Wage theft experts call for more resources in Denver

Wage theft experts call for more resources in Denver

Published on September 25, 2024

Lea el artículo en español(PDF, 138KB)

DENVER - New research shows tens of thousands of workers in the Denver metro area are paid below the minimum wage each year - and Denver Labor needs more resources to take action and address the harms of this injustice.

"There's more work to do," Denver Auditor Timothy M. O'Brien, CPA, said. "We've gotten better results than ever when it comes to wage theft restitution, but we as leaders in this community cannot rest on the beginnings of success when there are still thousands of people who need our help."

While Denver Labor is a national leader in fighting wage theft, the Workplace Justice Lab@Rutgers University's new study released this month found at least 45,000 workers a year were paid below the minimum wage in the Denver metro area from 2007 through 2022 - with the numbers sharply increasing even higher than that since 2020.

To compare, in 2023 Denver Labor used all its resources to recover restitution and damages for about 1,850 minimum wage workers -just a fraction of the estimated number of minimum wage theft victims.

"Enforcement is critical, and the results of this study suggest it is imperative that enforcement budgets and staff numbers continue to grow to ensure that Denver workers are paid what they are owed," said Jenn Round, director of the labor standards enforcement program for the Workplace Justice Lab@Rutgers University.

Rutgers estimates the scope of the problem is much larger than previously known; their research suggests underpaid workers on average lost at least $136 million a year, or nearly $3,000 per worker. But this number only includes minimum wage violations and not the broader range of wage theft violations Denver Labor is tasked with enforcing, including overtime and paid sick leave violations, which are covered by Denver's new civil wage theft protections that just began last year.

Denver Labor's average 2023 restitution for individual workers across all wage theft violation types was $572.29.

Denver Labor worked closely with Rutgers to get the best data possible to inform our wage investigation and education work. In line with their research on wage theft in cities and states across the country, researchers Jake Barnes, Jenn Round, Daniel J. Galvin, Divya Sundar, and Janice Fine analyzed federal data to estimate minimum wage violations for people living in the Denver metro area from 2007 through 2022. The study also compared risks across demographics and high-risk industries to help inform our proactive investigative approaches.

Wage theft disproportionately affects underrepresented people. Rutgers confirmed our findings that women, noncitizens, and people of color are more likely to experience minimum wage theft. Specifically, the report says:

• Women are roughly 50-60% more likely than men to experience a minimum wage violation.
• Black, Asian American, and Pacific Islander workers are more than twice as likely than White workers to be paid below the minimum wage.
• Latine workers are 70% more likely than White workers to experience a violation.
• Noncitizens are roughly 80% more likely than citizens to be paid below minimum wage.
• Younger and older workers are also at higher risk of experiencing minimum wage theft.
• Part-time workers and those without a high school diploma are both more than three times as likely to be paid below minimum wage.

The research also shows minimum wage violation rates are highest in private households, food services and drinking places, personal and laundry services, accommodation, retail trade, and administrative support, among others - all industries Denver Labor has investigated previously.

According to the report, statistics show, "Denver Labor has largely been successful in directing their proactive efforts toward high-impact cases in industries with high rates of underlying wage theft. In other words, the agency has effectively allotted its resources to increase its impact in uncovering minimum wage theft in the majority of the seven highest-violation industries."

However, despite our best efforts and effective use of resources, tens of thousands of workers continue to see their wages stolen, and researchers expect the problem to continue to harm working people. While Denver was the first local government in Colorado to enact a local minimum wage, we are likely still only able to help a fraction of the victims of wage theft.

"We use data-driven and innovative approaches to wage theft enforcement in Denver, but as the problem keeps growing, I call on all city leaders to continue allocating the resources needed to help every victim in the city," Auditor O'Brien said.

Wage theft harms the whole community. Lost wages mean money that isn't going back into Denver's economy through food and other grocery purchases, paying for shelter, and supporting local businesses. It also reflects an extraordinary amount of money in unpaid taxes and insurance premiums that support the work of the city and the key social safety net programs we all rely on.

And the size and scope of this problem makes it impossible for businesses that play by the rules to compete fairly against rivals whose low prices are supported by illegal practices.

"It's clear that Denver Labor is using its resources efficiently and in a way that's making an important difference for Denver workers," said Jake Barnes, the study's lead author. "But given our findings, Denver Labor needs more capacity to fully address the underlying problem."

Denver Labor is committed to continuing its work of strategic and active enforcement, in coordination with education efforts about wage theft throughout the community.

AUDITOR TIMOTHY O'BRIEN, CPA
Denver Auditor

Denver Auditor´s Office

201 W. Colfax Ave. #705 Denver, CO 80202
Email: [email protected]
Call: 720-913-5000
Follow us on FacebookConnect with us on Twitter
Read our social media policy

Tagged as:

• Auditor