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Proposed Rule Seeks to Return to Pre-2013 Home Healthcare Exemptions Under FLSA

Strategic Insights

— 2 min read

The proposed rule, issued by the U.S. Department of Labor's Wage and Hour Division on July 2, 2025, seeks to return to the pre-2013 regulatory framework for home healthcare providers under the Fair Labor Standards Act (FLSA). This move would allow third-party home healthcare providers to rely on the domestic service exemption and expand the definition of "companionship services" to include the provision of fellowship, protection, and care. The proposed rule aims to broaden the definition of companionship services to allow third-party employers to claim the exemption for their employees providing such services.

The proposed rule also seeks to suspend enforcement of the 2013 rule, including ongoing and future investigations. Comments on the proposed rule must be received by the DOL by September 2, 2025.

Key Takeaways:

  • The proposed rule seeks to return to the pre-2013 regulatory framework for home healthcare providers under the FLSA, allowing third-party home healthcare providers to rely on the domestic service exemption.
  • The definition of "companionship services" is expanded to include the provision of fellowship, protection, and care, and to allow third-party employers to claim the exemption for their employees providing such services.
  • The proposed rule suspends enforcement of the 2013 rule, including ongoing and future investigations.
  • Comments on the proposed rule must be received by the DOL by September 2, 2025.
  • The proposed rule aims to broaden the definition of companionship services to significantly reduce regulatory burden for consumers and providers of home care services.
  • The DOL estimates that the shortage of qualified workers in the home care industry is due in part to the 2013 rule, which resulted in an 11.6 percent decline in home healthcare aides between 2013 and 2019.
  • The relief provided by the proposed rule may have a significant impact on the home healthcare industry and the millions of home healthcare aides.
  • Healthcare providers who rely on government-funded health insurance may also be affected by the proposed rule.

Statistics:

  • 29 U.S.C. 213(a)(15) provides that any employee employed in "domestic service" or who "provide[s] companionship services for individuals" is exempt from the minimum wage and overtime requirements of the FLSA.
  • From 1974 to 2013, employees performing companionship services via third-party home healthcare employers were exempt under the FLSA as regulated by the DOL's then-regulations.
  • The 2013 rule resulted in increased costs for home care providers with additional recruiting, hiring, and training.
  • The 2013 rule also led to an 11.6 percent decline in home healthcare aides between 2013 and 2019.
  • The proposed rule aims to restore the pre-2013 regulatory framework, which may help to expand access to home care services.

Sources:

  • U.S. Department of Labor, Wage and Hour Division, Proposed Rule, July 2, 2025.
  • 29 U.S.C. 213(a)(15).
  • Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007).
  • Loper Bright Enterprises v. Raimondo, 142 S.Ct. 2182 (2022).

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