Denver Labor 2020 Annual Report

Our work matters. We serve the people of Denver by championing accountability in our audit work and through education and enforcement of wage law on behalf of everyone who lives and works here. After another year of meaningful work by the Auditor’s Office, I am pleased to present the 2020 Annual Report.

In this report, you will find summaries of our audits and highlights and impacts identified from our follow-up work, as well as the achievements of my exemplary staff as they serve the people of Denver, further their professional development and represent our office in the community. This report showcases the many accomplishments of Audit Services and Denver Labor’s Prevailing Wage and Minimum Wage divisions.

Auditor’s Letter

In any given year, transparency, accountability, and good stewardship of public resources are the backbone of good government. In challenging years like 2020, our work in these areas is indispensable. We serve the people of Denver by championing accountability in our audit work and through education and enforcement of wage laws on behalf of everyone who lives and works here. 

In 2020, we worked effectively despite significant and unexpected challenges caused by the COVID-19 pandemic and resulting budget shortfalls. In this 2020 Annual Report, I am pleased to present a look back at our work and how it served our community. 

In this report, we provide a detailed look at Denver Labor’s record-breaking success in getting people paid and supporting employers as they comply with Denver’s wage laws. This Annual Report also serves as our annual Denver Labor Wages Report on our minimum wage and prevailing wage efforts. We also share the achievements of my exemplary staff, and how we maintain open communication with all members of our diverse community. 

First, let me extend my appreciation to Mayor Michael B. Hancock, the Denver City Council, the Audit Committee, and members of the city’s operational management for supporting our mission throughout the year.

As an independent agency, we take an objective look at how public money is used and how efficient and effective the city’s services are for the people of Denver. Our work is performed on behalf of everyone who cares about the city, including its residents, workers, and decision-makers. Our mission is to deliver independent, transparent, and professional oversight in order to safeguard the public’s investment in the City and County of Denver.

In 2020, Denver Labor had a record year — recovering more lost wages for workers than ever and finding even more new ways to educate employers despite the gathering and training restrictions that were necessary during the pandemic.. 

Every penny matters in a recession like we all faced this past year. Our minimum wage and prevailing wage teams recovered more than $1 million in restitution in 2020 — money that went back to workers who should have received the correct wages in their paychecks. 

Thanks to our team of analysts, we also recovered restitution for the largest number of underpaid employees ever uncovered in a single wage investigation by our office. Nearly 850 workers for one employer got paid for wages they should have received under Denver’s citywide minimum wage. We were able to work with the employer to get the backpay returned to the employees without needing to pursue any fines or attorney’s fees. 

My goal is to get money to workers according to the law, not to punish employers for an honest mistake. Our office frequently works to find solutions that will bring employers into compliance without putting them out of business. Among those proactive efforts, we began live weekly training sessions called “Wages Wednesday.” Anyone can watch these trainings live or as recordings on our Facebook page — and they can ask questions in English and Spanish. These — along with other specialized trainings for community groups and employers and other virtual events — allowed our team to build relationships and answer questions despite the obstacles the pandemic created. 

We continue to work hard to engage the people we work for: the public. We believe the people of Denver have a right to know what we do on their behalf and what their government is doing for them. As a result, we continue to find creative ways to reach all parts of our community on their terms. In 2020, we expanded our Spanish language outreach, attended and hosted virtual events and training sessions, continued our monthly “Ask the Auditor” video series, and reimagined our monthly email newsletter in both English and Spanish. Follow us on Facebook, Twitter, Instagram, Nextdoor, and LinkedIn for updates from our office, or email auditor@denvergov.org to share your thoughts, concerns, or questions. Read this Annual Report in Spanish on our website.;

I am very proud of my team’s accomplishments and of our efforts to work with city agencies and residents, employers and employees, to ensure a better Denver for everyone. 

