Proposed Rule2025-12316
Application of the Fair Labor Standards Act to Domestic Service
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 2, 2025
Issuing agencies
Labor DepartmentWage and Hour Division
Abstract
In 1974, Congress applied the Fair Labor Standards Act (FLSA) to "domestic service" employees, but exempted employees who provide "companionship services" from the minimum wage and overtime requirements and also exempted live-in domestic service employees from overtime. In 1975, the Department promulgated regulations defining companionship services and permitting third party employers to claim these exemptions. These regulations remained substantially unchanged for nearly 40 years. In 2013, the Department revised the regulations to narrow the definition of companionship services and prevent third party employers from claiming either of the exemptions. Because the Department is concerned that the 2013 regulations might not reflect the best interpretation of the FLSA and might discourage essential companionship services by making these services more expensive, the Department is proposing to return to the 1975 regulations. This summary can be found at https://www.regulations.gov by searching by the RIN: 1235-AA51.
Full Text
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<title>Federal Register, Volume 90 Issue 125 (Wednesday, July 2, 2025)</title>
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[Federal Register Volume 90, Number 125 (Wednesday, July 2, 2025)]
[Proposed Rules]
[Pages 28976-28985]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-12316]
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DEPARTMENT OF LABOR
Wage and Hour Division
29 CFR Part 552
RIN 1235-AA51
Application of the Fair Labor Standards Act to Domestic Service
AGENCY: Wage and Hour Division, Department of Labor.
ACTION: Proposed rule; request for comments.
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SUMMARY: In 1974, Congress applied the Fair Labor Standards Act (FLSA)
to ``domestic service'' employees, but exempted employees who provide
``companionship services'' from the minimum wage and overtime
requirements and also exempted live-in domestic service employees from
overtime. In 1975, the Department promulgated regulations defining
companionship services and permitting third party employers to claim
these exemptions. These regulations remained substantially unchanged
for nearly 40 years. In 2013, the Department revised the regulations to
narrow the definition of companionship services and prevent third party
employers from claiming either of the exemptions. Because the
Department is concerned that the 2013 regulations might not reflect the
best interpretation of the FLSA and might discourage essential
companionship services by making these services more expensive, the
Department is proposing to return to the 1975 regulations. This summary
can be found at <a href="https://www.regulations.gov">https://www.regulations.gov</a> by searching by the RIN:
1235-AA51.
DATES: Comments must be received by September 2, 2025.
ADDRESSES: You may submit comments, identified by Regulatory
Information Number (RIN) 1235-AA51, by either of the following methods:
<bullet> Electronic Comments: Submit comments through the Federal
eRulemaking Portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the
instructions for submitting comments.
<bullet> Mail: Address written submissions to: Division of
Regulations, Legislation, and Interpretation, Wage and Hour Division,
U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW,
Washington, DC 20210.
Instructions: Response to this NPRM is voluntary. The Department
requests that no business proprietary information, copyrighted
information, or personally identifiable information be submitted in
response to this NPRM. Commenters submitting file attachments on
<a href="https://www.regulations.gov">https://www.regulations.gov</a> are advised that uploading text-recognized
documents--i.e., documents in a native file format or documents which
have undergone optical character recognition (OCR)--enable staff at the
Department to more easily search and retrieve specific content included
in your comment for consideration.
Anyone who submits a comment (including duplicate comments) should
understand and expect that the comment, including any personal
information provided, will become a matter of public record and will be
posted without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. The Department
posts comments gathered and submitted by a third-party organization as
a group under a single document ID number on <a href="https://www.regulations.gov">https://www.regulations.gov</a>. All comments must be received by 11:59 p.m. ET on
September 2, 2025, for consideration in this rulemaking; comments
received after the comment period closes will not be considered.
The Department strongly recommends that commenters submit their
comments electronically via <a href="https://www.regulations.gov">https://www.regulations.gov</a> to ensure
timely receipt prior to the close of the comment period. Please submit
only one copy of your comments by only one method.
Docket: Go to the Federal eRulemaking Portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a> for access to the rulemaking docket, including any
background documents and the plain-language summary of the proposed
rule of not more than 100 words in length required by the Providing
Accountability Through Transparency Act of 2023.
FOR FURTHER INFORMATION CONTACT: Daniel Navarrete, Director, Division
of Regulations, Legislation, and Interpretation, Wage and Hour
Division, U.S. Department of Labor, Room S-3502, 200 Constitution
Avenue NW, Washington, DC 20210; telephone: (202) 693-0406 (this is not
a toll-free number). Alternative formats are available upon request by
calling 1-866-487-9243. If you are deaf, hard of hearing, or have a
speech disability, please dial 7-1-1 to access telecommunications relay
services.
Questions of interpretation or enforcement of the agency's existing
regulations may be directed to the nearest WHD district office. Locate
the nearest office by calling the WHD's toll-free help line at (866)
4US-WAGE ((866) 487-9243) between 8 a.m. and 5 p.m. in your local time
zone, or log onto WHD's website at <a href="https://www.dol.gov/agencies/whd/contact/local-offices">https://www.dol.gov/agencies/whd/contact/local-offices</a> for a nationwide listing of WHD district and area
offices.
SUPPLEMENTARY INFORMATION:
I. Background
The FLSA requires that most employees in the United States must be
paid at least the federal minimum wage (currently $7.25 per hour) for
all hours worked and overtime pay at not less than time and one-half
the employee's regular rate of pay for all hours worked over 40 hours
in a workweek.\1\ The FLSA also requires covered employers to ``make,
keep, and preserve'' certain records regarding employees,\2\ though
recordkeeping requirements are relaxed for employees who are exempt
from the Act's wage and hour provisions.\3\
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\1\ See 29 U.S.C. 206(a), 207(a).
\2\ See 29 U.S.C. 211(c).
\3\ See 29 CFR part 516 Subpart B.
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Prior to 1974, the FLSA's minimum wage and overtime compensation
provisions did not apply to domestic service workers unless those
workers were employed by covered enterprises (generally those that had
at least a certain annual dollar threshold in business). In 1974,
Congress amended the FLSA to extend coverage to all domestic service
workers, including those employed by private households or small
companies previously not covered by the Act.\4\ At the same time,
Congress created FLSA exemptions for two categories of domestic service
employees. First, in section 13(a)(15), Congress added an exemption
from the Act's minimum wage and overtime compensation requirements for
``any employee employed on a casual basis in
[[Page 28977]]
domestic service employment to provide babysitting services or any
employee employed in domestic service employment to provide
companionship services for individuals who (because of age or
infirmity) are unable to care for themselves (as such terms are defined
and delimited by regulations of the Secretary).'' \5\ Second, in
section 13(b)(21), Congress added an exemption from the overtime
requirement (but not the minimum wage requirement) for ``any employee
who is employed in domestic service in a household and who resides in
such household.'' \6\ Finally, Congress authorized the Department ``to
prescribe necessary rules, regulations, and orders with regard to the
[1974 FLSA Amendments],'' \7\ and specifically instructed the
Department to ``define and delimit'' the terms ``domestic service
employment'' and ``companionship services.'' \8\
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\4\ See Fair Labor Standards Amendments of 1974, Public Law 93-
259 Sec. 7, 88 Stat. 55, 62 (1974).
\5\ 29 U.S.C. 213(a)(15).
\6\ 29 U.S.C. 213(b)(21).
\7\ Public Law 93-259 Sec. 29(b), 88 Stat. 76.
\8\ 29 U.S.C. 213(a)(15).
