Their regular wage was not wrong however their prevailing wages were calculated with the fringe benefit for overtime which has happened for 2 yrs. can we changed that?
For example employee johns regular wage is $15 hr, his prevailing wage is $16. + $2.33 fringe, however if he works overtime on a certified payroll job overtime is calculated by 1.5*$16=24+$2.33 fringe.
What would give you the basis to sue? How were you damaged or what economic damages did you suffer as a result of the overpayment? I don't think that you have "standing" to bring a lawsuit. If anyone is to be contacted it is the CO Department of Labor.
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With notice, you can certainly correct the pay moving forward.
As for seeking to recoup pay from the past two years, that probably isn't a good idea. Even if you don't care about the morale of your workforce, which would definitely be destroyed by such a move, there may be arguments of waiver or detrimental reliance that would prohibit recalculating wages that have already been paid.
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