The wage claim investigation process

Division of Labor Standards and Statistics
707 17th Street, Denver, CO 80202 | 303-318-8441
www.ColoradoLaborLaw.gov | www.LeyesLaboralesDeColorado.gov

Interpretive Notice & Formal Opinion ("INFO") #2A:
The Wage Claim Investigation Process

Overview

This INFO covers the Division wage claim investigation process, including each party's responsibilities to provide information on their claims and defenses.

• Investigation duration varies, depending on how complex the claim is, how responsive the parties are, how clear the evidence is, and how many and how complex the other claims the Division is investigating are.
• The law on the investigation process and parties' responsibilities that this INFO summarizes are in the Wage Protection Rules, 7 CCR 1103-7 and the Colorado Wage Act, C.R.S. § 8-4-101, et seq.
• Complaints can be filed not only against businesses, but also against "individuals" who qualify as "employers," see INFO #11A.
• Wage complaints can include claims for any type of unpaid "wages" or "compensation."
• Other INFOs in this series detail what follows investigations: #2B, remedies ordered by determinations of violations; #2C, appeals of determinations; #2D, enforcement of orders in determinations of violations.

Who Can File a Wage Complaint?

• Any employee claiming a wage and hour violation may file a complaint.
• Common questions on who can file:
• True "independent contractors" can't claim that amounts they're owed for work count as "wages" the Division can investigate and order additional remedies for (penalties, etc.) — but a true independent contractor still may be able to file a breach of contract complaint in court. If a worker claims they were misclassified as an independent contractor — e.g., because their work was for an employer's benefit and subject to their control, rather than genuinely independent work — then they can file a wage claim as an "employee," with the Division or in court, and may be subject to additional fines. (See Super Mario Construction, LLC, DLSS Case # 20-0026 (Nov. 23, 2021), ordering corporate employer plus two individual owners, jointly liable as "employers," to pay almost $900,000 to 22 construction workers they misclassified as "independent contractors"; and The Sound Hound LLC d/b/a The Sound Hound Pet Spa, DLSS Case #3806-21 (Hearing Officer Decis. #22-036, July 25, 2022), a dog grooming business owing unpaid commissions plus penalties to a misclassified dog groomer.)
• Anyone owed wages can file a complaint, in the Division or a court, regardless of immigration status. The Division won't ask for or consider immigration status, nor (if it learns anyone's status) provide that information to any person or entity. Attempting to use immigration status to interfere with wage and hour rights or investigations is unlawful retaliation that may result in fines, backpay, and other remedies.

Wage Claim Investigation Steps

Note that throughout all stages of any investigation, parties must promptly notify the Division of any change in contact information, including mail, email, or phone number.

Step 1: A claimant files a wage complaint with the Division.

• The Division must investigate any wage complaint it receives for up to $7,500 in unpaid wages or compensation. Claimants can file complaints alleging more than $7,500 owed, but must acknowledge, at the time of filing the complaint, that $7,500 may be the limit of what the Division awards in wages.

Example 1: A claimant files a wage complaint that their employer refused to pay a $10,000 commission they earned on a large sale. The wage complaint explains the commission agreement and calculates the $10,000 owed, but agrees the Division Notice of Complaint may be for only $7,500 in owed wages.

• Generally, the Division may order wages that were due within two years before the complaint filing, except three years if investigation shows a violation was willful (see INFO #2B on what is or isn't willful); and the two- or three-year limit may be extended if an employer responsible for a violation also prevented the employee from knowing their rights, such as by failing to post required notices of rights. (Quicker v. Colorado Civil Rights Commission, 747 P.2d 682 (Colo. 1987), applying "equitable tolling" where an employer failed to post required notice of employee rights.)
• Claimant responsibilities: the claimant must provide an explanation that is clear, specific, and shows they are entitled to wages. Documents from the claimant should show: (a) that a violation of Colorado wage and hour law may have occurred, and (b) a reasonable estimate of wages due (Wage Protection Rules, 7 CCR 1103-7, Rule 4.2). Commonly, the Division will send the claimant a "Request for Information" (RFI) letter requesting additional information or documents about their claim.
• Investigations of possible violations as to multiple employees at the same employer: wage complaints may be filed on behalf of others at the same employer with similar violations (C.R.S. § 8-4-111(2)(a)(I); Rule 4.2.2). While the Division must investigate all claims filed by individual claimants, it isn't required to extend investigations to others "similarly situated" to the claimant. Based on limited resources, the Division generally declines to investigate for others similarly situated, but: the Division will still investigate for each individual filing a complaint; claimants or others can inform the Division of others' situations at their workplace, and the Division may, in its discretion, initiate a group or employer-wide investigation; and even in an investigation limited to the individual who filed the complaint, the claimant can have co-workers or others be witnesses for their complaint. For efficiency, the Division may send an employer an NOC listing all individual complaints and alleged violations filed against that employer.
• The Division may stage investigations in two or more phases (most commonly, in investigations spanning multiple employees), e.g.: a first phase on whether violations occurred; then (if a violation is found in the first phase) a second phase on amounts owed to each individual (Rule 3.4; e.g., Cervantes v. Wendy's of Colo. Springs, No. 22CA0795 (Colo. App. Dec. 29, 2022) (unpublished), approving such bifurcation). The Division may dismiss or stay an investigation if another investigation is pending with another Labor Department that has jurisdiction over the dispute and the parties, if the Division concludes that its involvement would be duplicative, not productive (Rule 3.2.2).

