In 2023, the City of Denver adopted the Civil Wage Theft Ordinance. The new ordinance creates new procedures and penalties regarding civil wage theft. The Ordinance provides significant protections for employees and independent contractors who work within the City and County of Denver.
What is Wage Theft?
Under the Ordinance, wage theft occurs when an employee is not paid the wages to which they are entitled, as promised by the employer and as required by law. The term wages encompasses the minimum wage, salaries, overtime pay, paid sick time, and other money earned for the time spent working.
Who Is Covered By The Wage Theft Ordinance?
The Ordinance applies to all employers operating in the City and County of Denver and all workers who work in Denver. The statute covers traditional employees and independent contractors. The Ordinance excludes government entities from coverage.
Does the Wage Theft Ordinance Provide More Severe Penalties And A Longer Statute of Limitations Than Other Wage Statues?
The Answer is YES.
The Denver Ordinance provides that an aggrieved employee may recover three times the amount of unpaid wages. Under the Colorado Wage Claim Act, the employee can recover two times the unpaid wages, and three times only if the employee proves a “willful” violation of the Act. A willful violation need not be proved under the Denver Ordinance to recover the three times liquidated damages amount. The statute of limitations is also longer. Under the Denver Wage Theft Ordinance , the statute of limitations is three years. Under the Colorado Wage Act, the standard statute of limitations is only two years, and a three-year statute of limitations is only available for willful violations.
May Aggrieved Individuals Recover A Higher Rate Of Interest Under The Wage Theft Ordinance?
Yes. Under the Denver Wage Theft Ordinance, a prevailing employee is entitled to interest on unpaid wages at the rate of 12% per year.
Is Retaliation Prohibited By The Wage Theft Ordinance?
The Denver Wage Theft Ordinance also strictly prohibits retaliation against employees who complain about unlawful wage practices. Under the Ordinance, there is a rebuttable presumption that any adverse action against an employee within 90 days of a complaint constitutes retaliation. This presumption may only be rebutted by clear and convincing evidence that the action was taken for legitimate reasons unrelated to the complaint.
The Wage Theft Ordinance Creates “Up-The-Chain” Accountability for Companies that Hire Contractors Who Fail To Pay Their Employees.
The Denver Ordinance creates liability not only for employers, but also liability for “up-the-chain” companies that hire employers who fail to pay their employees. For example, a hotel might hire a cleaning company, which provides workers for janitorial services, or a general contractor on a construction site might hire a subcontractor to provide labor for electrical or other work. Under the Ordinance, “up-the-chain accountability” means that any employer who ultimately benefits from a worker’s labor may be required to pay their wages if the immediate employer (i.e., the subcontractor) fails to do so. This liability attaches to companies that are “regularly engaged in business or commercial activity” and only after the Denver Auditor provides notice of the potential violation and attempts to collect from the actual employer.
What Is the Complaint Process for Aggrieved Employees?
If an employee or independent contractor is not paid earned wages, they may file a complaint with Denver Labor. Denver Labor will investigate all allegations of wage theft and help the employee or independent contractor collect the money they are owed, plus interest. Employees also have a private right of action and may institute action in Denver District Court.
Are there other requirements for Businesses in the City and County of Denver?
Denver businesses must post auditor-approved signage, in English and Spanish. If that’s not possible, businesses must provide the information to workers individually, in the worker’s primary language, in a way that is accessible and obvious.
Businesses must also 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 the business.
Baird Quinn has significant experience representing clients on civil wage theft claims. Please let the civil wage attorneys at Baird Quinn assist you with any issues involving wage theft.