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In 1975, the Department promulgated regulations applying the FLSA
to domestic service employment at 29 CFR part 552, including provisions
addressing the companionship and live-in domestic service employee
exemptions.\9\ These regulations defined companionship services as
``fellowship, care, and protection for a person who . . . cannot care
for his or her own needs,'' which included ``household work related to
the person's care such as meal preparation, bed making, washing of
clothes, and other similar services'' and could include other general
household work not exceeding ``20 percent of the total weekly hours
worked.'' \10\ Additionally, the 1975 regulations permitted third party
employers, or employers of home care workers other than the individuals
receiving care or their families or households, to claim both the
companionship services and live-in domestic service employee
exemptions.\11\
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\9\ See 40 FR 7404 (Feb. 20, 1975).
\10\ 40 FR 7405 (codified at 29 CFR 552.6).
\11\ 40 FR 7407 (codified at 29 CFR 552.109).
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These regulations remained substantially unchanged for almost 40
years. In 2007, the Supreme Court issued a unanimous decision affirming
the validity of the third-party employer provision at 29 CFR 522.109
(1975), holding in relevant part that neither the statute nor the
legislative history provides a definitive answer as to whether third-
party employers may avail themselves of these exemptions and that the
third-party employer regulation fell within the Department's broad
scope of delegated rulemaking authority.\12\
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\12\ See Long Island Care at Home, LTD., v. Coke, 551 U.S. 158
(2007).
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In 2013, the Department published a final rule that revised its
companionship services and live-in employee regulations.\13\ Among
other changes, the 2013 rule significantly narrowed the scope of the
exemptions in two ways.
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\13\ See 78 FR 60454 (Oct. 1, 2013).
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First, the 2013 rule altered the definition of exempt
``companionship services'' to include the provision of ``fellowship''
(such as social, physical, and mental activities), ``protection''
(meaning to be present with the person to monitor their well-being),
and ``care'' (meaning assisting with activities of daily living, such
as dressing, grooming, feeding, bathing, toileting, and transferring,
and instrumental activities of daily living, such as meal preparation,
light housework, managing finances, assistance with daily taking of
medications, and arranging medical care), but only if such ``care''
does not exceed 20 percent of the total hours worked per person and per
workweek.\14\ These changes significantly reduced the scope of
permissible job duties for exempt companion workers; whereas under the
1975 rule an exempt companion could engage in limitless care activities
and the 20 percent limitation applied only to ``general household
work,'' under the 2013 rule a worker subject to the exemption could
only engage in ``the provision of care'' for a maximum of 20 percent of
their weekly worktime. To justify these changes, the Department
reasoned that ``companionship'' should be primarily focused on the
provision of fellowship and protection, with a limited allowance for
care, because dictionary definitions of the term ``companionship''
generally do not contemplate care, and because the legislative history
included descriptions of exempt companions to ``someone to be there and
watch an older person,'' or ``elder sitter.'' \15\ The preamble to the
2013 rule further asserted that allowing for a 20 percent limitation on
care achieved Congressional intent that an exempt companion's primary
purpose should be watching over the individuals receiving services,
while also recognizing a limited allowance for selected tasks as a
matter of practicality.\16\
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\14\ See 29 CFR 552.6; see also 78 FR 60463-73 (explaining the
changes).
\15\ See 78 FR 60464 (citing 119 Cong. Reg. S24773, S24801
(daily ed. July 19, 1973) and Webster's New World Dictionary, p. 288
(2d College Ed. 1972)).
\16\ See 78 FR 60457.
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Second, the 2013 rule precluded any third party employers (like
home care agencies) from claiming the exemption for companionship
services or live-in domestic service employees.\17\ Here, the
Department reasoned that its interpretation under the 1975 rule
improperly ignored the Congressional intent of the 1974 Amendments,
which was to extend minimum wage and overtime protections to direct
care workers engaged in this work as a vocation, as opposed to on a
casual basis, and that workers employed by a third-party agency were
not employed on a casual basis.\18\
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\17\ See 29 CFR 552.109.
\18\ See 78 FR 60482.
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Following the promulgation of the 2013 rule, associations
representing third-party home care agencies sued the Department,
asserting that the rule misinterpreted the FLSA and violated the
Administrative Procedure Act. The United States District Court for the
District of Columbia initially enjoined and subsequently vacated the
2013 rule's revisions to 29 CFR 552.6 (defining companionship) and 29
CFR 552.109 (prohibiting third-party employers from claiming the
exemptions).\19\ In its orders, the court asserted that these
provisions contravened statutory intent, characterizing the 2013 rule
as an attempt to ``redefin[e] a 40-year-old exemption out of
existence.'' \20\ The Department appealed to the United States Court of
Appeals, District of Columbia Circuit, which reversed the District
Court's vacaturs on August 21, 2015, concluding that the 2013 Rule was
a valid exercise of the Department's delegated rulemaking authority to
interpret the section 13(a)(15) and 13(b)(21) exemptions under Chevron
deference.\21\
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\19\ See Home Care Association of America v. Weil, 76 F.Supp.3d
138 (D.D.C 2014); see also Home Care Association of America v. Weil,
78 F.Supp.3d 123 (D.D.C. 2015).
\20\ 78 F.Supp.3d at 130.
\21\ See Home Care Association of America v. Weil, 799 F.3d
1084, 1090-96 (D.C. Cir. 2015).
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The 2013 rule became effective on October 13, 2015, when the D.C.
Circuit issued the mandate for its decision upholding the rule. The
Department began enforcing the rule on November 12, 2015.
II. Discussion
The Department proposes to rescind the 2013 rule in its entirety
and return to the 1975 regulations which were promulgated soon after
the amendments
[[Page 28978]]
to the FLSA and were in place for nearly 40 years. The Department has
reviewed the 2013 regulations and now questions whether the 1975
regulations better comport with the statute and Congress's intent to
exempt home care employees from FLSA coverage. Returning to the 1975
regulations would also significantly reduce regulatory burden for the
consumers and providers of home care services, which in turn could help
to expand access to home care services. The Department welcomes comment
on these preliminary assessments. While the discussion below focuses on
the two major proposed changes to 29 CFR 552.6 and 29 CFR 552.109,
returning to the 1975 regulations would result in other changes to 29
CFR part 552, such as 29 CFR 552.109 concerning live-in domestic
service employees. The Department invites comment on the proposal to
return to the 1975 regulations in their entirety.
A. Restoring the Ability of Third-Party Employers To Claim the Section
13(a)(15) ``Companionship Services'' Exemption and Section 13(b)(21)
Exemption for ``Live-In'' Domestic Service Workers
The Department is proposing to return to 1975 regulations'
application of the companionship services and live-in domestic service
employee exemptions to third party employers. As noted earlier, section
13(a)(15) exempts from minimum wage and overtime requirements ``any
employee employed in domestic service employment to provide
companionship services for individuals who (because of age or
infirmity) are unable to care for themselves (as such terms are defined
and delimited by regulations of the Secretary),'' while section 13(b)
exempts from the overtime compensation requirements ``any employee who
is employed in domestic service in a household and who resides in such
household.'' \22\ These statutory provisions do not explicitly or
implicitly exclude third party employers of employees engaged in
companionship services or live-in domestic service from the exemptions.
