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Employment Law Update: Home Healthcare Companionship Exemption – Is It Back?

Date: August 14, 2025
Home healthcare employers – take note. The U.S. Department of Labor’s Wage and Hour Division (WHD) issued Field Assistance Bulletin No. 2025-4 on July 25, 2025 (FAB), announcing that it will immediately stop enforcing the 2013 regulations that dramatically restricted use of the Fair Labor Standards Act (FLSA) companionship and live-in domestic service exemptions (the Companionship Exemption). The proposed changes seek to restore the ability of third-party employers like home care agencies to classify caregivers as exempt from the FLSA’s minimum and overtime wage requirements under the companionship and live-in domestic service exemptions.

Background

Congress first extended federal wage-hour protections to “domestic service” employees in 1974 and simultaneously carved out two key exceptions: (1) a complete exemption from minimum wage and overtime for employees providing “companionship services” to individuals who cannot care for themselves, and (2) an overtime-only exemption for “live-in” domestic service workers. The 1975 regulations allowed third-party employers (such as staffing agencies) to rely on both exemptions.

In 2013, the Department of Labor dramatically narrowed those rules. The final rule:
  1. Barred third-party employers from using either exemption, and
  2. Redefined “companionship services” to sharply limit the amount of “care” work an exempt companion could perform.
Those changes took effect in 2015 and have governed WHD enforcement ever since, until now.

What the FAB Does

The new FAB seeks to return the companionship services and live-in exemptions to the 1975 standards. The proposed changes seek to restore the ability of third-party employers, like home care agencies, to classify caregivers as exempt from the FLSA under the companionship and live-in domestic service exemptions. 

The FAB immediately requires:
  1. WHD investigators must immediately discontinue enforcement of the 2013 final rule, including open cases that predate this FAB.
  2. WHD investigators must not investigate or take enforcement action against third-party employers, including home care agencies, that claim the exemption for workers engaged in companionship services under section 13(a)(15) or live-in domestic services under section 13(b)(21) of the FLSA, as applicable.
This FAB is only internal guidance for the WHD personnel and as a notice to the public of WHD’s enforcement position. It does not create any legally enforceable rights or obligations and does not alter any statutory or regulatory requirements.

Home Healthcare Employer Next Steps:
  • If you previously faced enforcement based on the 2013 rule, revisit those cases.
  • Review applicable state law, as it may differ.
  • Keep an eye on future updates — a final rule may shift the landscape again.
  • Review your current pay practices for home care workers to be ready for future expected changes.

Please call your Whiteford employment attorney with any questions about how to prepare.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.