Overtime for home care workers: the Home Care Rule, travel time and blended rates

For decades, many home care workers in the US were treated as exempt from federal minimum wage and overtime under the "companionship services" exemption. That changed for most agencies in 2015. Today, overtime is one of the biggest payroll costs for home care agencies, and one of the easiest to get wrong, because caregivers often work for several clients at different rates and drive between them.

This guide explains the rule in plain words, which travel time counts, how to work out overtime when there are several pay rates, and how to keep overtime under control. It is general information: federal rules are a floor, many states go further, and the rules are under review. Check with the US Department of Labor, your state labor office and an employment lawyer.

The Home Care Rule

The Department of Labor's Home Care Rule, published in 2013 and in effect from 2015 after court challenges, narrowed two exemptions in the Fair Labor Standards Act (FLSA):

• Third-party employers, such as home care agencies and staffing companies, can no longer claim the companionship services exemption or the live-in domestic service overtime exemption. Their direct care workers are generally owed at least the federal minimum wage and overtime at one and a half times the regular rate for hours over 40 in a workweek.
• Companionship was redefined narrowly. A worker who spends more than 20% of their hours in a week on care tasks such as bathing, dressing and feeding generally does not qualify, even for an individual or family employer.

In 2025 the Department of Labor proposed to bring back the exemptions for third-party employers. Proposals can change or be withdrawn, and many states have their own overtime laws for home care workers regardless of the federal rule. Check the current status before you change any pay practice.

What counts as hours worked

Overtime is calculated on hours worked, and in home care that includes more than time in the client's home.

Travel between clients: usually work time

When a caregiver drives from one client to another during the workday, that travel is generally hours worked under the FLSA. It counts toward the 40 hours and must be paid. Agencies can pay travel at a different rate from care time, as long as the week's pay still meets minimum wage and overtime is calculated correctly.

Home to the first client: usually not

Ordinary commuting from home to the first client and from the last client home is generally not work time. That changes if the worker has to stop at the office first, picks up supplies, or the trip is unusually long; ask your adviser.

Waiting between visits

A gap between visits is work time if the worker cannot use it effectively for their own purposes. A 15-minute wait is usually work time; a 3-hour break the worker spends at home usually is not. The free travel time and mileage pay calculator separates drive time, waiting and commute.

Other time

Required training, meetings, and time spent on paperwork or calls for the agency are generally work time too. Live-in workers and sleep time have special rules; get advice before you exclude any hours.

Several pay rates in one week: the blended rate

Caregivers often earn different rates for different clients or services. When a worker earns two or more rates in a week, the FLSA's default method uses a weighted average, often called the blended rate:

1. Add up straight-time pay: every hour at its own rate, including travel.
2. Divide by total hours worked. That is the regular rate.
3. For each overtime hour, add half the regular rate. Straight-time pay already paid the full rate once.

Example

A caregiver works 30 hours of personal care at $18.00 and 16 hours of companion care at $15.00 in a week, 46 hours in total.

Straight-time pay	30 x $18.00 + 16 x $15.00 = $780.00
Regular rate	$780.00 / 46 = $16.9565 (about $16.96)
Overtime hours	46 - 40 = 6
Overtime premium	6 x 0.5 x $16.9565 = $50.87
Gross pay	$830.87

Paying overtime at the lower $15.00 rate would underpay; paying at $18.00 would overpay. Some employers may use the rate for the work actually done in the overtime hours instead, but only under conditions set out in the regulations, usually including an agreement made before the work. Check before you use it.

Bonuses, shift differentials and most incentive payments are generally included in the regular rate too. Mileage reimbursement at a reasonable rate is generally not. Try your own week with the free overtime and blended rate calculator.

State rules

Federal law is the floor. Some states have a higher minimum wage, daily overtime (for example after 8 hours in a day), double time, seventh-day rules, special rules for domestic workers, or caps on caregiver hours for publicly funded programs. A few states set their own home care pay floors. Check your state labor office and, for Medicaid programs, your state's rules on overtime in consumer-directed or agency care.

Keeping overtime under control

• See hours while you schedule. The cheapest overtime is the shift you never booked. Show each worker's weekly hours, including travel, at the moment you assign a visit.
• Count travel in the plan. A worker scheduled for 38 hours of visits with 4 hours of driving is at 42 hours.
• Watch client clusters. Grouping clients by area cuts paid travel time and mileage.
• Price it in. If a client needs care that cannot be covered without overtime, include it in the private-pay rate. The margin calculator shows what a share of overtime does to your margin.
• Pay from verified time. Payroll built from verified clock in and out, with approved corrections, avoids both underpaying and paying for hours not worked.

Records to keep

The FLSA requires employers to keep accurate records of hours worked each day and week, pay rates, and overtime pay. In practice that means the verified visits, travel time, any edits with a reason, and the payroll calculation. Signed timesheets help settle questions early. Keep records for at least the periods your federal and state rules require.