While other FLSA exemptions specify employer-related exemption
criteria,\23\ nothing in the statutory language exempting companion
workers and live-in domestic service employees suggests that third
party employers are treated differently from other employers. The
Department is considering whether the best interpretation of this
language is that if Congress intended to narrow the exemption, it would
have said so explicitly, as it has done for many other categories in
the FLSA. For example, babysitters are exempt from minimum wage and
overtime, but only if they are ``employed on a casual basis.'' \24\
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\22\ See 29 U.S.C. 213(a)(15), 213(b)(21).
\23\ See, e.g., 29 U.S.C. 13(a)(6) (exempting ``any employee
employed in agriculture'' if, among other criteria, ``such employee
is employed by an employer who did not, during any calendar quarter
during the preceding calendar year, use more than five hundred man-
days of agricultural labor''); id. at 13(b)(9) (exempting ``any
employee employed as an announcer, news editor, or chief engineer by
a radio or television station the major studio of which is located
[in a low-population area]''); see also 29 U.S.C. 213(a)(1)
(providing a special tolerance for the performance of nonexempt work
by exempt executive and administrative employees ``of a retail or
service establishment'').
\24\ See 29 U.S.C. 213(a)(15).
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Permitting third party employers to claim the companionship
services exemption would be consistent with the Department's
contemporaneous understanding of the 1974 FLSA Amendments.\25\ In 1975,
the Department concluded after notice-and-comment rulemaking that the
new exemptions for companions and live-in domestic service workers
should be available to third party employers ``since these exemptions .
. . apply to `any employee' engaged `in' the enumerated services,''
remarking that this interpretation would be ``consistent with the
statutory language and prior practices concerning other similarly
worded exemptions.'' \26\ In 2007, when the U.S. Supreme Court
unanimously upheld the legality of the 1975 Rule's third party employer
provision, the Court concluded that ``more than 30 years later [this
reasoning] remains a reasonable, albeit brief, explanation.'' \27\
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\25\ See Loper Bright Enterprises v. Raimondo, 603 U.S. 369, 386
(2024) (``[T]he contemporaneous construction of those who were
called upon to act under the law, and were appointed to carry its
provisions into effect, is entitled to very great respect.'')
(citations omitted).
\26\ 40 FR 7405.
\27\ Long Island Care at Home, 551 U.S. at 175.
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The Department acknowledges that it adopted a narrower
interpretation of the section 13(a)(15) exemption in the 2013 rule,
which was subsequently upheld by the U.S. Court of Appeals for the D.C.
Circuit in Home Care Association of America v. Weil, 799 F.3d 1084
(D.C. Cir. 2015), cert. denied, 579 U.S. 927 (2016). However, the
Department is considering the effect of a recent Supreme Court
decision, Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), on
the legal foundation that underpinned the Department's 2013 rule and
the D.C. Circuit's subsequent approval of that rule.
In the Loper Bright decision issued last year, the Supreme Court
eliminated ``Chevron deference,'' a doctrine of administrative law
which previously required courts to defer to agency interpretations of
ambiguous statutes so long as such interpretations were
``permissible.'' \28\ Going forward under Loper Bright, the only
``permissible'' interpretation of a statute is the one that courts--and
not federal agencies--determine is the ``best reading'' of the
statute.\29\ Some employers have argued that because of Loper Bright,
the 2013 rule's third party employer provision is no longer valid. The
Department has thus far taken the position in litigation that the 2013
rule is still valid despite the 2024 Loper Bright decision, but is now
taking a fresh look at arguments to the contrary.
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\28\ Chevron, U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837, 843 (1984).
\29\ Loper Bright, 603 U.S. at 400.
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In sum, the Department seeks to determine whether, with respect to
third party employers, its original interpretation of the section
13(a)(15) and 13(b)(21) exemptions is the better reading of the FLSA's
statutory text. The Department welcomes comment on this issue.
B. Limits on the Provision of Care by Exempt Companion Workers
As with third party employment, the Department is considering
whether to restore the definition of ``companionship services''
reflected in the Department's pre-2013 regulations. Among other
changes, the 2013 rule changed the definition from ``fellowship, care,
and protection'' to ``fellowship and protection.'' \30\ The 2013
regulations permit some ``care,'' but only up to 20 percent of the
total hours worked.\31\ While the 1975 regulations wholly included
``household work related to the person's care . . . such as meal
preparation, bed making, washing of clothes,'' the 2013 regulations
limited the time that could be spent on such services.
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\30\ 29 CFR 552.6(a).
\31\ 29 CFR 552.6(b).
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The statutory exemption applies to work done for those people who
``are unable to care for themselves.'' \32\ By definition, these people
need ``care,'' not just fellowship and protection. Thus, basic meal
preparation, bed making, and washing of clothes is an important part of
companionship services. The Department has tentatively determined that
the 1975 regulations more sensibly restricted the companionship
services exemption to ``those services which provide fellowship, care,
and protection.'' \33\ ``Indeed, what services could possibly
[[Page 28979]]
be required more by those `unable to care for themselves' than care
itself?'' \34\ While the 1975 companionship services exemption did not
include care provided by ``trained personnel such as nurses,'' the
Department is considering whether the exemption should once again apply
to ``household work related to the care of the aged or infirm person
such as meal preparation, bed making, washing of clothes, and other
similar services.'' \35\
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\32\ 29 U.S.C. 213(a)(15).
\33\ 40 FR 7405 (codified at 29 CFR 552.6).
\34\ Home Care Association of America, 78 F.Supp.3d at 128,
rev'd on other grounds, 799 F.3d 1084.
\35\ Id.
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In the 2013 rule, the Department justified its limitation of care-
related duties by analogizing exempt companions to babysitters, citing
to remarks in the legislative history of the 1974 FLSA Amendments which
described the role of an exempt companion to include passive activities
such as ``sit[ting]'' and ``watch[ing].'' \36\ The Department is
reevaluating these arguments, cognizant that the Department's
regulations have always recognized that fellowship and protection are
elements of exempt companionship services. More fundamentally,
``[b]abysitters provide care--assistance with activities of daily
living and instrumental activities of daily living--to the extent the
children they are watching are unable to care for themselves.'' \37\
For example, babysitters are often responsible for feeding, bathing,
and changing the diapers of young children, and often prepare food and
drive children to places they cannot reach on their own.\38\ While the
Department has long advised that ``[t]he term `babysitting services'
does not include services relating to the care . . . of infants or
children which are performed by trained personnel, such as registered,
vocational, or practical nurses,'' \39\ the regulation for casual
babysitters who are exempt under section 13(a)(15) do not otherwise
place any limitation on a babysitter's provision of care. The
Department now believes the regulation for exempt companions should not
be any more restrictive.
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\36\ 78 FR 60464.
\37\ See Home Care Association of America, 78 F.Supp.3d at 129.
\38\ Id.
\39\ 29 CFR 552.4; see also 40 FR 7405 (same).
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Thus, the Department is proposing to restore ``care'' alongside
``fellowship'' and ``protection'' as an example of exempt
``companionship services,'' consistent with its contemporaneous
interpretation of the FLSA as reflected in the 1975 Rule. The
Department welcomes comment on this proposal and the reasoning behind
it.
