Do Home Care Agencies Have to Pay Caregivers Overtime?
Yes. Since January 1, 2015, agencies cannot use the companionship or live-in exemptions, so every caregiver gets time-and-a-half after 40 hours. Who is covered, what counts, and the 2025 proposal to change it.
By Caregiver Scheduling Team ·
Yes. A home care agency must pay every caregiver time-and-a-half for hours over 40 in a workweek. The Department of Labor’s Home Care Rule took effect January 1, 2015, and it bars third-party employers, including agencies, from using the FLSA’s companionship and live-in exemptions (29 CFR 552.109). Only a family that employs a caregiver directly can still claim them. The Department proposed in 2025 to undo this. Until a final rule takes effect, the 2015 rule is the law.
Why can’t an agency use the companionship exemption?
Because the regulation says so in plain words. Third-party employers “may not avail themselves of the minimum wage and overtime exemption” for companionship services, and may not use the live-in overtime exemption either, even when the family is a joint employer (29 CFR 552.109). DOL’s Fact Sheet 79A repeats it: agencies must pay minimum wage for all hours and overtime after 40.
The exemption itself also got narrower in 2015. Companionship now means fellowship and protection, and hands-on care counts only if it stays under 20 percent of hours per client per week (29 CFR 552.6). The rule was challenged by industry groups and upheld by the D.C. Circuit in Home Care Association of America v. Weil in 2015.
Is the rule about to change?
Maybe, but not yet. On July 2, 2025, DOL proposed returning to the 1975 regulations, which would again let agencies claim both exemptions (DOL direct care page). The comment period closed in early September 2025. As of October 2026 the rulemaking sits at the final rule stage on the federal regulatory agenda (RIN 1235-AA51), and no final rule has been published.
In the meantime, the Wage and Hour Division told its investigators in July 2025 to stop enforcing the agency bar (Field Assistance Bulletin 2025-4). That changes who investigates, not the law: caregivers can still sue for unpaid overtime under the 2015 rule, and state law still applies.
Two things to keep in mind if it is finalized:
- A federal change does not touch state law. Several states wrote overtime for domestic and home care workers into their own statutes or wage orders, and those stay in force.
- Cutting overtime pay is a recruiting decision as much as a legal one. See why caregivers quit.
Which caregivers get overtime from an agency?
All of the non-exempt ones, which in practice means everyone who delivers care.
| Caregiver | Overtime from the agency? | Note |
|---|---|---|
| Companion or homemaker only | Yes | Agencies cannot use the companionship exemption |
| Personal care aide, HHA, CNA | Yes | Never qualified for the exemption |
| Live-in caregiver | Yes, after 40 hours | Sleep and meal time can be excluded only under specific conditions |
| Paid a day rate or per visit | Yes | Overtime is owed on the regular rate the pay produces |
| Caregiver on a 1099 | Yes, if they are really an employee | See 1099 caregivers |
| Caregiver employed directly by the family through a registry that is not the employer | No, if the exemption’s tests are met | The family, not the registry, claims it |
Overtime cannot be waived. A caregiver who signs a form agreeing to straight time for 50 hours is still owed the premium, and the agency is liable for it.
Which hours count toward 40?
Every hour worked for the agency in the workweek, across all clients. Four categories trip agencies up:
- Multiple clients. 28 hours with one client and 16 with another is 44 hours.
- Travel between clients. Drive time from one client’s home to the next during the day is hours worked (29 CFR 785.38). See travel time pay.
- Training, meetings and waiting. Required in-services and time spent waiting at a client’s door count (Fact Sheet 79D).
- Sleep time on live-in or 24-hour shifts. Excludable only with a written agreement and real conditions for sleep. See live-in sleep time pay and 24-hour shifts.
What does overtime actually cost?
The premium is half the regular rate for each hour over 40. For a caregiver at $17 an hour it is $8.50 an hour.
| Scenario, one client needing 48 hours a week | Weekly labor |
|---|---|
| One caregiver, 48 hours: 40 × $17 + 8 × $25.50 | $884.00 |
| Two caregivers, 24 hours each at $17 | $816.00 |
| Weekly saving from splitting the case | $68.00 |
Over a year that is about $3,500 for one case. Two caregivers means two people to recruit, and some clients will pay more for one consistent face. Put that choice in the service agreement. See home care overtime rules for the regular-rate math when bonuses and travel pay are involved, and the overtime calculator.
Do states add daily overtime?
Some do. California, Alaska, Nevada and Colorado have daily overtime thresholds, and several states have separate rules for domestic workers and personal attendants. Those apply on top of the federal weekly rule. See daily overtime for caregivers.
How Caregiver Scheduling handles this
Every visit has verified GPS check-in and check-out times. Timesheets that flag caregivers over 40 hours, with travel included and overtime carried separately in the QuickBooks export, are coming soon. $199/month for up to 10 caregivers or $299/month for up to 50, free for 30 days.
FAQ
Do companion caregivers employed by an agency get overtime? Yes. Since 2015, agencies cannot claim the companionship exemption for anyone.
Do live-in caregivers get overtime? Yes, if an agency employs them. Only a household employing the caregiver directly can use the live-in exemption.
Did the 2025 DOL proposal end overtime for home care? No. It is a proposal. Until a final rule is published and takes effect, agencies must pay overtime, and state laws apply regardless.
Can I pay a flat daily rate to avoid overtime? No. A day rate is legal, but you still have to track hours and pay overtime on the regular rate it works out to.
This article is general information, not legal advice. Check your state’s wage and hour rules and watch the federal rulemaking.