DIRECT INVESTIGATION RULES

1

DEPARTMENT OF LABOR AND EMPLOYMENT

Division of Labor Standards and Statistics

DIRECT INVESTIGATION RULES

7 CCR 1103-8

[Editor’s Notes follow the text of the rules at the end of this CCR Document.]

_________________________________________________________________________

Adopted February 9, 2024; effective April 1, 2024.

Rule 1. Statement of Purpose and Authority

1.1

Authority and relation to prior orders. The general purpose of these Direct Investigation Rules is

to implement the Division of Labor Standards and Statistics’s authority to conduct direct

investigations of potential violations of labor standards law contained in C.R.S. Title 8, Articles 1,

2, 4-6, 12, 13.3, 13.5, and 14.4. These rules are adopted pursuant to the Division’s authority in,

and as enforcement of, these Articles, and are intended to be consistent with the requirements of

the State Administrative Procedure Act, C.R.S. § 24-4-101, et seq. Unless otherwise noted, in

these Rules: all statutes cited apply the most recent 2023 versions of the Colorado Revised

Statutes, all rules cited apply the most recent versions adopted as of the adoption of these Rules.

1.2

These Rules are intended to remain in effect to the maximum extent possible. If any part

(including any section, sentence, clause, phrase, word, or number) is held invalid, (A) the

remainder of the Rules remain valid, and (B) if the provision is held not wholly invalid, but merely

in need of narrowing, the provision should be retained in narrowed form.

1.3

Incorporation by reference. Colo. Const. art. XVIII, § 15 (2023); Title 8, Articles 1, 2, 4-6, 12, 13.3,

13.5, and 14.4 of the Colorado Revised Statutes, including the Equal Pay for Equal Work Act,

C.R.S. § 8-5-101 et seq. (2024); 7 CCR 1103-1; 7 CCR 1103-7; 7 CCR 1103-11, 7 CCR 1103-13,

and 7 CCR 1103-15, are hereby incorporated by reference into this rule, except where these

Rules differ. Such incorporation excludes later amendments to or editions of the constitution,

statutes, and rules

12, 13.3,

13.5, and 14.4 of the Colorado Revised Statutes, including the Equal Pay for Equal Work Act,

C.R.S. § 8-5-101 et seq. (2024); 7 CCR 1103-1; 7 CCR 1103-7; 7 CCR 1103-11, 7 CCR 1103-13,

and 7 CCR 1103-15, are hereby incorporated by reference into this rule, except where these

Rules differ. Such incorporation excludes later amendments to or editions of the constitution,

statutes, and rules. They are available for public inspection at the Colorado Department of Labor

and Employment, Division of Labor Standards & Statistics, 633 17th Street, Denver, CO 80202.

Copies may be obtained from the Division of Labor Standards & Statistics at a reasonable

charge. They can be accessed electronically from the website of the Colorado Secretary of State.

Pursuant to C.R.S. § 24-4-103(12.5)(b), the agency shall provide certified copies of them at cost

upon request or shall provide the requestor with information on how to obtain a certified copy of

the material incorporated by reference from the agency originally issuing them. All Division Rules

are available to the public at www.coloradolaborlaw.gov. Where these Rules have provisions

different from or contrary to any incorporated or referenced material, the provisions of these

Rules govern so long as they are consistent with Colorado statutory and constitutional provisions.

Rule 2. Definitions

2.1

“Division” means the Division of Labor Standards and Statistics in the Colorado Department of

Labor and Employment; “Director” means the Director of the Division.

2.2

“Employee” has the meaning provided by C.R.S. § 8-4-101(5), except as follows, or as otherwise

required by statute:

Code of Colorado Regulations

Secretary of State

State of Colorado

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abor Standards and Statistics in the Colorado Department of

Labor and Employment; “Director” means the Director of the Division.

