Labor & Employment Law Daily Wrap Up, WAGE-HOUR—OVERTIME—N.D. Tex.: Provision of room and board didn’t satisfy employer’s obligation to pay overtime compensation, (Jan 21, 2026)

By Ronald Miller, J.D.

Any agreement attempting to substitute room and board—or any other benefit—for overtime pay is unenforceable.

An employee of an electrical contractor was granted a motion for summary judgment in a suit seeking to recover unpaid overtime, ruled a federal district court in Texas. The employer had argued that the parties had an agreement under which the employee would receive regular wages with room and board in lieu of overtime. However, the court noted that it is well settled that an employee may not waive his right to overtime compensation under the FLSA. Accordingly, the court held that the provision of room and board did not satisfy the employer’s obligation to pay overtime compensation (Maldonado v. Excell Electrical Contractors, Inc., No. 3:24-cv-2307-x (N.D. Tex. Jan. 15, 2026)).

Overtime claim. The employee worked for the electrical contractor from February 2022 through April 2023 and regularly worked between 70 and 85 hours per week. He was paid an hourly rate of $20, later increased to $22, but never received an overtime premium. According to the employer, the parties had an agreement under which the employee would receive his regular hourly wages with room and board in lieu of overtime pay.

To establish a prima facie claim for a violation of the FLSA’s overtime-compensation requirements, an employee must prove: (1) that there existed an employer-employee relationship during the unpaid overtime periods claimed; (2) that the employee engaged in activities within the coverage of the FLSA; (3) that the employer violated the FLSA’s overtime wage requirements; and (4) the amount of overtime compensation due.

The employer’s limited response to the employee’s motion for summary judgment only disputed whether it violated the FLSA’s overtime wage requirement. It contended that the employee could not establish an FLSA violation because the parties purportedly agreed that the employee would “be paid for 40 hours of work each week plus receive free room and board on the property in exchange for overtime pay.”

Agreement on room and board. The court determined that this argument failed as a matter of law. It is well settled that an employee may not waive his right to overtime compensation under the FLSA—even in a private agreement between parties. So, any agreement attempting to substitute room and board—or any other benefit—for overtime pay is unenforceable. The employee’s right to overtime compensation remained intact even assuming such an agreement existed. Because an employee’s right to FLSA overtime pay is nonwaivable, even through a private agreement between the parties, no genuine dispute of material fact exists as to the employer’s failure to comply with the FLSA’s overtime wage requirements.

Thus, even accepting the employer’s characterization of the supposed agreement, the provision of room and board did not satisfy the employer’s obligation to pay the employee overtime compensation. Accordingly, the court held that the employer failed to pay the employee the overtime compensation required by the FLSA.

Damages. An employer who violates the FLSA by failing to pay overtime compensation is liable to its employees for unpaid overtime plus an equal amount of liquidated damages.

Here, the employee submitted the employer’s paystubs for the duration of his employment, which included entries for each shift worked, hours, and pay rate. The employer did not dispute the damages the employee provided. Therefore, the employee established the amount of unpaid overtime wages owed, and the court found this sufficient to support an award of damages.

Having established the final element of his FLSA claim—damages—the employee prevailed and succeeded on his FLSA claim in its entirety.

Liquidated damages. Further, because the employee prevailed on his claim for unpaid overtime, he was also entitled to an equal amount in liquidated damages unless the employer demonstrated that the violation was made in good faith and based on reasonable grounds. However, the court found that the employer failed to show good faith or reasonable grounds for believing it was not violating the FLSA and awarded the employee liquidated damages in an amount equal to his damages.

Attorneys’ fees. Finally, an employee who prevails on an FLSA claim is entitled to reasonable attorneys’ fees and costs. Given that the employee was a prevailing party, he was therefore entitled to attorneys’ fees and costs.

The case is No. 3:24-cv-2307-x.

Judge: Starr, B.

Attorneys: Edith K. Thomas (Zipin Amster & Greenberg) for Adolfo Maldonado. Michael R. Cramer (Law Offices of Michael R. Cramer) for Excell Electrical Contractors Inc.

Companies: Excell Electrical Contractors, Inc.

Cases: WageHour Overtime RemediesDamages AttorneysFees TexasNews