Potential Changes to Home Healthcare Third-Party Providers Overtime Obligations

The U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) recently issued a proposed rule that would substantially reduce overtime obligations for third-party home healthcare providers. The proposed rule would repeal DOL regulations from 2013 and allow such providers to rely on the domestic service exemption that existed under the Fair Labor Standards Act (FLSA) implementing regulations issued before 2013. The proposed rule would further expand the definition of “companionship services” to include the provision of fellowship, protection, and care, essentially reverting to the broader pre-2013 definition of the companionship exemption. Prior to 2013, companionship services could include dressing, feeding, and similar personal care activities.

If finalized, these changes, among others that are part of the proposed rule, would expand home care employers’ options for structuring employee compensation and reduce overtime obligations. Those in the industry suggest that the changes will allow them to provide an expanded range of services while simultaneously lowering costs.

The rule is not yet final, and the DOL is accepting comments on the same through September 2, 2025. In the meantime, WHD investigators must “immediately discontinue enforcement of the 2013 final rule, including open cases,” meaning WHD investigators may not further investigate or enforce the 2013 final rule against third-party employers (including home care agencies) that rely on the domestic services exemption. Additionally, WHD investigators are, for the time being, to include in “exempt ‘companionship services’” “the provision of fellowship, protection, and care.”

For more information, please contact a member of the Labor and Employment Team at Barrett McNagny listed below.