Sincerely,


Auditor's Signature

Denver Auditor Timothy M. O’Brien, CPA


Denver Labor - Wages Report

About Denver Labor

Denver Labor Organizational Chart Denver Labor works to foster community relationships with businesses and labor organizations and educate our diverse community on labor issues. We audit 100% of certified payrolls and investigate 100% of wage complaints.

The Denver City Council passed a local minimum wage ordinance on Nov. 25, 2019. In 2020, the ordinance set the hourly citywide minimum wage at $12.85. In 2021, the ordinance requires that wage rate to increase to $14.77 per hour. Both the separate minimum wage for city contractors and the prevailing wage rate still apply as determined by law. Denver Labor will continue efforts in 2021 for both education and enforcement of all wage laws through payroll auditing, wage investigations, and outreach.

In 2020, our team of skilled minimum wage analysts demonstrated leadership and innovation as they launched new efforts to begin protecting the minimum pay of every employee in the city and county. Executive Director Jeffrey Garcia and our team of analysts developed a new complaint-based system to investigate possible underpayments. The citywide minimum wage took effect for the first time at the start of the year and our team was ready to go on Day 1.

The citywide minimum wage was $12.85 per hour, with few exceptions. City leaders estimated more than 50,000 workers were impacted by the wage increase. Our team worked to educate employers and employees about the law, and we conducted dozens of investigations based on complaints.

During the 2019 legislative session, the Colorado Legislature enacted a law permitting local governments to set a jurisdiction wide minimum wage. In November 2019, the Denver City Council created Denver Revised Municipal Code Chapter 33.7-16, which sets the local minimum wage for Denver and prescribes the means for setting, enforcing, and complying with the new local minimum wage.

Our office believes education for the public and for employers is the key to a successful citywide minimum wage ordinance. This year, we held nearly 30 live training sessions called “Wages Wednesday” related to all of Denver’s wage laws, what the laws mean for employees and employers, and how they can stay in compliance. We made these virtual trainings accessible by conducting them in both English and Spanish and making our bilingual staff available to answer questions in either language. Despite the COVID-19 pandemic, we continued to hold virtual events, community meetings, and training sessions throughout the year.

We also offer several useful tools for both employers and employees on our website — including a regional address finder to help determine whether work performed was within the boundaries of the City and County of Denver, a minimum wage and tip calculator, an employer underpayment calculator, and complaint forms in English and in Spanish.

Our minimum wage team also worked to educate employees and employers about and enforce the city’s contractor minimum wage, which impacted hundreds of workers particularly at Denver International Airport. The contractor minimum wage rate in- creased on July 1 to $14 per hour and will go up again on July 1, 2021, to $15 per hour. Workers covered by the contractor minimum wage work on city projects in concessions, catering, maintenance, ramp and cargo work at the airport, hospitality, security, and other jobs on city property.

Denver Labor Wage Timeline


Minimum Wage Restitution Stories

Minimum Wage Complaint Leads to Pay for Hundreds
Denver Labor worked with an employer to get nearly 850 underpaid people the wages they earned. It was the single largest number of underpaid employees we’ve ever uncovered in a wage investigation. The restitution totaled $130,442, and the employer agreed to pay every single employee their backpay and they agreed to start paying Denver’s minimum wage going forward

National Retailer Pays Restitution in Full
A large national retail store is near the border of Denver and Littleton in the Marston neighborhood. Mistakenly believing it was not subject to Denver’s citywide minimum wage, the company continued paying its employees below the $12.85 per hour required wage. For the first six weeks after the new minimum wage law went into effect, there was an underpayment of more than $7,000 to almost 70 employees. The company paid restitution in full, and all employees at the store are now being paid at least $12.85 per hour.

Minimum Wage Ensured for All Ages
A local ice cream shop mistakenly believed it did not have to pay the citywide minimum wage to employees under 18, resulting in an underpayment of about $300 for six employees. Unless minors are part of a city-certified youth employment program, they must be paid the minimum wage.