2.2

“Employee” has the meaning provided by C.R.S. § 8-4-101(5), except as follows, or as otherwise

required by statute:

Code of Colorado Regulations

Secretary of State

State of Colorado

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(A)

under the Equal Pay for Equal Work Act, C.R.S. § 8-5-101 et seq., “employee” has the

meaning provided by C.R.S. § 8-5-101(4);

(B)

under the Healthy Families and Workplaces Act, “employee” has the meaning provided

by C.R.S. § 8-13.3-402(4);

(B)

under the Public Health Emergencies Whistleblower Act, C.R.S. § 8-14.4-101, et seq.

“employee” and “worker” have the meaning provided by C.R.S. § 8-14.4-101(5), and

where that Act applies, provisions of these Rules applicable to an “employee” shall apply

equally to a non-employee “worker”; and

(D)

under the Agricultural Labor Rights and Responsibilities Act, as codified in relevant part

at C.R.S. §§ 8-6-101.5, 8-6-120, and 8-13.5-201 et seq., “employee” has the meaning

provided by C.R.S. §§ 8-13.5-201 and 8-2-206(1)(b), as applicable.

2.3

“Employer” has the meaning provided by C.R.S. § 8-4-101(6), except as follows, or as otherwise

required by statute:

(A)

under the Healthy Families and Workplaces Act, C.R.S. § 8-13.3-401 et seq., “employer”

has the meaning provided by C.R.S. § 8-13.3-402(4);

(B)

under the Chance to Compete Act, C.R.S. § 8-2-130 et seq., “employer” has the meaning

provided by C.R.S. § 8-2-130(2)(c);

(C)

under the Colorado Public Health Emergencies Whistleblower Act, C.R.S. § 8-14.4-101,

et seq., “employer” and “principal” have the meaning provided by C.R.S. § 8-14.4-101(3),

and where that Act applies, provisions of these Rules applicable to an “employer” shall

apply equally to a non-employer “principal”;

(D)

under the Equal Pay for Equal Work Act, C.R.S. § 8-5-101 et seq., “employer” has the

meaning provided by C.R.S

blic Health Emergencies Whistleblower Act, C.R.S. § 8-14.4-101,

et seq., “employer” and “principal” have the meaning provided by C.R.S. § 8-14.4-101(3),

and where that Act applies, provisions of these Rules applicable to an “employer” shall

apply equally to a non-employer “principal”;

(D)

under the Equal Pay for Equal Work Act, C.R.S. § 8-5-101 et seq., “employer” has the

meaning provided by C.R.S. § 8-5-101(5); and

(E)

under the Agricultural Labor Rights and Responsibilities Act, as codified in relevant part

at C.R.S. §§ 8-6-101.5, 8-6-120, and 8-13.5-201 et seq., “employer” has the meaning

provided by C.R.S. § 8-3-104(1).

2.4

A “correct address” for a party, including but not limited to as used in C.R.S. § 8-4-101(15) and

these or other applicable Division rules, can include, but is not limited to (unless defined

otherwise by statute, rule, or order): a physical or email address the party used, or provided to the

Division, in the investigation (unless the party notifies the Division to use an alternate valid

address instead); the party’s email address; the address on file with the Colorado Secretary of

State for the party or their registered agent; or an address actually used, or publicly posted as a

current address for mail or deliveries, by the party.

2.5

“Fine” means any monetary amount assessed against an employer and payable to the Division.

2.6

“Notice of Investigation” means a notice to an employer that identifies potential violations under

investigation and includes initial demands for documentation and records.

2.7

“Notice of Investigation Termination” means a notice to an employer that no further action is

contemplated by Direct Investigations regarding the potential violations described in the Notice of

Investigation.

2.8

“Place of employment” is defined at C.R.S. § 8-1-101(12).

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demands for documentation and records.

2.7

“Notice of Investigation Termination” means a notice to an employer that no further action is

contemplated by Direct Investigations regarding the potential violations described in the Notice of

Investigation.

2.8

“Place of employment” is defined at C.R.S. § 8-1-101(12).