C. Policy Considerations Germane to the Purpose of the FLSA's Exemption
for Companions and Live-In Domestic Service Employees
As discussed more fully in the regulatory impact analysis in
section III(A) of this notice, the Department has tentatively
determined that the 2013 rule has had negative effects on the ground
which are hindering consumer access to home- and community-based
services. These consequences are contrary to the policy goals that
motivated Congress' decision to include the section 13(a)(15) and
13(b)(15) exemptions in the 1974 FLSA Amendments.\40\
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\40\ The section 13(a)(15) companionship services exemption
originated from the concerns of a Louisiana constituent who wrote
that extending the minimum wage to her elderly mother's paid
companion would make the companion prohibitively expensive and force
the constituent to quit her job and care for her mother herself. See
19 Cong. Rec. 24,797 (1973) (statement of Sen. Dominick); see also
Molly Bilken, Healthcare in the Home: Reexamining the Companionship
Services Exemption to the Fair Labor Standards Act, 35 Colum. Hum.
Rts. L. Rev. 113, 125-26 (2003) (discussing Senate floor debate over
the constituent's letter).
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For example, one study by the U.S. Government Accountability Office
(GAO) found that home care providers and states administering Medicaid-
financed home care programs responded to the 2013 rule by imposing
hours restrictions for home care employees to avoid overtime costs.\41\
GAO elaborated that these policies ``exacerbated'' the challenge for
consumers to obtain home care, with ``a few stakeholders, including
worker and consumer advocacy groups, [reporting] that some consumers
have had to hire additional workers . . . making it particularly
difficult to find enough workers to cover their needs.'' \42\ While
incentivizing employers to spread employment is one of the major policy
goals of the FLSA's overtime requirement,\43\ Congress has enacted
exemptions to the overtime requirement in occupations and industries
where spreading employment is difficult, unnecessary, or otherwise
undesirable, such as the FLSA's section 13(a)(1) exemption for bona
fide professional employees, which includes doctors, lawyers, and
teachers.\44\ As with such professional employees (particularly
teachers), the shortage of qualified workers in the home care industry
\45\ and the paramount importance of trust and continuity between home
care workers and the individuals who they help caution against an
unduly narrow reading of the FLSA's section 13(a)(15) and 13(b)(21)
exemptions.
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\41\ See U.S. Gov't. Accountability Off., GAO-21-72,
Observations on the Effects of the Home Care Rule 8 (October 2020),
<a href="https://www.gao.gov/assets/gao-21-72.pdf">https://www.gao.gov/assets/gao-21-72.pdf</a>.
\42\ Id. at 23.
\43\ See, e.g., Overnight Motor Transportation Co. v. Missel,
316 U.S. 572, 577-78 (1942).
\44\ See 29 U.S.C. 213(a)(1).
\45\ See section III(A)(3), infra.
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As expected, the 2013 rule has resulted in increased costs for home
care providers, such as increased recruiting, hiring, and training
costs.\46\ Additionally, the complicated definitions and reporting
regime introduced by the 2013 rule has been burdensome to
implement.\47\ However, some of the expected benefits of the 2013 rule
have failed to fully materialize. For example, GAO's 2020 report
concluded that hourly wages and weekly earnings for home care workers
``did not significantly increase'' following implementation of the 2013
rule when compared to those in occupations with similar entry
requirements.\48\ The turnover rate for home care workers remains
stubbornly high--nearly 80 percent in 2024,\49\ comparable to the range
of estimates provided in the 2013 rule (spanning 44 to 100
percent).\50\ And although the Department predicted in 2013 that
``guarantee[ing] minimum wage and overtime compensation for home care
jobs . . . will attract more workers to the home care industry,'' \51\
growth in the home care workforce ``slowed'' in the years following the
2013 rule, with ``the number of home care workers per 100 [individuals
receiving home and community-based services] declin[ing] by 11.6
percent between 2013 and 2019.'' \52\ These findings call into question
whether the benefits of the 2013 rule truly exceeded its costs.
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\46\ See GAO 21-72, supra n. 41, at 17.
\47\ Id.; see also Heather Madden, Policy Focus: Free Caregivers
and Repeal the Home Care Rule, Independent Women's Forum 2 (May 1,
2025) (asserting that ``burdensome recordkeeping requirements
discourage many individuals from engaging in [in-home]
caregiving''), <a href="https://www.iwf.org/wp-content/uploads/2025/04/0525PF_The-Home-Care-Rule.pdf">https://www.iwf.org/wp-content/uploads/2025/04/0525PF_The-Home-Care-Rule.pdf</a>.
\48\ GAO 21-72, supra n. 41, at 18-20.
\49\ Joyce Famakinwa, Home Care's Industry-Wide Turnover Rate
Reaches Nearly 80%, Home Healthcare News (July 3, 2024), <a href="https://homehealthcarenews.com/2024/07/home-cares-industry-wide-turnover-rate-reaches-nearly-80/">https://homehealthcarenews.com/2024/07/home-cares-industry-wide-turnover-rate-reaches-nearly-80/</a>.
\50\ See 78 FR 60543.
\51\ 78 FR 60548.
\52\ Amanda R. Kreider & Rachel M. Warner, The Home Care
Workforce Has Not Kept Pace With Growth In Home and Community-Based
Services, Health Affairs, vol. 42, no. 5, p. 650 (May 2023), <a href="https://www.healthaffairs.org/doi/epdf/10.1377/hlthaff.2022.01351">https://www.healthaffairs.org/doi/epdf/10.1377/hlthaff.2022.01351</a>.
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For all of the reasons discussed above, the Department proposes to
amend 29 CFR part 552 by rescinding the 2013
[[Page 28980]]
rule in its entirety and returning to the 1975 regulations. The
Department invites public comment on this proposal and the preliminary
assessments behind it. The Department specifically invites comment on
whether these changes are likely to increase the supply of qualified
home health workers, and whether the proposal is likely to decrease
regulatory burden on home care consumers and providers.
III. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866
Under Executive Order 12866, the Office of Management and Budget's
(OMB) Office of Information and Regulatory Affairs (OIRA) determines
whether a regulatory action is significant and, therefore, subject to
the requirements of the Executive Order and OMB review.\53\ Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as a regulatory action that is likely to result in a rule that
may: (1) have an annual effect on the economy of $100 million or more,
or adversely affect in a material way a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local, or tribal governments or communities (also
referred to as economically significant); (2) create serious
inconsistency or otherwise interfere with an action taken or planned by
another agency; (3) materially alter the budgetary impact of
entitlements, grants, user fees or loan programs or the rights and
obligations of recipients thereof; or (4) raise novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order. OIRA has determined
that this proposed rule is economically significant under section 3(f)
of Executive Order 12866.
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\53\ See 58 FR 51735, 51741 (Oct. 4, 1993).
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Executive Order 13563 directs agencies to, among other things,
propose or adopt a regulation only upon a reasoned determination that
its benefits justify its costs; that it is tailored to impose the least
burden on society, consistent with obtaining the regulatory objectives;
and that, in choosing among alternative regulatory approaches, the
agency has selected those approaches that maximize net benefits.
Executive Order 13563 recognizes that some costs and benefits are
difficult to quantify and provides that, when appropriate and permitted
by law, agencies may consider and discuss qualitatively values that are
difficult or impossible to quantify, including equity, human dignity,
fairness, and distributive impacts.
The analysis provided below outlines the impacts that the
Department anticipates may result from this proposed rule and was
prepared pursuant to the above-mentioned executive orders. This
proposed rule is expected to be an Executive Order 14192 deregulatory
action.
1. Introduction
The Fair Labor Standards Act (FLSA or Act) requires that covered,
nonexempt employees be paid not less than the Federal minimum wage for
all hours worked and overtime pay at one and one-half times the regular
rate of pay for hours worked over 40 in a workweek. However, section
13(a)(15) of the FLSA provides an exemption from the Act's minimum wage
and overtime pay requirements for ``any employee employed in domestic
service employment to provide companionship services for individuals
who (because of age or infirmity) are unable to care for themselves.''
