Alaskan corporation sued for violation of Fair Labor Standards Act
An employee of an Alaskan corporation is suing the company for violation of the Fair Labor Standards Act.
The organization's CEO hired an expediter and project manager for the corporation, who received yearly bonuses based on earnings for project work. The employee alleged the company had failed to pay several of these bonuses and was in violation of the Alaska Wage and Hour Act. When the company filed for bankruptcy protection the day after the lawsuit was filed, the worker continued his claims in a personal suit against the chief executive, according to Business and Legal Resources.
While the Alaska Wage and Hour Act does not define the term "employer," it refers to FLSA for all terms that are not specifically defined by the state. Therefore, the employee was able to continue his lawsuit under the federal act.
Utilizing the practice of piercing the corporate veil, the jury found the CEO to be in violation of the FLSA and personally owe the worker bonus compensation in the amount of $62,311, according to Business and Legal Resources. An individual owner or CEO can be found personally liable under the "alter ego" theory.
While certain lawsuits are unavoidable, using time and attendance software to log employee time and keep track of benefits and bonus contracts can help prevent pay discrepancies.
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