What home care worker overtime rules changed, and what to pay now?

What to take away

What changed under federal FLSA overtime

The 2015 US Department of Labor rule narrowed two domestic worker exemptions. It took effect on January 1, 2015, after a district court blocked it and a federal appeals court upheld it. The 40 hour weekly threshold has not changed since.

A third-party home care agency can no longer claim the companionship services exemption or the live-in domestic service exemption for its workers. Under current federal law, caregivers who provide personal care or home health services through an agency are entitled to overtime after 40 hours in a workweek.

A plain summary of the US overtime framework is available from Wikipedia.

Companionship exemption now applies only if the household employs the worker directly and duties are limited to fellowship and protection.

A live-in worker employed directly by a family may still be exempt from federal overtime, but not minimum wage. Many agencies miss that a state can set daily overtime even when the federal rule does not.

Employers must still check the worker's actual duties, not the job title. The companionship exemption does not cover medically related services. A caregiver who provides hands-on personal care or medication management cannot be treated as companionship exempt.

Agencies updating onboarding can fold these state rules in with the home care agency hire must learn checklist.

State overtime rules to check first

The table is illustrative, not exhaustive. A state not listed runs on the federal 40 hour baseline unless its own law sets a different threshold.

The Bureau of Labor Statistics tracks home health and personal care aides employment and wage data. That data helps an agency size the payroll exposure when a state rule changes. State rules matter because most overtime violations are found at the state level first.

What to pay now starts with one formula. Overtime is 1.5 times the regular rate for each hour above the threshold, and the regular rate is total straight time pay for the week divided by hours worked. Nondiscretionary bonuses and shift differentials raise the regular rate.

Typical agency pay for home care aides runs roughly $15.00 to $22.00 an hour depending on the market, and the federal minimum wage has stayed at $7.25 an hour since 2009.

Take an aide at $20.00 an hour who works 45 hours: the week costs $800.00 for the first 40 hours plus $150.00 for 5 overtime hours, or $950.00.

California's daily overtime is the most common place owners get confused. A personal attendant who works two 10-hour days and one 5-hour day will earn overtime for the extra hour on each 10-hour day, even though the weekly total is only 25 hours. New York and Washington use a weekly threshold, but they still add notice and recordkeeping rules.

How federal, state, city, and contract rules stack

Even in states without daily overtime, a city like Seattle or New York City can impose a domestic worker ordinance that changes scheduling and pay notice requirements. Private union contracts or individual employment agreements can set a lower overtime threshold, such as overtime after 35 hours.

Those private terms do not cancel the public rules; they add to them. This stacking creates the distinction between federal, state, municipal, and private layers.

Seattle's ordinance can require paid rest breaks that add to compensable time, and New York City's domestic worker law can require a written notice of rights. Those local rules do not change federal overtime calculation, but they change which hours count as worked.

A home care agency referral habit helps owners plan staffing around local overtime limits.

What documents prove your overtime classification

These are the documents a wage claim or DOL audit application will request. Missing time records often means the agency loses the dispute by default. Do not wait for a complaint to assemble them.

Payroll summaries must match the signed time records, and a mismatch usually draws a request for more documents. Keep these records for at least three years because federal back wage claims can reach back that far.

State agencies may use a different retention period, so check the strictest rule that applies to your workers. A written live-in agreement must state the sleep time and meal period terms; otherwise the employer cannot claim live-in treatment.

A small time record gap can grow because the DOL applies the economic realities test to the whole classification, as the home care agency complaint handling guide shows.

What happens if you skip overtime obligations

Skipping overtime is not a paperwork risk; it is a wage liability. The DOL can recover unpaid overtime for two years, and for three years if it finds a willful violation. It can also add liquidated damages equal to the unpaid overtime. A state labor commissioner can impose daily penalties while a violation continues.

In practice, one misclassified caregiver with 10 hours of weekly overtime can trigger back wages across the entire staff. At a $20.00 regular rate, those 10 hours cost $300.00 a week, near $15,600.00 over a year for that worker alone.

State agencies in California can issue citations for each underpaid worker. The same logic applies to state daily overtime claims: the California Labor Commissioner can order back pay for each affected pay period separately, which multiplies the exposure for agencies with many part-time caregivers. That is the concrete reason to run a payroll audit now.

A spot check of home care agency work includes time record review.

Common questions