\54\ Similarly, section 13(b)(21) of the FLSA provides an exemption
from the Act's overtime pay requirement--but not its minimum wage
requirement--for live-in domestic service workers, who are defined as
``any employee who is employed in domestic service in a household and
who resides in such household.'' \55\
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\54\ 29 U.S.C. 213(a)(15).
\55\ See 29 U.S.C. 213(b)(21).
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In this rulemaking, the Department proposes to reverse regulatory
changes introduced by the 2013 final rule entitled, ``Application of
the Fair Labor Standards Act to Domestic Service.'' \56\ Specifically,
the Department proposes to restore the ability of third-party employers
(including home care staffing agencies) to claim the FLSA's section
13(a)(15) companionship services exemption and the section 13(b)(21)
exemption for live-in domestic service workers, and to eliminate
limitations on ``the provision of care'' by employees who are exempt
under the companionship services exemption.
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\56\ 78 FR 60454.
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2. Need for Rulemaking
The Department has carefully reviewed the 2013 final rule and is
considering whether its pre-2013 regulations better comport with the
FLSA's statutory language and Congress's intent to exempt home care
employees from FLSA coverage. Returning to the Department's pre-2013
regulations could also significantly reduce regulatory burden and help
to expand access to home care services, consistent with policy goals
that inform the FLSA's exemptions for companion employees and live-in
domestic service employees.
3. Baseline Conditions and Affected Populations
According to available data from the Bureau of Labor Statistics
(BLS), in 2023, there were approximately 3.7 million ``Home Health and
Personal Care Aides'' employees in the United States.\57\ Consistent
with the methodology used to estimate the number of affected workers in
the 2013 rule, the Department believes that this figure represents an
upper bound estimate of the total number of home care workers
``employed by agencies'' who could be affected by this proposed
rule.\58\ The Department notes, for example, that some of these 3.7
million workers would ``[remain] covered by minimum wage and overtime
protections at the state level,'' \59\ while others might be ``employed
in facilities, such as nursing homes and hospitals,'' \60\ and
therefore are not domestic service employees eligible to be classified
as exempt companions or live-in domestic service employees under
sections 13(a)(15) or 13(b)(21) of the FLSA. However, this estimate
might not account for workers in other occupations who might be
affected by this proposed rule, such as live-in nannies.\61\ The
Department welcome feedback from the public on ways to refine this
upper-bound estimate of workers employed by agencies who might be
affected by this rule.
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\57\ See Bureau of Labor Statistics, U.S. Department of Labor,
Occupational Employment and Wages, May 2023, 31-1120 Home Health and
Personal Care Aides (visited June 17, 2025), <a href="https://www.bls.gov/oes/2023/may/oes311120.htm?utm">https://www.bls.gov/oes/2023/may/oes311120.htm?utm</a>. This figure does not include self-
employed home care workers.
\58\ See 78 FR 60519-20 (adding the number of employees in BLS'
then-separate occupation codes for ``Home Health Aides'' and
``Personal Care Aides'' to estimate that there were ``approximately
1.75 million direct care workers employed by agencies in 2011'').
\59\ 78 FR 60520.
\60\ Id.
\61\ See Madden, supra n. 47, at 4.
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Data limitations continue to make it difficult to estimate the
number of ``independent providers'' who might be affected by this
rulemaking, i.e., home care workers employed directly by a consumer or
a member of the consumer's family or household.\62\ Last year, the
Paraprofessional Healthcare Institute (PHI) estimated that there were
``at least 1.5 million home care workers, including family members . .
.
[[Page 28981]]
employed as `independent providers' through Medicaid-funded consumer-
direction programs, based on 2022-2023 survey data on consumer
enrollment in these programs.'' \63\ The Department will use this 1.5
million figure as its upper bound estimate for the number of
independent providers potentially affected by this proposed rule,
keeping in mind that it includes workers who might remain covered by
minimum wage and overtime requirements under state law. The Department
welcomes feedback on this choice.
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\62\ See 78 FR 60512 (discussing data limitations in estimating
the number of independent providers potentially affected by the 2013
rule).
\63\ PHI, Direct Care Workers in the United States: Key Facts
2024, 8 (2024), <a href="https://www.phinational.org/wp-content/uploads/2024/09/PHI_Key_Facts_Report_2024.pdf">https://www.phinational.org/wp-content/uploads/2024/09/PHI_Key_Facts_Report_2024.pdf</a>.
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According to the Bureau of Labor Statistics (BLS), ``home health
and personal care aides'' monitor the condition of people with
disabilities or chronic illnesses and help them with daily living
activities.\64\ In addition to these general duties, ``home health
aides'' perform basic health-related services--such as checking a
client's pulse, temperature, and respiration rate--depending on the
state in which they work.\65\ ``Personal care aides,'' sometimes called
caregivers or personal attendants, are generally limited to providing
nonmedical services, including companionship, cleaning, cooking, and
driving.\66\ The median pay for home health and personal care aides is
$16.78 per hour, with median annual earnings of $34,900 per year.\67\
According to PHI, 84 percent of home care workers are women, 67 percent
are non-white, and 32 percent are immigrants.\68\
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\64\ See Bureau of Labor Statistics, U.S. Department of Labor,
Occupational Outlook Handbook: Home Health and Personal Care Aides
(April 18, 2025), <a href="https://www.bls.gov/ooh/healthcare/home-health-aides-and-personal-care-aides.htm">https://www.bls.gov/ooh/healthcare/home-health-aides-and-personal-care-aides.htm</a>.
\65\ Id. (described in the ``What They Do'' tab)
\66\ Id.
\67\ Id.
\68\ See PHI, supra n. 63, at 6-7.
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The home care workforce is projected to experience rapid growth in
future years to meet the demands of an aging U.S. population.\69\ For
example, the Bureau of Labor Statistics (BLS) has projected that the
demand for ``home health and personal care aide'' workers will grow 21
percent from 2023 to 2033, much faster than the 4 percent average for
all occupations.\70\ Indeed, the home care workforce has already
doubled in size over the past ten years, growing from 1.4 million home
care workers in 2014 to more than 2.9 million in 2023.\71\
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\69\ The U.S. Census Bureau projects that in 2050, the U.S.
population for individuals ages 65 and over will be 83.9 million,
which is almost double what it was (43.1 million) in 2012. See U.S.
Census Bureau, An Aging Nation: The Older Population in the United
States (2014), <a href="https://www.census.gov/library/publications/2014/demo/p25-1140.html">https://www.census.gov/library/publications/2014/demo/p25-1140.html</a>.
\70\ U.S. Bureau of Labor Statistics, Occupational Outlook
Handbook: Home Health and Personal Care Aides (visited June 23,
2025), <a href="https://www.bls.gov/ooh/healthcare/home-health-aides-and-personal-care-aides.htm#tab-6">https://www.bls.gov/ooh/healthcare/home-health-aides-and-personal-care-aides.htm#tab-6</a>.
\71\ PHI, supra n. 63, at 8.
