have a judgment debtor's wages levied. What happens when you have an EWO served on a debtor's employer, and wait the time period specified on the form (in California, CCP 706.125(i) and form WG-005 specify fifteen days) and the employer does not comply?
After an EWO is served on an employer, it creates an execution lien on the employer, for the wages they should have deducted and sent to the sheriff.
If the employer does not respond or comply, you can sue the employer directly, for the funds that should have been levied during the time you waited before suing them.
When the employer does not respond to an EWO served on them, you have two options. You could contact the employer or sheriff to ask them to do what they should, or you can choose to relax, and let your execution lien keep growing against the employer, and then sue the employer later.
Most often, it is best to attempt to contacting the employer first, and then the sheriff. Sometimes the reason an employer does not respond, is because there is no such person as your debtor employed there. If the debtor is not an employee there, it is best to verify that fact for sure, before you think about suing an employer.
Sometimes the judgment debtor or their employer will say the judgment debtor works as a consultant, or as a contractor, and is not on the payroll. If that is really the case, an assignment order, or other strategies must be used.
Sometimes the civil department at the Sheriff is behind on processing paperwork. If they employer claims the sheriff did not contact them, ask the sheriff when they will have time to serve the EWO on the employer.
Sometimes another creditor or the government already has a levy in progress on a debtor's wages. For common creditors or assignees of record, only one 25% garnishment at a time is legal. If your levy is the second to arrive, it does not attach. You will have to try your EWO again, after the previous judgment or lien is paid off.
Occasionally, in small businesses, if the employers say the debtor is not an employee they are lying or misinformed, and cover up for the employee judgment debtor. If the employer lies, it is a civil crime, so the police cannot help. That is too bad, my opinion is that it should be both a civil and a criminal crime to lie, in response to a court-ordered wage garnishment.
If you think the employer is lying, you should stop everything and check the facts that caused you to believe the debtor was working there. If you know the kind of car the judgment judgment debtor drives, is it at the parking area of the employer during business hours? If you call and ask for the debtor, do they answer the phone? Can you examine the judgment debtor, and ask for a copy of their bank statements and any paycheck stubs? Can you hire a private investigator to determine where the debtor is employed?
If you know that the conditions above do not apply, and the judgment debtor is working at the employer as a wage-earning employee, the next step is to contact the employer again (if you have not already done so) and ask them when they will comply with the EWO. If this does not work, ask the sheriff - sometimes they do contact the employer, and sometimes they do not.
If contacting people does not work, your next step would be to sue the employer. Usually, it is a good idea not to hurry, because the longer you wait, the more the lien will accumulate. If you are in a hurry, you may be able to sue the employer for a few hundred dollars. If you wait, you may be able to sue for more - perhaps enough to fully satisfy the judgment.
There are 2 situations where one would not want to wait, before suing the employer for failing to comply with the EWO.
1) The employee has lost, or soon will lose their job.
2) The employer is not doing well, and may go out of business or file for bankruptcy protection. If those 2 situations do not seem likely, you are often better off being patient. Record the dates that each paycheck was paid, so you can determine how much to ask for in your lawsuit - never more than the amount needed to satisfy the judgment. Whatever you are paid by the employer via wage deductions or a lawsuit, must be credited toward satisfying the judgment.
Usually, if you must sue an employer, it is best to use small claims court. Many small claims courts have lower limits for business lawsuits, and suing because of a failure to comply with an EWO requires a business lawsuit.
When the amount owed by the employer is more than the small claim limits, you can sue in regular court. Whether you may add attorney fees to the amount owed is something to discuss with your attorney. If the employer is doing well, and the amount owed is large enough, you may be able to find a contingency attorney.
You can also use other judgment recovery tactics while a levy is ongoing, or waiting for an employer to pay, however you must take care not to over-collect. You can only recover from the debtor or a third party holding the debtor's assets, what is required to satisfy the current total owed on the judgment.
by: Mark Shapiro
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