Denver Auditor's Office Gets Subpoena Power Back to Help Underpaid Workers

Until now, if an employee were to accuse a private business of wage theft, there wasn't much the Denver Auditor's Office could do to get information from employers — such as employee lists and payroll records — to prove that others were being underpaid as well.

But yesterday, all that changed.

Denver City Council held a final vote during its April 29 meeting on a subpoena bill from Denver Labor (a division of the Auditor's Office) that would give it the legal power to request information, by way of a formal written court order, pertaining to wage theft reviews.

This subpoena power had been stripped away from the Auditor's Office in 2022 after councilmembers decided it was too broad. The decision came after Auditor Tim O'Brien sued the council for amending the original 2021 bill-turned-law that granted his office the ability to subpoena, only allowing for on-site access to information and materials.

Now, Denver Labor gets one of its strongest tools back.

"In the majority of situations, employers are the ones who have the information that we need to determine whether there was a violation of someone's rights," Denver Labor Executive Director Matthew Fritz-Mauer tells Westword.

"The violation could be a wage violation, but it could also be retaliation," he says. "So if we're looking at wages, we need payroll records. We need records of hours worked, wages paid, deductions made. That's how we figure out if someone was underpaid on minimum wage or overtime, and if there were any illegal deductions made against their wages. If they don't provide it to us, it's very hard to figure out whether and to what extent somebody has been underpaid — and by how much."

Employees, union members and labor advocates have been pushing for the return of subpoena power since it was taken away, arguing that it will help the Auditor's Office uncover countless cases of wage theft. Last year, more than $2.04 million in restitution was collected and doled out to nearly 3,600 workers across Denver, according to the city's 2023 Annual Wage Theft Report.

Auditor Tim O'Brien was the only elected official in the City of Denver without subpoena power.

Councilmembers Sarah Parady and Amanda Sawyer co-sponsored the subpoena bill, which passed unanimously under a council with six new members since 2021. A second bill supporting this "common-sense tool" has been introduced for the office's Audit Services Division, according to officials.

Community members and local leaders gathered at City Hall ahead of the subpoena vote to call for support of the Audit Services bill. Denver Labor says the legislation "will ensure community partners and city contractors are held equally accountable for how they use taxpayer dollars."
The 2021 bill that led to Auditor O'Brien gaining subpoena power was in response to an apparent cold shoulder he kept getting from public business when conducting audits, according to Fritz-Mauer.

Tayler Overschmidt, director of communications for the Auditor's Office, tells Westword that there were a number of audits that ignited the fight back in 2021.

"We had a couple of audits that we ran into where there were oddities — specifically, third parties who had signed contracts with the city with audit clauses in them refused to provide all the information that we requested during the course of that audit," she says. "One example was the audit of the Westin Hotel out at the airport. We requested information from them, but did not receive all the information that we requested. Another example is the Denver Art Museum, which has been an area of concern for quite a while."

According to Overschmidt, the Auditor's Office was looking into the museum back in 2021 for art owned by the city that wasn't being housed at the museum.

"If someone were to pass away and they want to leave their art collection to the people of Denver, it actually becomes property of the City and County of Denver," she explains. "The City and County of Denver isn't an art museum. We don't want pieces of artwork hanging out just in whatever building; we want it in the art museum. So we wanted to look into the ownership, and we asked for information about that list."

Overschmidt says the museum did not want to give investigators full access to the owner list, and the audit was ultimately closed without all of the requested information and with an "impairment" in it.

"We had no other recourse that forced them to give that information to us, short of us taking them to court or having a lawsuit over breach of contract," Overschmidt says. "We don't want to take them to court; we don't want to take any of our community partners to court. So we started looking into this subpoena-power issue to give us a sort of middle point to sort out how we can get access to the information that we're supposed to have access to under existing contracts without having to take valued community partners all the way through a lawsuit that can take years and cost a bunch of money."

The bill passed by councilmembers only applies to wage theft inquiries, but the Auditor's Office is supporting a "common-sense tool" bill that would provide more subpoena power for cases similar to that of the Denver Art Museum.

According to Overschmidt, until now the only punishment for private employers who don't provide info is a (one-time) $1,000 fine. 

"For some businesses — especially the bigger ones — $1,000 is nothing," Overschmidt says. "It's a business decision to say, 'You know what, okay. Here's $1,000. Because it could be a lot more money I'd have to pay back to the workers.' So it's not effective a lot of times. And so then we're in a really stuck spot."

Under the new subpoena law, private employers will now be fined $1,000 per day until they provide the requested information; the payments will be indefinite.

"Theoretically, forever," Fritz-Mauer says when asked how long someone could be fined. "It's a pretty persuasive tool."

When Denver Labor conducts a wage theft review based on a complaint, it will typically ask for payroll records, employee lists and other pertinent information to verify said complaint and see if others are being shortchanged, as well.

"We have the information from the worker who made the complaint to us, and we can get their pay stubs from them, and that's enough for us to have a finding in the case and close the case for that one worker," Overschmidt says. "But without the actual information for the entire population of employees at this business, we have no idea how many people may be underpaid...so we just have to close the case. And that leaves a lot of folks who very well could be underpaid or are victims of wage theft, and we have no real recourse to be able to get that information."

A recent Denver wage theft case that would have benefited greatly from the subpoena power, according to Overschmidt and Fritz-Mauer, was a case in which a worker at the popular Mexican restaurant Kahlo's was paid below the local minimum wage, to the tune of $21,083.20.

"We got a complaint from a worker about wage theft, and it was credible," Fritz-Mauer recalls. "We sent our notice of investigation to the employer, and they wouldn't give us the records. We assessed the fine against them for not producing the records, and then we were able to use the workers' information to determine what they were owed by the employer. Rarely, though, is it just one person experiencing wage theft. Without those records, we don't know if other people's rights are being violated, and we can't determine by how much. And so we know that there are people at this restaurant who are likely still being underpaid, and there's just no recourse."

While the hope is to simply collect information using a subpoena, Overschmidt and Fritz-Mauer say it's not their only goal.

"We're trying to get information faster and more efficiently," Overschmidt says. "It will be a very collaborative process, rather than just saying, 'Here's a lawsuit.'"

According to Overschmidt, multiple "backstops" were built into the Denver Labor subpoena bill to give employers a fair chance at complying, which is part of why it has gained so much support, she says.

"If a business objects — they feel we aren't entitled to the information for some reason — there's a step in the bill where they can take the matter to a third-party independent hearing officer," Overschmidt explains. "The officer can then determine if the info is appropriate, within the scope of audit work, and whether there should be any additional protections."

At the end of the day, what Denver Labor and the Auditor's Office want most is to hold employers accountable and to get people the money that they're owed, according to officials. Having subpoena power plays a direct role.

"Being able to issue a subpoena and enforce the subpoena in court is a way to escalate the conversation to better ensure that we're going to be able to get the information we need to make sure that there's laws being followed," Fritz-Mauer concludes. "I hope we won't have to use it. But there are a couple of investigations right now where I think it may be a useful tool sooner rather than later."

This story has been updated to reflect the April 29 passage of the bill giving the Denver Auditor subpoena power. It now awaits Mayor Mike Johnston's signature.