Where do caregiver overtime rules stand right now?
The short answer is that the federal rules are in flux. The Department of Labor has proposed reinstating the companionship services exemption for third-party employers like home care agencies. Enforcement of the 2015 rule that eliminated this exemption has been suspended while the proposal moves forward. But the change is not final, and private lawsuits under the current law can still proceed even while enforcement is paused.
What makes this complicated is that many states have their own overtime requirements for caregivers. California, New York, Massachusetts, and others require overtime for home care workers under state law regardless of what happens at the federal level. If your state mandates overtime, you pay overtime no matter what the DOL decides. Federal rules set the floor, not the ceiling.
For home care agencies trying to plan around this uncertainty, the practical approach is to budget and run payroll as if overtime applies. If the exemption comes back and your state allows it, you will see some cost relief. If the exemption does not materialize or your state requires overtime anyway, you are already paying correctly. The risk of underpaying and facing back wages, penalties, and legal fees is much higher than the cost of paying overtime now.
This is where clean books matter. Labor cost is the biggest line item in this business, and you need to see overtime broken out clearly rather than lumped into a general wages figure. When you evaluate profitability by client or decide whether to adjust rates, you need the real numbers. Medical practice accounting built for this industry keeps those figures visible so you can make decisions based on actual costs, not approximations.
The rules I have described here should be verified with current sources. Talk to an employment attorney about your state’s specific requirements before changing how you pay caregivers. Hunter Green CPA handles the bookkeeping and keeps your labor costs accurate in the books, but we do not provide legal advice on employment matters.
If you want to make sure your books are showing the true cost of caregiver labor, reach out to book a consultation.
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