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Despite this growth, the supply of home care workers is failing to
keep pace with the growing demand for home care services.\72\ According
to a 2023 industry report, ``the workforce shortage in home-based care
has reached crisis proportions,'' with ``home health care providers
[reporting that they turn] away over 25% of referred patients due to
staff shortages.'' \73\ Although the Department predicted in the
regulatory impact analysis for its 2013 rule that ``guarantee[ing]
minimum wage and overtime compensation for home care jobs . . . will
attract more workers to the home care industry,'' \74\ growth in the
home care workforce ``slowed'' in the years following the 2013 rule,
resulting in ``the number of home care workers per 100 [individuals
receiving home and community-based services] declin[ing] by 11.6
percent between 2013 and 2019.'' \75\
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\72\ Id. at 5 (``[H]ome care employers continue to struggle to
recruit and retain enough workers to meet escalating demand.'').
\73\ Home Care Association of America & National Association for
Home Care & Hospice, The Home Care Workforce Crisis: An Industry
Report and Call to Action 1 (March 2023), <a href="https://www.hcaoa.org/uploads/1/3/3/0/133041104/workforce_report_and_call_to_action_final_03272023.pdf">https://www.hcaoa.org/uploads/1/3/3/0/133041104/workforce_report_and_call_to_action_final_03272023.pdf</a>.
\74\ 78 FR 60548.
\75\ Amanda R. Kreider & Rachel M. Warner, The Home Care
Workforce Has Not Kept Pace With Growth In Home and Community-Based
Services, Health Affairs, vol. 42, no. 5, p. 650 (May 2023), <a href="https://www.healthaffairs.org/doi/epdf/10.1377/hlthaff.2022.01351">https://www.healthaffairs.org/doi/epdf/10.1377/hlthaff.2022.01351</a>.
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In the absence of this rulemaking, home care workers and other
live-in domestic service employees would continue to be entitled to
minimum wage and overtime pay if they are employed by a ``third party''
employer, such as a home care agency that supplies workers in an
``agency-directed model'' of home care.\76\ Additionally, independent
providers who are currently exempt companions would likely continue
spending no more than 20 percent of their weekly worktime providing
``care'' to the individuals they serve, which is a requirement to
remain exempt under the current regulations.\77\ The Department assumes
that many nonexempt companion workers employed by third party employers
presently spend more than 20 percent of their weekly worktime providing
``care'' to individuals, as the 20 percent limit on care introduced in
the 2013 rule only applies to companion workers who are exempt. The
Department welcomes comment on these assumptions, which inform the
baseline scenario used to measure the potential effects of this
rulemaking.
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\76\ See GAO 21-72, supra n. 41, at 8.
\77\ See 29 CFR 552.6(b).
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4. Anticipated Benefits, Costs, and Transfers
As noted earlier, the Department assumes that there are 3.7 million
home care workers employed by third-party agencies, and an additional
1.5 million home care workers employed directly by a consumer (or their
family or household) who are commonly described as ``independent
providers.'' \78\ Under this proposal, some or all of the 3.7 million
home care workers employed by third-party agencies could become newly
exempt under the FLSA as a consequence of the proposed changes third
party employment in section 552.109, but some of these workers may not
be affected as a practical matter if they remain subject to minimum
wage and overtime pay requirements under state law. While the estimated
1.5 million independent providers would not be affected by the proposed
changes to third party employment in section 552.109, some of these
workers could have greater care-giving responsibilities as a
consequence of the proposed changes to the definition of
``companionship services'' in section 552.6--at least to the extent
that these independent providers presently are (and would remain) FLSA-
exempt companions.
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\78\ These home care workers are ``independent'' in the sense
that their employment is unaffiliated with a third-party provider,
not that they are self-employed independent contractors. Independent
providers are typically employees of the consumers they serve, or
the families or households of those consumers. However, it is
possible that an independent provider could be an independent
contractor rather than an employee for the purposes of the FLSA. See
78 FR 60484. The Department welcomes comment on the extent to which
some of the estimated 1.5 million independent providers might be
independent contractors.
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i. Benefits
The Department expects that its proposal to revert to the pre-2013
regulations would reduce the cost of home care services by providing
home care staffing agencies with greater scheduling flexibility and
reduced labor costs for home care workers who become newly exempt.
Relatedly, this rulemaking could obviate compliance costs related to
recordkeeping and other costs for home care providers, such as
increased hiring, recruiting, and training costs, that stakeholders
have asserted
[[Page 28982]]
are attributable to the 2013 rule.\79\ This would result in direct
costs savings for employer home care agencies and potential indirect
cost savings for the consumers of home care services and for Federal
and State governments, which reimburse home care services through
Medicaid.\80\
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\79\ See GAO 21-72, supra n. 41, at 17.
\80\ See Alice Burns, Maiss Mohamed, & Molly O'Malley Watts,
What is Medicaid Home Care (HCBS)?, KFF (Feb. 18, 2025), <a href="https://www.kff.org/medicaid/issue-brief/what-is-medicaid-home-care-hcbs/">https://www.kff.org/medicaid/issue-brief/what-is-medicaid-home-care-hcbs/</a>.
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The Department additionally expects that this NPRM, if adopted,
would expand access to home care services. By lowering labor costs, the
proposed rule may encourage more providers to enter or expand
operations in the home care market, increasing the availability of home
care services for aging and disabled populations. Relatedly, easier
access to home-based care may delay or prevent placement in more
expensive institutional settings, aligning with federal and state
policies favoring HCBS. Consumers who would prefer one home care
worker, rather than having multiple people assist them with sensitive
activities such as bathing and toilet use, would benefit from the
proposed rule to the extent that it lessens incentives to spread jobs
across multiple workers.
Finally, workers who are, in the baseline, employed by multiple
home care agencies (working more than 40 hours per week in total) may
be able to consolidate their employment with one agency, thus yielding
a convenience-related benefit.
The Department welcomes comment on the likelihood of these
potential benefits and the extent to which they offset or outweigh the
potential costs of this rulemaking, discussed below.
ii. Costs
Under the NPRM, many home care workers presently employed by third
party agencies would become newly exempt and lose the right to receive
minimum wage and overtime pay under the FLSA. Losing the right to
receive the federal minimum wage would not affect most workers, as the
median hourly wage for home health and personal care aides was $16.12
per hour in 2023--well above the $7.25 per hour federal minimum
wage.\81\ However, losing the right to receive overtime pay could
result in home care workers working additional overtime hours at
straight-time pay and/or receiving less pay for the overtime work they
would perform in the absence of this proposed rule. These potential
effects--longer work hours and/or less pay--could negatively impact the
morale of affected home care workers and lead to increased employee
turnover and difficulty attracting skilled workers to the industry.\82\
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\81\ See 29 U.S.C. 206(a)(1).
\82\ See Home Care Association of America, supra n. 76, at 5
(stating that direct care workers have a 64 percent turnover rate
within their first year of hire, attributable in part to ``low pay''
and ``burnout'').
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Additionally, the Department anticipates that a final rule similar
to this proposal would result in modest regulatory familiarization
costs. Although the proposed rule would not impose any new regulatory
requirements on home care agencies or consumers that these stakeholders
would need to learn about, the Department expects that home care
agencies, consumers, and home care workers would choose to spend time
learning about this rulemaking if it is finalized. Such familiarization
costs would be modest because the effects of the proposed rule are
fairly straightforward.
iii. Transfers
The proposed rule would likely result in a transfer of income from
domestic workers to employers, state Medicaid programs, and private
consumers. The majority of this income transfer would come from home
care workers currently employed by third party employers, who could
become newly exempt from minimum wage and overtime pay as a consequence
of this rulemaking. This transfer is not a net cost to society but
represents a redistribution of income and purchasing power.