Step 2: The Division sends the employer a "Notice of Complaint" (NOC), describing the wages alleged to be owed and providing the employer with a copy of the claimant's complaint and other evidence. The NOC serves as a "written demand" for wages under C.R.S. § 8-4-101(15), triggering a 14-day deadline for payment of wages owed.

• The NOC includes all amounts and types of wages the employer may owe at the time it is sent. This may include wages the claimant earned between the time of the complaint and the time of the NOC, as well as any additional amounts the Division calculates may be owed.

Example 2: In January, a claimant files a complaint for $5,000 in unpaid overtime, but they work two months more, quitting in March. By the later date the NOC is sent, the claimant is owed $1,000 more in overtime, plus $2,000 in vacation the employer didn't pay out. The NOC explains that $8,000 is allegedly owed ($6,000 overtime, $2,000 vacation), but the Division will award at most $7,500 in wages.

• 14-Day Wage Payment Deadline. Because the NOC is a "written demand" for wages, the employer must pay all wages owed within 14 days of the sending of the NOC to avoid potentially being ordered to pay penalties (C.R.S. § 8-4-109(3)(b), requiring an automatic penalty of at least $1000 or 2x the wages owed; see also INFO #2B). As of August 6, 2025, the Division may waive penalties if an employer pays all owed wages within 14 days of the sending of a Notice of Complaint, even if the employer failed to pay within 14 days of an employee's earlier written demand — however, the Division cannot waive penalties "if the alleged violation is a second or subsequent failure or refusal to pay an employee's wages or compensation within five years" (C.R.S. § 8-4-109(3.5)).

Step 3: The employer has an opportunity to respond to the NOC within 21 calendar days. At this point, the burden shifts to the employer to prove the claimant more likely than not isn't entitled to the claimed wages.

• The employer response must include a completed "Employer Response Form," plus any information or documents the Division requested (pay statements, etc.). An insufficient response may be deemed failure to respond under C.R.S. § 8-4-113(1)(b), resulting in a determination of a violation and fines.
• The employer has a responsibility to provide all relevant evidence showing it is more likely than not that claimed wages aren't owed. Evidence may include: pay statements; records of hours worked; employment agreements; and/or communications between the parties (email, text, etc.). The employer must also keep, and not delete, all relevant evidence as soon as an investigation begins and until a final decision that allows no further appeal or lawsuit (Rule 4.4.5). For more detail, see the "Evidence in Investigations" section below.
• The employer must ensure that the Division receives its written response by the date listed in the NOC (21 calendar days from date the Notice was sent), by any method (mail, email, fax, electronic portal, or in person). The employer may request an extension by showing good cause, but that won't extend the 14-day deadline to pay wages owed to avoid possible penalties owed to the claimant under C.R.S. § 8-4-109(3)(b).
• Failure to provide relevant records that the law requires employers to keep (pay statements, etc.) or to provide the Division, may be considered evidence against the employer. Such records may be excluded from a later appeal unless there was good cause for not submitting it in the investigation (Rule 6.3).

Example 3: An employer responds by mail, and a postage meter is applied to the response 4 days before the deadline. But the response is not postmarked until the deadline, and the Division does not receive it until 2 days after the deadline. The employer failed in its duty to timely respond. (ADCO Pro Cleaning Supply, Inc., DLSS Case #0370-18 (Hearing Officer Decis. No. 19-003, Jan. 8, 2019).)

