With the holidays behind us, I’d like to wish everyone a happy start to the new year. 2023 is already shaping up to be significant for our office. Impactful audits to be released this year are already well underway, Denver Labor is working to educate business and employees about the new $17.29 minimum wage, and the City Council passed a new wage theft ordinance that will allows thousands of workers to submit complaints to us about lost wages. This ordinance makes Denver workers the most protected in the United States.

But none of this could have been possible without the solid foundation we built it 2022. I’m pleased to share with you our 2022 Annual Report. Highlights from the report are below, but I encourage you to read the full report to see the scope of how we serve Denver residents.

Finally, thank you to everyone in the community who joined our staff members and the rest of the city in supporting migrants arriving in Denver over the holidays. If you would like the opportunity to help support them, please use the link below to find out how you can help.

Auditor Timothy O’Brien, CPA

2022 Annual Report shows important auditing and wage results

Our office serves as a check and balance for Denver’s government on behalf of the community we serve. Our operational priorities are your priorities. We had a year of meaningful work and growth, which we are proud to present in the 2022 Annual Report for both Audit Services and Denver Labor.

Last year, Auditor O’Brien accepted an appointment to the U.S. Comptroller General’s Advisory Council on Government Auditing Standards where he can share his expertise and help shape future auditing standards for auditors across the country. The advisory council gives input for updates to the standards also known as the “Yellow Book,” which the Denver’s Auditor is required by city charter to follow. And we were proud to pass our required peer review. This periodic review by auditors from other local governments ensures our work holds up and aligns with the Generally Accepted Government Auditing Standards.

We were proud to accept another national Knighton Distinguished Award from the Association of Local Government Auditors in 2022, making our audit of Denver’s airport parking shuttle system one of the best local government audits in the country. This is the fifth Knighton award for Auditor O’Brien’s administration.

Auditor O’Brien also gratefully accepted the David M. Walker Excellence in Government Accountability Award from the National Intergovernmental Audit Forum in recognition of his years of contributions to leadership in government. And Denver Labor Executive Director Jeffrey Garcia was recognized as 2022 Wage Justice Champion by Towards Justice for his work to get the money workers are owed according to the law back into the hands of the workers who earned it.

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 to safeguard the public’s investment in the City and County of Denver.

Audit impacts

When city managers take our findings seriously, we all benefit.

In 2022, we looked at how the city prepared for the first municipal election using the new Fair Elections Fund. Ahead of 2023, many political candidates are choosing to sign up for the taxpayer-funded donations matching program. We found the city needed more safeguards to verify certain requirements of the program, and managers were already making progress by the time we completed audit fieldwork.

We also prioritized equity by auditing the city’s equity programs and practices. We looked at the design and implementation of the city’s social equity office. We examined whether it was achieving its goal of increasing social equity and minimizing institutional, structural, and systemic racism within the City and County of Denver’s government. Although management’s intentions and work in the community might have worked to support important programs through the pandemic, we found the office lacked basic structures and strategies to support equity throughout all city agencies.

Other key audits completed in 2022 included a look at trash, recycling, and composting services ahead of significant changes planned for this year. We also examined mental health support in Denver’s jails as well as contract oversight at the airport.

We also completed 13 follow-ups in 2022 of reports issued since 2019, including two cybersecurity follow-up reports that did not have public recommendations. Out of the 91 recommendations we made across all those reports, agencies fully implemented only 36. This 40% full implementation rate is nearly the same as 2021.

Some work was out of city leaders’ control because of the pandemic. Limited resources and staff shortages citywide slowed some implementations beyond the agencies’ expected dates for completion. However, these hardships cannot account for all non-implemented recommendations.

See a list of all complete audits, follow-up reports, and audit impacts in the 2022 Annual Report .

Image used in the cover of Caring for Denver audit and follow-up reports.

Caring for Denver still allowed to use additional funds for operations

This follow-up looked at progress since our October 2020 audit of how the Department of Public Health and Environment ensures compliance with ordinance and Caring for Denver Foundation contract terms. We found the foundation continues to be able to overspend on administrative costs and use interest earned from tax dollars out of compliance with city ordinance.

