The Companionship Exemption Rule Is Nearing Final: What Home Care Agencies Should Know

The Department of Labor's companionship exemption rule is moving toward the finish line. The federal regulatory agenda now lists the rule at the final rule stage with a November 2026 target, and McKnight's Home Care reported on Oct. 16 that employment attorneys expect it to be finalized next month with a 60-day effective date, which would put it in force around January 2027. For personal care and companion care agencies, this is one of the biggest wage-and-hour changes in more than a decade, and it is worth understanding before it lands.

What the companionship exemption rule would change

The proposal, first published in July 2025, would rescind the 2013 rule that barred third-party employers such as home care agencies from claiming the federal companionship and live-in exemptions. If finalized as proposed, workers who provide companionship services (fellowship, care and protection, including household tasks such as cooking, laundry or bed-making) and live-in domestic service employees could again be exempt from federal minimum wage and overtime requirements when employed by an agency. The proposal also drops the 2013 limit on how much hands-on care an exempt companion can provide. In effect, it returns federal policy to roughly where it stood from 1975 to 2013.

What it does not change, at least not yet

The rule is not final. The Wage and Hour Division suspended enforcement of the 2013 rule in July 2025 through a field bulletin, but attorneys speaking at the Home Care Association of America conference were clear that agencies should keep paying overtime until a final rule actually takes effect. State law matters too. Several states, including California, Pennsylvania, Oregon, New Mexico and Montana, have their own minimum wage and overtime protections that would continue to apply regardless of the federal change. Litigation is also likely, with labor groups already signaling opposition, so a final rule could face court challenges before it settles.

How agencies can prepare without jumping early

The practical move now is preparation, not policy changes. Talk with employment counsel about how a final rule would interact with your state's wage laws. Review which of your services would realistically qualify as companionship versus skilled or personal care, since the line between them will matter. And look at whether your records can show what a caregiver actually did on each visit, not just how long they were there. If the federal rules shift, clean and consistent visit records will make it far easier to apply the right pay rules and to explain your decisions to a state auditor or a court.

That last point is where tools come in. CareSync® keeps scheduled visits and completed visits side by side, which gives agencies a clear record of what was planned and what was delivered. Whatever the final rule says, the agencies that already know what happens on every visit will have the easiest time adjusting. We will keep watching for the final text and share what changes when it is published.