Denver Labor Checks the Math
A national restaurant was not paying the correct minimum wages for its tipped and nontipped employees. Upon notice that it was not paying Denver’s citywide minimum wage, the restaurant attempted to complete backpay to all employees. When Denver Labor reviewed payroll documents and proof of backpay to confirm, we discovered another $1,400 that was still owed. After working with the company, 32 employees received a total of more than $3,600 in unpaid wages.

Marijuana Dispensary Workers Get Pay Raise
A cannabis dispensary was mistakenly underpaying its retail clerks and growers working in multiple locations within the City and County of Denver. Upon being informed of its obligation to pay $12.85 per hour for anyone working in Denver, the company raised the affected employees’ wages and paid all owed restitution. Twenty employees were paid a total of almost $4,000 in unpaid wages.

Prevailing Wage

Every year, the city takes on billions of dollars’ worth of new projects and construction. The Auditor’s prevailing wage team works with both contractors and workers on all Denver projects to ensure compliance and payment according to the law. We have enforced prevailing wage requirements in Denver since the 1950s. Auditor O’Brien changed the way Denver does business on all projects and changed how work is per- formed on city property by revamping the city’s Prevailing Wage Ordinance in 2016. Now, his growing team works to bring all parties together to make Denver an efficient and good place to work.

In 2020, Denver Labor broke a record for the most restitution recovered for workers — surpassing $1 million.

Contractors and subcontractors doing work at or in connection with the operation of any public building or conducting public work on behalf of the City and County of Denver must pay their workers at least prevailing wage. Prevailing wage is required on contracts of $2,000 or more for construction, improvement, repair, maintenance, demolition, or janitorial work.

Wage reporting software, easy-to-use tutorial videos, and public question-and- answer sessions all help streamline the process. The simplified process aims to reduce the burden on contractors and encourages more of them to seek work with the city. Our analysts work with employees to ensure the employees are classified correctly, and we also work with employers to guide them through the reporting process.

The role of the Prevailing Wage Division includes education as well as enforcement.

Prevailing Wage Restitution Stories

Here are some examples of how we worked with both employers and employees this year to recover unpaid wages in accordance with the Prevailing Wage Ordinance:

$270,000 Recovered for Airport Workers
Denver Labor was contacted by an employee who had concerns about his fringe benefits. After conducting an investigation that included meeting with the employer and the employees’ union, a labor analyst was able to identify a significant underpayment to workers at Denver International Airport— including the need for $270,000 in restitution to a union pension plan. The employer was highly cooperative, and all parties are working together to ensure restitution is paid.

Denver Labor Works with Contractor to Get Correct Payment
After failing to submit certified payroll for nine months, an asphalt company submitted the proper documents. We found the contractor underpaid seven employees by a total of more than $18,000. Initially, the contractor calculated the restitution owed as greater than the actual amount due. But our office worked with the contractor to calculate the correct amount so they could pay the actual restitution owed.

Worker Receives Almost $2,000 in Owed Wages
A large earth-moving contractor employing power equipment operators and laborers paid more than $15,000 in total restitution to 37 employees. Our analysts determined the company was claiming unapproved fringe benefits, resulting in a failure to meet prevailing wage requirements. One trackhoe operator received almost $2,000 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, as of May, $400,000 has been recovered.

 

Minimum Wage Results

24

11

8

  Cases Opened    Closed With Restitution     Closed - No Underpayment     Current Cases  

 

Prevailing Wage Results

100%

76k

1M

19k 

5M

  Certified Payroll Audit Rate   Payrolls Audited     Restitution Paid ($)      Employees on Audited Payrolls     Project Payroll Value ($)  

 


Professional Details

As an accomplished Certified Public Accountant with more than 40 years of auditing experience, Auditor O’Brien values the professional development and growth of his entire staff. Audit team members met high standards again this year through continued professional learning and achievements, industry conferences, staff presentations, involvement in professional organizations, and community contributions.