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2.9

“Labor Standards law” is defined as laws within, and rules promulgated pursuant to, C.R.S., Title

8, Articles 1, 2, 4-6, 12, 13.3, 13.5, and 14.4, and includes Colo. Const. art. XVIII, § 15; 7 CCR

1103-1, 1103-4, 1103-5, 1103-7, 1103-9, 1103-11; and any other Rules promulgated pursuant to

the Division’s authority in the foregoing statutes.

2.10

“Witness” means any person or entity ordered to provide, or volunteering to provide, documents,

information, or other evidence in a direct investigation.

2.11

A “written demand,” including as used in C.R.S. § 8-4-101(15), can be sent to the employer by

electronic means, including but not limited to email and text message. Wages must be owed at

the time of sending for the written demand to be considered valid. The penalty provisions in

C.R.S. § 8-4-109(3)(b) effective on January 1, 2023, shall apply if the 14-day deadline for

payment after the sending of a written demand without penalties passes on or after January 1,

2023, unless a prior written demand was sent more than 14 days before January 1, 2023.

Notwithstanding the foregoing, when a Division Notice of Investigation, Citation, Notice of

Assessment, or other Division-issued document satisfying the requirements of a written demand,

is sent where the 14-day deadline for payment is on or after January 1, 2023, the passing of that

deadline triggers those penalty provisions, regardless of whether a prior written demand was sent

before the Division’s. A Citation and Notice of Assessment will constitute a written demand for the

payment of any wages described therein, in accordance with C.R.S

g the requirements of a written demand,

is sent where the 14-day deadline for payment is on or after January 1, 2023, the passing of that

deadline triggers those penalty provisions, regardless of whether a prior written demand was sent

before the Division’s. A Citation and Notice of Assessment will constitute a written demand for the

payment of any wages described therein, in accordance with C.R.S. § 8-4-101(15), and will be

treated as such pursuant to C.R.S. § 8-4-109(3).

Rule 3. Investigations

3.1

The Division may initiate a direct investigation of any potential violations of any labor standards

law it has authority to enforce or investigate. The scope of an investigation may include all

impacted individuals, including all of an employer’s employees or contractors, or any subset or

combination thereof.

3.2

The Division shall initiate the direct investigation by sending a Notice of Investigation to a correct

address of the employer. The direct investigation is not limited to the time period or potential

violations identified in the Notice of Investigation. The Division may, at its discretion, expand the

direct investigation beyond the scope of the Notice of Investigation.

3.3

The employer and any witness may designate an authorized representative to represent it during

the investigation.

3.4

In the course of a direct investigation, the Division may utilize all information-gathering powers

authorized by statute through orders to the employer or any witness, and may issue fines

pursuant to this same authority for failure or refusal to comply with these orders. See, e.g., C.R.S.

§§ 8-1-114, -116, -117, -120; 8-4-111(1)(c), -118, -120; 8-5-103(1)(b).

3.5

During a direct investigation, the Division may issue directives, instructions, protocols, and

procedures to an employer and witnesses, and may establish protocols or procedures governing

an investigation. Such directives, instructions, protocols, and procedures are presumed to be

“lawful order[s]” within the meaning of C.R.S. § 8-1-140(2)

-117, -120; 8-4-111(1)(c), -118, -120; 8-5-103(1)(b).

3.5

During a direct investigation, the Division may issue directives, instructions, protocols, and

procedures to an employer and witnesses, and may establish protocols or procedures governing

an investigation. Such directives, instructions, protocols, and procedures are presumed to be

“lawful order[s]” within the meaning of C.R.S. § 8-1-140(2). Failure to comply with a lawful order

may subject the noncompliant individual or entity to fines. Id.

3.6

The employer is responsible for ensuring the Division has its current contact information and

correct address as defined in Rule 2. Conclusive proof of service includes proof of delivery to any

correct address as defined in Rule 2. Proper service is effective regardless of whether the party

reads or opens the material served.

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Rule 4. Determination

4.1

Upon completing the investigation, the Division may issue a determination detailing its

conclusions.

4.1.1

The Division may issue a Citation against an employer that the Division determines by a

preponderance of evidence has violated labor standards law.