Step 4: If the employer pays part or all of what is claimed after the NOC, but before a determination:

• An employer may agree it owes all or some of the wages claimed in the NOC, and pay the claimant the amount it believes is owed. But unless the claimant withdraws the claim, the Division investigation will continue, and the employer must continue participating, and complying with Division orders. Even if the employer pays all wages claimed, the Division may issue a determination that the employer violated the law by failing to pay wages when they were owed, and may order penalties and/or fines (see INFO #2B).
• If an employer pays part, but not all, of the wages identified in the NOC, the part paid will generally be applied to the amount owing in the investigation — except the Division may still order up to $7,500 when (a) more than $7,500 in wages were owed and the employer's payment didn't bring the amount owed under $7,500, or (b) the payment was for something other than wages, like a severance payment (C.R.S. § 8-4-101(14)(b)).

Example 4: A claimant files a wage complaint that their employer failed to pay $15,000 in owed wages: $10,000 for their last three paychecks, and $5,000 in unpaid vacation. The Notice of Complaint alleges these different amounts owed, but explains that the maximum amount it may order is $7,500. The employer voluntarily agrees to pay the unpaid vacation ($5,000), but no other part of the claim. The Division determination then finds that the employee was owed wages for final pay and vacation, and awards $7,500 in wages. Even though the employer paid part of what it owed, the remaining amount owed ($10,000) was over the $7,500 limit, so the Division may order the maximum amount.

Note: Different rules apply to payments made while an appeal is pending. At that stage, payments made after the determination may offset the amount the Hearing Officer orders in the appeal decision.

Example 5: A Division determination finds that $10,000 in unpaid wages were actually owed, but orders an employer to pay the maximum claim amount, $7,500. The employer appeals, but agrees that $5,000 of the wages are owed, and pays the employee that amount before the hearing. The Hearing Officer decision affirms the Division determination that $10,000 was owed. However, the most it can order is $2,500: the $7,500 ordered by the Division determination, less the employer's $5,000 payment.

Step 5: The Division issues a determination after reviewing all evidence from the investigation. If the employer fails to meet its burden, or fails to respond, the Division issues a "Citation & Notice of Assessment" ordering the employer to pay the claimant wages and/or penalties, plus fines provided by law (see INFO #2B).

Step 6: Either party may appeal the Division determination. An appealing party must submit a signed appeal request (see the Division's appeal form) that explains a clear error in the determination, and must ensure the Division receives the appeal within 35 calendar days of the date the determination was sent. For more on appeals, see INFO #2C.

Evidence in Investigations

• Claimants and employers may submit any type of relevant evidence. Note that evidence submitted is not confidential, and is subject to being shared with the opposing party.
• If claimant and employer evidence conflict, the Division will weigh the evidence — for example, a minor inaccuracy or speculation about what happened, or merely that an employer has a policy that appears to comply with the law, will not outweigh strong, substantial evidence from the other party. (Hicks v. Colo. Hamburger Co., 2022 COA 149 (Colo. App. 2022); Cervantes, at ¶28; Pacheco v. SOMIP, Inc., No. 22CA0985, 2022 Colo. App. LEXIS 1941 (Colo. App. Dec. 29, 2022) (unpublished).)
• The Division may consider the credibility of evidence submitted, including any potential bias of a witness who shares information supporting either a claimant or an employer. (Cervantes, at ¶¶ 36–37, noting it is "risky" to rely on affidavits of current employees since the employer "potentially had significant influence over" those workers.)
• The Division can consider circumstantial evidence, and possible inferences from evidence, such as if an employer changed a workplace practice after it received a Notice of Complaint. (Hicks, at ¶38; Cervantes, at ¶28.)

Settlement Agreements

Parties to a claim may opt to enter into a settlement agreement. The Division takes no position on whether parties should or should not enter into a settlement agreement. The Division cannot provide legal advice to any party, and does not participate in any negotiations. Parties may choose to use the courtesy settlement agreement form available on the Division's website, or their own settlement agreement. Upon receipt of a signed settlement agreement from the parties and confirmation of payment by the claimant, the Division will dismiss the settled claim. For more details, please review the instructions on the Division's settlement agreement form.

For More Information: Visit the Division website, call 303-318-8441, or email [email protected].

INFOs are not binding law, but are the officially approved Division opinions and notices on how it applies and interprets various statutes and rules. Last updated Aug. 6, 2025.