Denver Labor Accomplishments

Auditor O’Brien, Denver Labor Executive Director Jeffrey Garcia, and the labor team had a year of growth and significant impact in 2020. The Denver Labor team continues to build relationships in the community to encourage employers to pay employ- ees according to the law. This year, Denver’s new citywide minimum wage took effect and led to pay raises for thousands of workers across many industries. Our analysts audited 100% of certified payrolls for pre- vailing wage and investigated every minimum wage underpayment com- plaint. Read more about the excellent work this team accomplished in our Denver Labor Wages Report section.

Professional Accomplishments

In 2020, our office — like others in the city — faced new and unexpected professional challenges, including adjusting to remote working, continuing to engage with agencies and the public, learning new video conferencing technology, and juggling the unexpected demands of family and work during the pandemic. The Audit Committee’s monthly meeting has been broadcast remotely since March, so we could continue to share important information about our findings and recommendations. And, our Denver Labor team found ways to get restitution to employees without needing in-person contact in many cases.

Auditor O’Brien was especially proud this year of his office, which managed to keep productivity up even as he and all staff members took furloughs and faced other new challenges, we served the people of Denver through thoughtful auditing and hard work, even in the face of adversity.

Auditor O’Brien is a certified public accountant with more than 40 years of auditing experience. He recognizes the importance of professional development, of continuous learning throughout a career, and of serving the community in the office and beyond. Auditor’s Office team members met high standards again this year through continued professional learning and achievements, industry conferences, staff presentations, involvement in professional organizations, and community contributions.

 

Outstanding Staff

Our staff comprises many talented, well-educated, and hard-working people. This year, our team worked to improve their work, themselves, our office, and our industry.

Deputy Auditor Valerie Walling served as a member of the Jefferson County Audit Committee and she was on the Institute of Internal Auditors’ Denver board.

Our Safety Committee helped  keep members of our office safe and healthy this year with the leadership and support of committee members Edyie Thompson, Kharis Eppstein, Darrell Finke, Rafael Gongón, Daniel Summers, Vilma Balnyte, Nicholas Jimroglou, Alexandra Dickerson, and Tyson Faussone.

Our New Employee Onboarding Committee worked hard this year to implement updates to our process for welcoming new employees and to find ways to bring on new employees in a remote-work environment. Committee members included Tammy Phillips, Edyie Thompson, Emily Owens Gerber, Dawn Wiseman, John Danilenko-Dixon, Tayler Overschmidt, Valerie Walling, and Kharis Eppstein. Audit Supervisors Emily Owens Gerber, Sonia Montano, and Kharis Eppstein also developed an extensive multi-course curriculum in auditing essentials for our new and existing audit staff.

Our Events Committee kept our office connected even from home by organizing virtual gathering opportunities. Finding ways to maintain positive relationships and a strong team was more important than ever this year, since our team couldn’t stay in touch in person. Thanks to committee members Rafael Gongón, Cyndi Lubrano, Anna Hansen, Cody Schulte, Kristin McCormack, Megan O’Brien, Brandon Stolba, and Shaun Wysong for your fun ideas and organization!

To continue to provide quality work and meaningful services to the people of Denver, the Auditor’s Office is committed to attracting, supporting, and retaining an educated and well-qualified staff of auditors, analysts, and other professionals to carry out our mission. Members of our skilled staff hold a number of advanced degrees — including public policy doctorate, law, and master’s degrees in public administration, accounting, political science, business administration, and international relations.

Many also have professional and academic certifications and designations — such as certified public accountant (CPA), audit analytics and data science academic certificates, certified internal auditor (CIA), certified government auditing professional (CGAP), certified fraud examiner (CFE), certification in risk management assurance (CRMA), certified information systems auditor (CISA), chartered financial analyst (CFA) and chartered global management accountant (CGMA).

 


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AUDITOR TIMOTHY O'BRIEN, CPA
Denver Auditor



Denver Auditor´s Office

201 W. Colfax Ave. #705 Denver, CO 80202
Emailauditor@denvergov.org 
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