4.1.2

The Division may issue to the employer a Notice of Assessment for one or more

employee(s) whom the Division determines by a preponderance of the evidence has

suffered a violation of labor standards law and who is owed any remedies.

4.1.3

Determinations by the Division may include all remedies authorized by law, that are

supported by the Division’s findings, including:

(A)

monetary or other relief authorized by the statute(s) under which the investigation

was conducted, including but not limited to, where applicable —

(1)

any unpaid wages, penalties, and/or fines under C.R.S. Title 8, Article 4,

(2)

if a violation of C.R.S. Title 8, Articles 13.3 (HFWA) or 14.4 (PHEW) cost

an employee or worker a job or pay, back pay plus either reinstatement

or (if reinstatement is infeasible) front pay for a reasonable period, and/or

under which the investigation

was conducted, including but not limited to, where applicable —

(1)

any unpaid wages, penalties, and/or fines under C.R.S. Title 8, Article 4,

(2)

if a violation of C.R.S. Title 8, Articles 13.3 (HFWA) or 14.4 (PHEW) cost

an employee or worker a job or pay, back pay plus either reinstatement

or (if reinstatement is infeasible) front pay for a reasonable period, and/or

(3)

other fines or penalties authorized by statutes applicable to the

investigation;

(B)

fines or penalties authorized by the statutes on Division investigative and

enforcement authority in C.R.S. Title 8, Articles 1, 4, and 5; and/or

(C)

order(s) to cease non-compliance and/or effectuate compliance, as authorized by

the statute(s) under which the investigation was conducted and statutes on

Division investigative and enforcement authority in C.R.S. Title 8, Article 1, 4, 5,

and 6.

4.1.4

The Division may issue to the employer a Notice of Assessment inclusive of all wages,

penalties, fines and/or other remedies assessed upon the employer.

4.1.5

The Citation and Notice of Assessment will identify the violation, any wages, penalties,

and/or other remedies owed to the employee(s), and any fines owed to the Division. If the

Division concludes that wages and/or other sums are owed to the employee, but cannot

calculate the precise amount due, then the Division may award a reasonable estimate.

4.1.6

For cases in which a valid written demand was sent prior to the issuance of the Citation

and Notice of Assessment, to encourage compliance by the employer, if the employer

pays the employee(s) all wages and compensation owed within 14 days after a Citation

and Notice of Assessment is sent to the employer, the Division may reduce by up to fifty

percent any penalties imposed pursuant to C.R.S. § 8-4-109, and may waive or reduce

any fines imposed.

4.1.7

If the Division does not determine that an employee suffered a violation of labor

standards law, the Division may issue a Notice of Investigation Termination

nsation owed within 14 days after a Citation

and Notice of Assessment is sent to the employer, the Division may reduce by up to fifty

percent any penalties imposed pursuant to C.R.S. § 8-4-109, and may waive or reduce

any fines imposed.

4.1.7

If the Division does not determine that an employee suffered a violation of labor

standards law, the Division may issue a Notice of Investigation Termination.

4.2

The Division shall send the determination via U.S. postal mail, electronic means, or personal

delivery to a correct address of the employer on the date the determination is issued.

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4.3

The appeal deadline is calculated from the date the Division’s determination is originally issued

and sent to the employer.

4.4

If any copies of the Division’s determination are sent to the employer after the date of its

issuance, those copies are only courtesy copies and do not change the 35-day appeal and

termination deadlines.

Rule 5. Appeal

5.1

The employer may appeal a Citation and one or more Notices of Assessment.

5.1.1

A valid appeal is a written statement that is timely filed with the Division, explains the

clear error in the determination or other grounds that are the basis for the appeal, and

has been signed by the employer or the employer’s authorized representative. The

employer is encouraged to use the Division’s appeal form.

5.1.2

No appeal will be heard and no hearing will be held unless the appeal is received by the

Division within 35 calendar days of the date the determination is sent. It is the

responsibility of the employer filing the appeal to ensure the appeal is received by the

Division within the 35-day filing deadline.

