Earlier this month, the U.S. Department of Labor proposed regulations that would substantially reduce overtime obligations for home care and related employers. The rule would repeal DOL regulations from 2013 that limited the use of a Fair Labor Standards Act exemption applicable to domestic workers and those who provide companionship services. Prior to 2013, companionship services could include dressing, feeding, and similar personal care activities, as long as general household work did not exceed 20% of the workweek.

The 2013 rules limited the exemption by focusing on the amount of time providing companionship services rather than household work. Employers could no longer use the exemption for workers who spent more than 20% of their workweek providing any personal care or household services other than direct companionship. The current DOL proposal would revert to the broader pre-2013 definition of the companionship exemption. The rule would also eliminate the current ban on third-party employers (such as home care agencies) from claiming the companionship exemption regardless of type of services provided. DOL said the intent of the FLSA exemption goes beyond providing mere fellowship as part of the employees’ services.

If finalized, these changes would significantly expand home care companies’ options for structuring employee compensation. In supporting the proposed regulations, industry groups said that the changes will allow them to provide an expanded range of services while lowering costs. DOL is accepting comments on the proposal through September 2, 2025.

For more information, please contact me or your regular Parker Poe contact. Click here to subscribe to our latest alerts and insights.