In recent years, home healthcare agencies have faced a growing number of class and collective action lawsuits alleging failure to pay overtime. In response, some employers have attempted to claim the companionship exemption to the Fair Labor Standards Act’s overtime and minimum wage mandates. The companionship exemption applies to workers whose primary duties involve non-medical services such as safety monitoring and light household duties. In 2013, the Department of Labor adopted regulations barring third-party employers from claiming the companionship exemption.

Last week, the Sixth Circuit Court of Appeals upheld these rules, rejecting a claim from a home health agency that DOL did not have the discretion to limit the application of the companionship exemption. In DOL v. Americare Healthcare Services, the employer argued that the Supreme Court’s elimination of Chevron deference in 2024 essentially overruled earlier cases upon which the DOL exemption is based.

The Sixth Circuit rejected these arguments, noting that the Supreme Court said that elimination of Chevron deference did not invalidate earlier case law based on that framework. In addition, the FLSA’s statutory language clearly instructs DOL to determine the extent and applicability of the companionship exemption.

Last year, the Trump administration issued a proposed rule that would rescind the 2013 exclusion on third-party employers claiming the companionship exemption. If finalized, this change would not directly affect pending litigation, but could provide home healthcare agencies with a plausible exemption claim for some employees going forward.

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