5.1.3

Upon receipt of the appeal, the Division will notify the parties of the date of the hearing

and any interim deadlines via U.S. postal mail, electronic means, or personal delivery

Division within 35 calendar days of the date the determination is sent. It is the

responsibility of the employer filing the appeal to ensure the appeal is received by the

Division within the 35-day filing deadline.

5.1.3

Upon receipt of the appeal, the Division will notify the parties of the date of the hearing

and any interim deadlines via U.S. postal mail, electronic means, or personal delivery.

5.1.4

Upon receipt of the appeal, the Division will send a copy of the record of its investigation

to the parties via U.S. postal mail, electronic means, or personal delivery. All evidence

submitted to the Division as part of the investigation is part of the record on appeal and

need not be resubmitted.

5.1.5

The filing of an appeal does not, except to the extent that a stay is granted, toll any

deadlines applicable under, or triggered by the issuance of, the determination, decision,

or order being appealed.

5.2

Parties to the appeal will be the employer and the Division Direct Investigations program. Notices

to the Division as a party, including disclosure of new evidence pursuant to Rule 5.6, should be

sent via email to cdle_ls_direct_investigations@state.co.us.

5.3

An employer that timely files a valid appeal of the Division’s determination will be afforded an

administrative appeal hearing before a Division hearing officer. Parties may appear by telephone.

5.4

Consistent with C.R.S. § 8-4-111.5, the hearing officer shall have the power and authority to call,

preside at, and conduct hearings. The hearing officer has the power to administer oaths and

affirmations, take depositions, certify official acts, and issue subpoenas to compel the attendance

of witnesses and the production of books, papers, correspondence, memoranda, and other

records deemed necessary as evidence in connection with a disputed determination.

5.4.1

The provisions of C.R.S. § 8-4-111.5(2)(b) and (c), and of (3)(b), are applicable to an

appeal filed pursuant to Rule 5.1 to the maximum extent allowable by law

tify official acts, and issue subpoenas to compel the attendance

of witnesses and the production of books, papers, correspondence, memoranda, and other

records deemed necessary as evidence in connection with a disputed determination.

5.4.1

The provisions of C.R.S. § 8-4-111.5(2)(b) and (c), and of (3)(b), are applicable to an

appeal filed pursuant to Rule 5.1 to the maximum extent allowable by law.

5.5

The parties may submit new testimonial evidence to the hearing officer in accordance with

deadlines imposed by the Division. The parties may submit new documentary or other non-

testimonial evidence in accordance with deadlines imposed by the Division and upon showing

“good cause,” which may be assessed based on any relevant factors, including but not limited to:

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5.5.1

That the new evidence was previously not known or obtainable, despite diligent

evidence-gathering efforts by the party offering the new evidence;

5.5.2

That the party failed to receive fair notice of the investigation or of a key filing by another

party or by the Division to which the new evidence is responsive;

5.5.3

That factors outside the control of the party prevented a timely action or interfered with

the opportunity to act, except that the acts and omissions of a party’s authorized

representative are considered the acts and omissions of the party and are not considered

to be a factor outside the party’s control as intended by this rule;

5.5.4

That a determination raised a new issue or argument that cannot be responded to

adequately without the new evidence;

5.5.5

That, at the investigation stage, the party offering new evidence requested more time to

submit evidence, yet was denied, and in the hearing officer’s judgment (a) the need for

more time was legitimate and did not reflect neglect by the party, (b) the denial of the

request for more time was unwarranted, and (c) exclusion of the evidence would cause

substantial injustice to the party; and/or

5.5.6

That, at the investigation stage, the party offering new evidence requested more time to

submit evidence, yet was denied, and in the hearing officer’s judgment (a) the need for

more time was legitimate and did not reflect neglect by the party, (b) the denial of the

request for more time was unwarranted, and (c) exclusion of the evidence would cause

substantial injustice to the party; and/or

5.5.6

That failure to admit the evidence otherwise would cause substantial injustice and did not

arise from neglect by the party.

5.6

New evidence must be sent to all other parties to the appeal. Failure to send all new evidence to

all other parties to the appeal may result in the evidence being excluded from the record.

