Improving Wage Theft Enforcement Denver
Published on November 09, 2022
- 1 in 10 workers have had their wages stolen. This especially impacts low-wage, immigrant, and female workers.
- A national study found that 68% of low-wage workers in large metro areas, like Denver, suffered at least one pay-related violation in their previous week of work.
- Stolen wages hurt our local economy and reduce tax revenues.
- Obtaining redress through the court is often inaccessible— low wage workers may not be able to find or afford representation; justice through the court system takes a long time.
- Organized by Colorado Jobs with Justice, Towards Justice, Kelman Beuscher Firm.
- Members from unions, including Colorado Building & Construction Trades Council, Colorado Laborers, Denver Area Labor Federation, International Union of Painters & Allied Traders, SEIU Local 105, Southwest Carpenters, United Food and Commercial Workers Union Local 7.
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- Tuesday, December 6th, 1:30p – Finance & Governance Committee
- Sign up to speak in support or opposition
- Tuesday, January 3rd, 3:30p – First reading at City Council
- Monday, January 9th, 5:30p – Second reading and 1-hour courtesy public hearing
- Sign up to speak in support or opposition
Read the bill language and see the committee presentation here
- Payment of withheld wages + 12% interest.
- Why? Workers are owed their promised wages for labor performed.
Protects independent contractors
- The bill’s definition of worker includes independent contractors.
- Why? Employers won’t be able to avoid paying owed wages by classifying a worker as an independent contractor, rather than an employee.
Holds employers “up the chain” accountable
- Allows the auditor to seek restitution for the worker from whomever in the chain can pay. The auditor will start with the direct employer and then may move up the chain, link by link.
- Why? This ensures workers recover their owed wages, even if their direct employer is insolvent or has disappeared. It will incentivize companies to contract with rebuttable subcontractors to prevent wage theft from the start. It also protects high-road employers from unfair competition.
Allows flexible penalties
- The auditor may order treble damages (3x stolen wages), job reinstatement, and/or a fine up to $25k.
- There are fines for failing to certify payroll ($1k), providing false information ($1k), and retaliating against an employee ($5k).
- Why? The authority to enact stiff penalties serves to deter violations. Discretion is key for the auditor to encourage cooperation and not unduly punish errors made unintentionally.
Establishes a private right of action
- A worker may choose to bring a civil action in court, rather than via complaint to the auditor. The worker may be entitled to payment of wages, interest, $100 per day, treble damages, reinstatement of employment, and attorney’s fees. This only applies to the direct employer, not up-the-chain.
- Why? This gives workers options. If the auditor is unable or unwilling to investigate a complaint, a worker still has recourse.
What is wage theft?
Wage theft occurs when a worker is paid less than the full wages to which they are legally entitled. It includes overtime violations (failing to pay nonexempt employees less than time and a half for hours worked in excess of 40-hours per week), off-the-clock violations (asking employees to work off the clock before or after their shifts), meal break violations (denying workers the legal meal breaks), illegal deductions, and employee misclassification violations (misclassifying employees as independent contractors to pay a wage lower than the minimum or to avoid paying overtime).
How is this different than criminal wage theft?
This ordinance establishes a civil violation, not a crime. It is a violation between two private parties, not a crime against the city. It allows workers to receive restitution without going to court and no one is at risk of jail time.
Who does this apply to?
Employers (any corporation, proprietorship, partnership, nonprofit, joint venture, association, individual, limited liability company, business trust, or any person or group of persons who employ a worker acting directly or indirectly in the interest of an employer in relation to a worker) operating in the City & County of Denver.
I’m an employer who pays my employees what I owe them and I subcontract with companies that do the same. What do I need to know?
You’ll need to post auditor-approved signage, in English and Spanish. If that’s not possible, you need to provide the information to workers individually, in the worker’s primary language, in a way that is accessible and obvious. You’ll also need to retain payroll records for at least 3 years, comply with any auditor investigation, and refrain from retaliating against employees who ask about their rights or file a claim against you.
I’m a worker who wants to file a complaint. How do I do that?
If this legislation passes, the complaint process will be established by the auditor. You’ll need to give at least your name, a detailed statement of the alleged violation, and provide any documentation that helps prove your complaint. Someone can help you make the complaint. You must bring the complaint within 3 years of the violation.
If I make an honest accounting error and accidentally short my employee, will I be fined?
The penalties are at the discretion of the auditor and intended to penalize bad-faith employers— those who intentionally withhold wages, do not fix issues within 30 days, and/or do not comply with the investigation.
What happens if an employer pays a worker nothing— violating both minimum wage and wage theft?
The auditor must choose to enforce the violation via the minimum wage or civil wage theft ordinance. No double- recovery is allowed.
What if I, as an individual homeowner, hire a contractor (like a painter)? Do I have to post signage?
No. The law is applicable to those who hire independent contractors as a matter of business, in other words, commercial operations.