As noted earlier, the majority of this income transfer would be
attributable to avoided overtime premiums, as most of home care workers
affected by this rulemaking are paid well above the FLSA's $7.25 per
hour minimum wage. The Department notes that, while it had previously
anticipated significant transfers from employers to home care workers
in the form of overtime earnings, GAO's 2020 report concluded that
earnings ``did not significantly increase'' following implementation of
the 2013 final rule.\83\ This may be because the Department did not
anticipate the extent to which affected employers would respond to the
2013 final rule by reducing the hours of their home care employees,
thereby avoiding overtime pay and reducing regular earnings.\84\ The
transfer resulting from rescission of the 2013 final rule is thus
likely to be more muted than the Department's 2013 analysis suggested.
This transfer effect could also be mitigated to the extent that third
party home care providers respond to this rulemaking by allowing exempt
home care workers to work longer hours than if such workers were
nonexempt.\85\ The Department welcomes comments on what transfer
effects may occur in light of how employers may respond to the
rescission of the 2013 final rule.
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\83\ GAO 21-72, supra n. 44, at 18-20.
\84\ Id. (finding that ``home care workers were less likely to
work overtime following implementation of the [2013 final rule]'').
\85\ See GAO-21-72, supra n. 44, at 13 (noting that ``some
states restricted home care workers hours to limit overtime costs in
their Medicaid programs in response to the [2013 final rule]'').
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5. Discussion of Regulatory Alternatives
The Department considered two alternatives to this proposal. First,
the Department considered the alternative of preserving the status quo
under the current regulations. This alternative was rejected for the
reasons discussed earlier in sections II and III(A)(2) of this notice.
Second, the Department considered the alternative of retaining some
changes from the 2013 rule in lieu of a wholesale return to the pre-
2013 regulations--specifically, retaining all changes to the regulatory
text in part 552 introduced by the 2013 rule except for the third party
provision codified at 29 CFR 552.109 and limits on ``the provision of
care'' codified in 29 CFR 552.6(b). This approach would, for example,
keep the 2013 rule's updated definition of the job duties which
constitute ``care'' and its removal of outdated domestic service worker
examples like ``governesses,'' ``footmen,'' and ``grooms.'' The
Department invites comments on these two regulatory alternatives, as
well as other regulatory alternatives that commenters may propose.
6. Conclusion
The proposed rule is anticipated to result in numerous benefits,
including potentially significant reductions in the cost of obtaining
and providing home care services. These benefits must be weighed
against likely reductions in employee earnings and worker protections.
Given these tradeoffs, the Department seeks public comment and
empirical data to better quantify the proposed rule's effects (perhaps
by updating quantitative inputs used in the analysis accompanying the
2013 final rule) and ensure that any final rule appropriately balances
the interests of consumers, workers, and providers.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (RFA) as amended by the
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA),
[[Page 28983]]
hereafter jointly referred to as the RFA, requires that an agency
prepare an initial regulatory flexibility analysis (IRFA) when
proposing, and a final regulatory flexibility analysis (FRFA) when
issuing, regulations that will have a significant economic impact on a
substantial number of small entities. Because this proposed rule would
have a significant (beneficial) impact on a significant number of small
entities in the home care industry, the Department has prepared this
IRFA.
1. Reasons Why Action by the Agency Is Being Considered and Statement
of Objectives and Legal Basis for the Proposed Rule
The FLSA generally requires that employees be paid at least the
Federal minimum wage, currently $7.25 per hour, for every hour worked
and at least one and one-half times their regular rate of pay for each
hour worked over 40 in a single workweek. 29 U.S.C. 206(a), 207(a).
Prior to 1974, the FLSA's minimum wage and overtime compensation
provisions did not apply to domestic service workers. In 1974, Congress
revised the FLSA to extend coverage to all domestic service workers,
however, Congress included an exemption from the minimum wage and
overtime compensation requirements for domestic service workers who
provide ``companionship services'' and an exemption from the overtime
compensation requirement for live-in domestic service workers. In 1975,
the Department promulgated regulations implementing the companionship
and live-in domestic service employee exemptions. These regulations
defined companionship services as ``fellowship, care, and protection,''
which included ``household work . . . such as meal preparation, bed
making, washing of clothes, and other similar services'' and could
include other general household work not exceeding ``20 percent of the
total weekly hours worked.'' Additionally, the 1975 regulations
permitted third party employers, or employers of home care workers
other than the individuals receiving care or their families or
households, to claim both the companionship services and live-in
domestic service employee exemptions.
In 2013, the Department revised its companionship services and
live-in employee regulations. The 2013 regulations defined
``companionship services'' narrowly to encompass only workers providing
limited, non-professional services. And the regulations precluded third
party employers (like home care agencies) from claiming the exemption
for companionship services or live-in domestic service employees.
The Department proposes to rescind the 2013 regulations and restore
the 1975 standards that applied following the amendments to the FLSA.
29 CFR part 552. The Department is also requesting comment on reasons
to keep or rescind the 2013 home care regulations, the best definition
of companionship services, and whether third party employers should be
covered by the exemption under the best reading of the FLSA. The
Department also seeks comment on the 2013 regulations' consistency with
statutory authority, and costs and benefits.
2. Description of the Number of Small Entities to Which the Recission
Will Apply
The 2013 regulation defines a ``small entity'' as a (1) small not-
for-profit organization, (2) small governmental jurisdiction, or (3)
small business. The Department used standards defined by SBA to
classify entities as small for the purpose of this analysis. For the
two industries that are the focus of this analysis, the SBA defines a
small business as one that has average annual receipts of less than $19
million for Home Health Care Services (HHCS, NAICS 621610) and $15
million for Seniors and Elderly Persons with Disabilities (SEPD, NAICS
624120). Based on the 2022 Statistics of U.S. Businesses (SUSB) data,
there are 27,140 small businesses in the HHCS industry (96 percent of
all business), and 32,899 small business in the SEPD industry (96
percent of all business). Thus, this rulemaking could impact 60,039
small businesses.
3. Projected Reporting, Recordkeeping, and Other Compliance
Requirements of the Proposed Rule
There are no reporting or recordkeeping requirements associated
with this rescission. Thus, the only direct costs to affected entities
would be rule familiarization costs.
4. Relevant Federal Rules Duplicating, Overlapping, or Conflicting With
the Proposed Rule
The Department is unaware of any Federal rules which duplicate,
overlap, or conflict with the proposed rule.
5. Discussion of Regulatory Alternatives
The Department considered two alternatives to this proposal. First,
the Department considered the alternative of preserving the status quo
under the current regulations. This alternative was rejected for the
reasons discussed earlier in sections II and III(A)(2) of this notice.
Second, the Department considered the alternative of retaining some
changes from the 2013 rule in lieu of a wholesale return to the pre-
2013 regulations--specifically, retaining all changes to the regulatory
text in part 552 introduced by the 2013 rule except for the third party
provision codified at 29 CFR 552.109 and limits on ``the provision of
care'' codified in 29 CFR 552.6(b). This approach would, for example,
keep the 2013 rule's updated definition of the job duties which
constitute ``care'' and its removal of outdated domestic service worker
examples like ``governesses,'' ``footmen,'' and ``grooms.'' The
Department welcomes comment on these regulatory alternatives,
particularly regarding whether the Department should retain any changes
from the 2013 rule which are not implicated by the legal and policy
considerations motivating this rulemaking.
C. Review Under the Paperwork Reduction Act
The purpose of the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C.
3501 et seq., includes minimizing the paperwork burden on affected
entities. The PRA requires certain actions before an agency can adopt
or revise a collection of information, including publishing for public
comment a summary of the collection of information and a brief
description of the need for and proposed use of the information.
