New Year, New Minimum Wage — and New Active Enforcement
Published on December 21, 2021
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DENVER – Starting in the new year, Denver’s citywide minimum wage will increase to $15.87 per hour and the Denver Labor team will take new steps to support businesses and workers using data analysis and active enforcement, according to Denver Auditor Timothy M. O’Brien, CPA.
“Denver’s higher minimum wage will help workers supporting their families as well as businesses competing for staff in a tight labor market,” Auditor O’Brien said. “In 2022, thousands of workers will get a raise — and that couldn’t be better news as our community continues to struggle with the challenges of the pandemic.”
The citywide minimum wage first took effect in 2020 and increases every year on Jan. 1. Since the start of the ordinance, our team of analysts has collected data about the highest-risk industries and locations based on the complaints we received. Starting in 2022, city ordinance allows us to use that data to conduct wage investigations without the need for a prior complaint.
The citywide minimum wage applies to all work performed within the boundaries of the City and County of Denver, with few exceptions. Some of our most frequent cases of unpaid wages come from the city’s borders because employers might mistakenly believe they should pay the state minimum wage.
Data shows other common instances of unpaid wages happen at national chains when the payroll office is not local, and managers are unaware of the local minimum wage rates. For example, in one case this year, a large national retailer with a store near Denver’s border mistakenly thought it was subject to the state minimum wage instead of Denver’s minimum wage. Through education and cooperation, the employer corrected the mistake, raised employees’ wages, and paid 25 employees more than $2,600 in backpay.
This graph shows Denver’s unpaid wages recovered by the labor division of the Denver Auditor’s Office by year. In 2013, $101,905 were recovered. In 2014, $142,977 were recovered. In 2015, $84,232 were recovered. In 2016, $701,787 were recovered. In 2017, $417,271 were recovered. In 2018, $265,243 were recovered. In 2019, $678,559 were recovered. In 2020, $1,017,363 were recovered. In 2021, Denver Labor recovered $690,298 for workers.
“Our analysts use education and collaboration to find solutions with Denver businesses,” Denver Labor Executive Director Jeffrey Garcia said. “We are not a ‘gotcha’ organization. When employers and employees both work with us, the outcomes are better for everyone.”
Common examples of industries that yielded complaints in the first two years of wage enforcement included homecare, marijuana, valet/parking services, salons, pedicabs, and restaurants. We see higher rates of noncompliance in the first part of the year when employers still need to update their payrolls to reflect the higher wages.
By using data analysis, active enforcement, and on-site visits, our analysts hope to reach employers sooner and catch errors faster. That means employers will be less likely to owe large amounts of backpay and workers will more quickly receive the money they are owed.
“Our data-driven work will help solve problems quicker,” Auditor O’Brien said. “Every worker deserves to be paid at least the minimum wage, and this new approach will help us get there faster.”
To conduct an investigation without a prior complaint, city ordinance lists several criteria for there to be a reasonable belief that an employer violated the law — including:
- A pattern of multiple credible complaints in a particular industry, demonstrating a likelihood that certain workers in that industry are regularly not paid wages as required by law.
- Our office receiving credible information from a state or federal agency, demonstrating an increased likelihood of unpaid wages.
- Data establishing a reasonable basis to conclude a particular employer or industry is likely to owe employees unpaid wages.
- A business owner failing to pay the minimum wage at another business with common ownership interests.
The Denver minimum wage applies wherever the work was performed, even if the business’s main office is outside the city. Employers and workers can check the address where work was performed using our regional address finder on our website, DenverWages.org.
“We have all the tools businesses need to navigate Denver’s wage ordinances,” Executive Director Garcia said. “And many of our tools are available in English, Spanish, and other languages so workers can know their rights.”
Tools for workers and businesses on our website include:
- A regional address finder.
- A tips tracker tool for the food and beverage industry.
- A minimum wage calculator.
- A restitution calculator spreadsheet for employers.
- FAQs and explanations of the investigations process for businesses.
- Complaint forms in English and Spanish.
- Mandatory site posters for businesses.
Employers in the food and beverage industry may reduce wages by up to $3.02 per hour if they can show documentation that an employee received at least that amount in tips. If employers claim the full tip credit, the tipped wage is $12.85 per hour.
The tip credit applies only to the food and beverage industry. All other employers must pay the full minimum wage, even if their employees sometimes receive tips.
Our office makes every possible effort to keep complaints confidential, and we do not ask for or consider citizenship or immigration status. Employers may not take adverse action against a worker for their involvement in an investigation.
AUDITOR TIMOTHY O'BRIEN, CPA
Denver Auditor's Office
201 W. Colfax Ave. #705 Denver, CO 80202
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