On Monday, the U.S. Department of Labor (DOL) proposed reinstating the companionship exemption, which covers certain home care workers under specific parts of the Fair Labor Standards Act (FLSA).

If finalized, workers who provide companionship services would be exempt from federal minimum wage and overtime rules. Live-in domestic service employees would also be exempt from overtime requirements, according to a draft of the rule.

The DOL defines “companionship services” as fellowship, care and protection, including household tasks such as cooking and light housework, according to the Home Care Association of America (HCAOA).

“This is amazing news for the home care industry,” HCAOA CEO Jason Lee said in a statement. “HCAOA’s advocacy played a significant role in getting this exemption reinstated, as our numerous meetings with members of the White House, the U.S. Department of Labor, the U.S. Small Business Administration and Congress seem to have paid off.”

On May 9, HCAOA submitted a letter to Russell Vought, the White House Office of Management and Budget director, urging the administration to review and recommend the reinstatement of the federal companionship exemption, stating that “while well-intentioned, the elimination of this exemption had profound negative consequences for access to care.”

Originally established by Congress in 1974 under the FLSA, this exemption excluded certain home care workers providing companionship services from minimum wage and overtime protections. In 2013, the DOL updated regulations to limit this exemption, more precisely defining these services and preventing agencies from applying the exemption.

As a result, many private agencies and state Medicaid agencies cut back on companionship services to avoid overtime expenses, HCAOA reported. The DOL believes that reverting to its pre-2013 interpretation of companionship services will benefit providers.

“Many caregivers were willing to forgo overtime pay, knowing the fixed incomes most older adults rely on,” Bob Roth, managing partner at Cypress HomeCare Solutions, said in a LinkedIn post. “This issue isn’t just about labor policy; it’s about consistency and dignity in care.”

Roth added that the impact on the care recipient was the most significant unintended consequence of the DOL’s move to change the companion exemption for third-party employers.

“Seniors want familiar, trusted caregivers, not a revolving door – when a care recipient opens their door to a caregiver, they open their life to them,” he said. “Yet agencies were forced to staff cases with multiple caregivers due to overtime burdens. This proposed rule marks a turning point. It’s not just a win for agencies; it’s a victory for older adults and their families who deserve continuity, stability, and safe, affordable care.”