As part of its continuing effort to reduce paperwork and respondent
burden, the Department conducts a preclearance consultation program to
provide the public and Federal agencies with an opportunity to comment
on proposed and continuing collections of information in accordance
with the PRA. See 44 U.S.C. 3506(c)(2)(A). This activity helps to
ensure that the public understands the Department's collection
instructions, respondents can provide the requested data in the desired
format, reporting burden (time and financial resources) is minimized,
collection instruments are clearly understood, and the Department can
properly assess the impact of collection requirements on respondents.
A Federal agency may not conduct or sponsor a collection of
information unless it is approved by the Office of Management and
Budget (OMB) under the PRA and it displays a currently valid OMB
control number. The public is also not required to respond to a
collection of information unless it displays a currently valid OMB
control number. In addition, notwithstanding any other provisions of
law, no person
[[Page 28984]]
will be subject to penalty for failing to comply with a collection of
information if the collection of information does not display a
currently valid OMB control number (44 U.S.C. 3512).
This rulemaking potentially affects the existing information
collection designated as OMB Control Number 1235-0018, Records to be
kept by Employers--Fair Labor Standards Act. Any changes to this
collection will be communicated through an upcoming 60-day Federal
Register Notice.
D. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (August 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The Executive order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions. The Executive order also requires
agencies to have an accountable process to ensure meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications.
The Department has examined this proposed rule and has determined
that it would not have a substantial direct effect on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government.
F. Review Under the Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a regulatory action likely to result in a rule that may cause the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector of $100 million or more in any one year
(adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy. 2
U.S.C. 1532(a), (b)). The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them.
The Department examined this proposed rule according to UMRA and
its statement of policy and determined that the rule does not contain a
Federal intergovernmental mandate, nor is it expected to require
expenditures of $100 million or more (adjusted for inflation) in any
one year by State, local, and Tribal governments, in the aggregate, or
by the private sector. As a result, the analytical requirements of UMRA
do not apply.
J. Review Under Additional Executive Orders and Presidential Memoranda
This proposed rule is expected to be an Executive Order 14192
deregulatory action. It also implements Presidential Memorandum
Directing the Repeal of Unlawful Regulations, dated April 9, 2025.
List of Subjects in 29 CFR Part 552
Minimum wages; Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Department is
proposing to amend part 552 of chapter V, subchapter A of title 29 of
the Code of Federal Regulations, as set forth below:
PART 552--APPLICATION OF THE FAIR LABOR STANDARDS ACT TO DOMESTIC
SERVICE
0
1. The authority citation for part 552 continues to read as follows:
Authority: 29 U.S.C. 213(a)(15), (b)(21), 88 stat. 62; Sec.
29(b) of the Fair Labor Standards Act Amendments of 1974 (Pub. L.
93-259, 88 Stat. 76).
0
2. Revise Sec. 552.3 to read as follows:
Sec. 552.3 Domestic service employment.
As used in section 13(a) (15) of the Act, the term ``domestic
service employment'' refers to services of a household nature performed
by an employee in or about a private home (permanent or temporary) of
the person by whom he or she is employed. The term includes employees
such as cooks, waiters, butlers, valets, maids, housekeepers,
governesses, nurses, janitors, laundresses, caretakers, handymen,
gardeners, footmen, grooms, and chauffeurs of automobiles for family
use. It also includes babysitters employed on other than a casual
basis. This listing is illustrative and not exhaustive.
0
3. Revise Sec. 552.6 to read as follows:
Sec. 552.6 Companionship services.
As used in section 13(a)(15) of the Act, the term ``companionship
services'' shall mean those services which provide fellowship, care,
and protection for a person who, because of advanced age or physical or
mental infirmity, cannot care for his or her own needs. Such services
may include household work related to the care of- the aged or infirm
person such as meal preparation, bed making, washing of clothes, and
other similar services. They may also include the performance of
general household work; Provided however, That such work is incidental,
i.e., does not exceed 20 percent of the total weekly hours worked. The
term ``companionship services'' does not include services relating to
the care and protection of the aged or infirm which require and are
performed by trained personnel, such as a registered or practical
nurse. While such trained personnel do not qualify as companions, this
fact does not remove them from the category of covered domestic service
employees when employed in or about a private household.
0
4. Amend Sec. 552.101 by revising the first three sentences of
paragraph (a) to read as follows:
Sec. 552.101 Domestic service employment.
(a) The definition of ``domestic service employment'' contained in
Sec. 552.3 is derived from the regulations issued under the Social
Security Act (20 CFR 404.1027(j)) and from ``the generally accepted
meaning'' of the term. Accordingly, the term includes persons who are
frequently referred to as ``private household workers.'' See S. Rep.
93-690, p. 20. The domestic service must be performed in or about the
private home of the employer whether that home is a fixed place of
abode or a temporary dwelling as in the case of an individual or family
traveling on vacation.
0
5. Amend Sec. 552.102 by revising paragraph (b) to read as follows:
Sec. 552.102 Live-in domestic service employees.
(b) Where there is a reasonable agreement, as indicated in (a)
above, it may be used to establish the employee's hours of work in lieu
of maintaining precise records of the hours actually worked. The
employer shall keep a copy of the agreement and indicate that the
employee's work time generally coincides with the agreement. If it is
found by the parties that there is a significant deviation from the
initial agreement, a separate record should be kept for that period or
a new agreement
[[Page 28985]]
should be reached that reflects the actual facts.
0
6. Amend Sec. 552.109 by revising paragraphs (a) and (c) to read as
follows:
Sec. 552.109 Third party employment.
(a) Employees who are engaged in providing companionship services,
as defined in Sec. 552.6, and who are employed by an employer or
agency other than the family or household using their services, are
exempt from the Act's minimum wage and overtime pay requirements by
virtue of section 13(a)(15). Assigning such an employee to more than
one household or family in the same workweek would not defeat the
exemption for that workweek, provided that the services rendered during
each assignment come within the definition of companionship services
* * * * *
(c) Live-in domestic service employees who are employed by an
employer or agency other than the family or household using their
services are exempt from the Act's overtime requirements by virtue of
section 13(b)(21). This exemption, however, will not apply where the
employee works only temporarily for any one family or household, since
that employee would not be ``residing'' on the premises of such family
or household.
0
8. Amend Sec. 552.110 by revising paragraphs (b), (c), and (d) and
removing paragraph (e) to read as follows:
Sec. 552.110 Recordkeeping requirements.
(b) In the case of an employee who resides on the premises, records
of the actual hours worked are not required. Instead, the employer may
maintain a copy of the agreement referred to in Sec. 552.102. The more
limited recordkeeping requirement provided by this subsection does not
apply to third party employers. No records are required for casual
babysitters.
(c) Where a domestic service employee works on a fixed schedule,
the employer may use a schedule of daily and weekly hours that the
employee normally works, and either the employer or the employee may
(1) indicate by check marks, statement or other method that such hours
were actually worked, and (2) when more or less than' the scheduled
hours are worked, show the exact number of hours worked.
(d) The employer may require the domestic service employee to
record the hours worked and submit such record to the employer.
Dated: June 27, 2025.
Donald Harrison,
Acting Administrator, Wage and Hour Division.
[FR Doc. 2025-12316 Filed 6-30-25; 8:45 am]
BILLING CODE 4510-27-P
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</html>Indexed from Federal Register on July 2, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.