5.7

If the employer that filed the appeal does not participate in the hearing, the appeal may be

dismissed.

5.8

The Division shall keep a full and complete record of all proceedings in connection with the

investigation. All testimony at a hearing must be recorded by the Division but need not be

transcribed unless the hearing officer’s Decision is appealed.

5.9

The hearing officer may, upon the application of any party or on his or her own motion, convene a

prehearing conference to discuss the issues on appeal, the evidence to be presented, and any

other relevant matters that may simplify further proceedings.

5.10

The hearing officer shall make a decision on each relevant issue raised, including findings of fact,

conclusions of law, and an order. The hearing officer will decide whether the Division’s

determination is based on a clear error of fact or law.

5.11

The hearing officer shall not engage in ex parte communication with any party to an appeal.

5.12

The Division shall promptly provide all parties with a copy of the hearing officer’s decision via U.S.

postal mail, electronic means, or personal delivery, as consistent with applicable law

e hearing officer will decide whether the Division’s

determination is based on a clear error of fact or law.

5.11

The hearing officer shall not engage in ex parte communication with any party to an appeal.

5.12

The Division shall promptly provide all parties with a copy of the hearing officer’s decision via U.S.

postal mail, electronic means, or personal delivery, as consistent with applicable law.

5.13

Any party to the administrative proceeding may appeal the hearing officer’s decision only by

commencing an action for judicial review in the district court of competent jurisdiction within 35

days after the date of mailing of the decision by the Division. A respondent may appeal a Division

determination in accordance with Rule 6 of the Wage Protection Rules, 7 CCR 1103-7. This rule

applies to the maximum extent consistent with the Colorado Administrative Procedures Act,

C.R.S. §§ 24-4-105, -106. Judicial review is limited to appeal briefs and the record designated on

appeal.

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5.14

An appeal may, at the discretion of the hearing officer, be sequenced and/or divided into two or

more stages on discrete questions of liability and/or relief (i.e., bifurcation), yielding two or more

decisions and/or phases of the appeal..

Rule 6. Certified Copy

6.1

The Division shall issue and file a certified copy of the Division’s final decision in accordance with

C.R.S. § 8-4-113(2); 7 CCR 1103-7, Rule 2.4; and any other applicable statute or rule.

Rule 7. Preservation of Actions

7.1

No Citation, Notice of Assessment, or Notice of Investigation Termination issued by the Division

is intended to preclude an employee from initiating or pursuing a civil action or other

administrative proceeding. Evidence obtained by the Division in the course of a direct

investigation may be considered in determining whether an employee has initiated a wage

complaint pursuant to 7 CCR 1103-7, Rule 4.2.1.

Rule 8

otice of Assessment, or Notice of Investigation Termination issued by the Division

is intended to preclude an employee from initiating or pursuing a civil action or other

administrative proceeding. Evidence obtained by the Division in the course of a direct

investigation may be considered in determining whether an employee has initiated a wage

complaint pursuant to 7 CCR 1103-7, Rule 4.2.1.

Rule 8. Discrimination and Reprisal Prohibited

8.1

The provisions against retaliation, interference, and discrimination for protected activity in labor

standards law (including but not limited to C.R.S. §§ 8-1-116, 8-1-140, 8-4-120, 8-6-115, 8-13.3-

407, 8-14.4-102; 7 CCR 1103-11; and 7 CCR 1103-1) apply to individuals who assist or otherwise

participate in the Division’s investigations.

8.1.1

Unlawful “interference” with a Division investigation or proceeding, at any stage (e.g.,

from anticipated investigations through appeals or post-decision enforcement) includes

any act (whether an affirmative act, an omission, or a statement) that:

(A)

tends to mislead or intimidate actual or potential witnesses, or discourage actual

or potential witnesses from providing evidence or information to the Division;

(B)

conceals relevant evidence or information from the Division, or knowingly or

recklessly furnishes false or misleading evidence or information to the Division;

or

(C)

otherwise inhibits the provision of accurate evidence or information to the

Division.