Home Care Overtime Rules: What Agencies Owe Caregivers
Since 2015, home care agencies must pay caregivers overtime after 40 hours in a workweek. How the rule works, what counts as hours worked, and which states add daily overtime.
By Caregiver Scheduling Team ·
Home care agencies must pay caregivers at least minimum wage and time-and-a-half for every hour over 40 in a workweek. The U.S. Department of Labor’s Home Care Rule took effect January 1, 2015, and removed third-party employers’ access to the companionship and live-in exemptions. If your agency employs the caregiver, the exemption doesn’t apply to you, even when the client could have claimed it. On July 2, 2025, the Department of Labor proposed returning to the 1975 rules, which would let agencies claim the exemptions again (Federal Register). As of November 2026 no final rule has been published, so the 2015 rule still applies. The Department did tell its investigators in July 2025 to stop enforcing it against agencies (Field Assistance Bulletin 2025-4), but that does not stop caregivers from suing for back overtime, and many states require overtime under their own laws. Keep paying it.
Who still qualifies for the companionship exemption?
Only the individual, family or household that employs the caregiver directly, and only for true companionship services: fellowship and protection, with care tasks limited to 20% of hours worked each week. Agencies, registries that act as employers, and franchise locations cannot claim it (29 CFR 552.109). For an agency, every caregiver is overtime-eligible.
How is the 40 hours counted?
Overtime is calculated per workweek: a fixed, recurring 168-hour period that you choose, for example Sunday 12:00 a.m. to Saturday 11:59 p.m. Three rules catch agencies out:
- All clients add up. Thirty hours with Mrs. Lee and fifteen with Mr. Ortiz is 45 hours, and five of them are overtime.
- Travel between clients counts. Driving from one client’s home to the next during the workday is hours worked (29 CFR 785.38). See travel time pay.
- Training and meetings count. Required in-services, orientation and mandatory staff meetings are hours worked.
You can’t average two weeks. A caregiver who works 50 hours one week and 30 the next is owed 10 hours of overtime, even though the two-week total is 80.
What is the “regular rate”?
Overtime is 1.5 times the regular rate, not the base wage. The regular rate includes shift differentials, non-discretionary bonuses (attendance, retention, shift-pickup bonuses) and pay for travel time. When a caregiver earns different rates in one week, for example $18 for visits and $15 for travel, the regular rate is the weighted average of all straight-time pay divided by all hours.
| Item | Hours | Rate | Pay |
|---|---|---|---|
| Visit hours | 40 | $18.00 | $720.00 |
| Travel hours | 4 | $15.00 | $60.00 |
| Weekend differential | 8 | $2.00 | $16.00 |
| Straight-time total | 44 | $796.00 | |
| Regular rate | $796 ÷ 44 | $18.09 | |
| Overtime premium | 4 | $18.09 × 0.5 | $36.18 |
| Total owed | $832.18 |
Which states add daily overtime?
Some states require overtime after a set number of hours in a day, on top of the federal weekly rule. The best-known are California (over 8 hours in a workday), Alaska (over 8 hours a day), Nevada (over 8 hours in a 24-hour period for employees paid under 1.5 times the state minimum wage) and Colorado (over 12 hours in a workday). Several states also have their own rules for domestic or personal-attendant workers. Check your state labor department, or the state page in our overtime tool, before setting a schedule pattern.
What about live-in and 24-hour shifts?
Live-in caregivers employed by an agency are owed overtime too. You can exclude some sleep and meal time from hours worked only under specific conditions and with a written agreement. See live-in caregiver pay and the 24-hour rule.
How to keep overtime from eating your margin
- Set an hours cap per caregiver and see it while you schedule, not on payroll day.
- Schedule travel into the week. A caregiver at 38 visit hours with 3 hours of drive time is already in overtime.
- Bill for overtime the client causes. If a family asks for one caregiver for 50 hours a week, put a higher rate for the hours over 40 in the service agreement.
- Build pairs for 24/7 cases. Two or three caregivers splitting a client costs less than one caregiver at 60+ hours.
How Caregiver Scheduling handles this
Every visit, across all of a caregiver’s clients, sits on one calendar with verified check-in and check-out times, so you can see a caregiver’s week while you schedule instead of on payroll day. Timesheets with weekly overtime calculated from those verified times, and QuickBooks export for payroll, are coming soon. $199/month for up to 10 caregivers or $299/month for up to 50.
FAQ
Do home care agencies have to pay overtime? Yes. Since 2015, third-party employers can’t use the companionship or live-in exemptions, so agency caregivers get overtime after 40 hours in a workweek.
Can caregivers waive overtime? No. Overtime under the FLSA can’t be waived by agreement, even if the caregiver asks.
Is overtime owed if the caregiver works for two different clients? Yes. Hours for every client the agency assigns are added together.
Can I pay a flat daily rate instead of hourly? You can pay a day rate, but you still have to track hours, meet minimum wage and pay overtime on the regular rate the day rate produces.
This article is general information, not legal advice. State laws vary; check your state labor department or an employment attorney.