Both city ordinance and the original Caring for Denver contract set the cap for administrative expenses at 5% while other tax revenue was to be used for people in need of mental or behavioral health services. Additionally, ordinance says money received from city sales and use tax collections, as well as any interest earned on those dollars, must be deposited in the Caring for Denver Special Revenue Fund.

The foundation reported interest income of about $339,000 in 2021 and of about $945,000 in 2022, as of October. However, these funds are not categorized the same as income from city sales and use tax collections as required by the founding City Council bill. Instead, the funds are categorized as “income without donor restrictions” which allows interest income to be used for administrative expenses when it should go to mental health and substance misuse programs.

“The voters clearly set a limit on how much tax revenue could be used for administrative costs because they wanted as much money as possible to go directly to supporting the people who need mental health services in the city,” Auditor O’Brien said. “When the foundation fails to observe that cap, it fails to live up to the intent of the voters.”

In 2022, Denver Labor broke records

We put more money than ever back into the hands of workers who were not paid according to the law — over $1.1 million.

Our office enforces both minimum wage and prevailing wage laws. We audit 100% of certified payrolls and investigate 100% of wage complaints.

Total number of minimum wage and prevailing wage cases in 2022: 450.
Total number of employees who received restitution under the minimum wage ordinance: 720.
Total number of employees who received restitution under the prevailing wage ordinance: 1,343.

New in 2022, the City Council gave our team of analysts the tools to proactively begin investigations of businesses considered to be high risk. We investigated employers in industries and locations such as those along Denver’s boundaries, national brand companies, restaurants, home care services, salons, and valet parking companies.

Common mistakes we identified included businesses claiming the tip credit when they should not, businesses thinking they are outside Denver’s boundary when they are not, and businesses paying a wage based on the employer’s office location instead of where the work was done.

Our office believes education for both employers and the public is the key to successful citywide wage enforcement. This year, we continued our live “Wages Wednesday” series on Facebook — in both English and Spanish. We are also in the community to do presentations, raise awareness, and build relationships with community groups. We also held weekly public trainings in both English and Spanish — and provided other materials online and in person in multiple languages. This allows for an ongoing, inclusive, and accessible dialogue about the city’s processes.

Find more wage enforcement data and examples of our successful restitution cases in the Denver Labor Wages Report as part of the 2022 Annual Report.

READ DENVER LABOR WAGES REPORT

A Denver Labor analyst shows minimum wage materials to a food and beverage worker.

Resources to help employers stay in compliance

We know underpayments are most commonly the result of honest mistakes, not intentional wrongdoing. As a result, we strive to prioritize education — and when we find businesses owe significant restitution, we work cooperatively to find solutions to help managers pay their employees while keeping their businesses going.

We offer many types of resources to support Denver’s businesses, including tools on our website, work site posters, pamphlets and educational materials, training opportunities, and one-on-one availability with our analysts.

On our website, employers can find tools like a map of Denver where employers can see whether the citywide minimum wage applies to their employees, a restitution calculator spreadsheet, and prevailing wage rates for each job classification. Our analysts are also happy to help in English and Spanish.

Find resources for businesses here.

Denver workers now the most protected in the United States

One in 10 workers have had their wages stolen. This especially impacts low-wage, immigrant, and female workers. In fact, a national study from the Center for Urban Economic Development, National Employment Law Project, & UCLA Institute for Research on Labor and Employment 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.

After years of work and strong community support, Denver’s City Council passed new wage theft protections for all workers in the City and County of Denver. This ordinance now guarantees administrative and civil remedies for wage violations for every worker and allows our office to hold contractors who work with disreputable subcontractors accountable. Denver workers are now the most protected in the United States and Denver Labor is ready to take on the job.

Our office is already working to grow our wage theft protection team and begin the stakeholder process for rule making. We are committed to involving the community as we work through the implementation of the ordinance and give both workers and employers a pathway to successful navigation of the law.

“The new ordinance empowers my Denver Labor team to support employees and hold bad actors accountable. We are ready to take on this large, new task and will continue to strive to put money back into the wallets of the workers who legally earned it, while still educating and supporting our local business community,” Auditor O’Brien said.

We will have more information to come about rule making and the new process for wage theft complaints in our future newsletters and on our website — so stay tuned.