When You Owe a Caregiver Overtime

Do You Owe a Privately Hired Caregiver Overtime?

In most cases, yes. Under the Fair Labor Standards Act (FLSA), a caregiver you employ directly who provides personal care — help with bathing, dressing, toileting, feeding, or mobility — is generally entitled to overtime pay of one and a half times their regular rate for any hours worked beyond 40 in a workweek, the same as most other hourly employees 1Ref 1U.S. Department of Labor, Wage and Hour Division (2025).Application of the Fair Labor Standards Act to Direct Care Workers.The general FLSA framework covering direct care workers, including that most caregivers are entitled to minimum wage and overtime, and the history of the companionship and live-in exemptions.. This applies whether the caregiver works one long shift a day or several shorter ones, as long as the total crosses 40 hours in that week.

The exception that trips families up is a narrow federal carve-out for caregivers who provide only companionship services — fellowship, protection, and supervision, with no more than a limited amount of hands-on personal care — when they are employed directly by the person receiving care or their family, not by an agency 2Ref 2U.S. Department of Labor, Wage and Hour Division (2016).Fact Sheet #79A: Companionship Services Under the Fair Labor Standards Act (FLSA).The definition of companionship services and the narrow overtime exemption for companions employed directly by the individual or household, not a third-party agency.. Most caregiving arrangements involve more personal care than that exemption covers, which is why the general rule, not the exception, applies to most families.

What Counts as Companionship Services, and What Doesn't

The companionship services exemption is defined narrowly: fellowship and protection for a person who, because of age or infirmity, cannot care for themselves — think conversation, supervision for safety, and accompanying someone on errands 2Ref 2U.S. Department of Labor, Wage and Hour Division (2016).Fact Sheet #79A: Companionship Services Under the Fair Labor Standards Act (FLSA).The definition of companionship services and the narrow overtime exemption for companions employed directly by the individual or household, not a third-party agency.. It was never meant to cover the bulk of what caregivers actually do for someone with significant care needs.

Once a caregiver spends a meaningful share of their time on hands-on personal care — bathing, grooming, toileting, transferring someone in or out of bed, managing medication reminders — the work falls outside the narrow exemption, and standard minimum wage and overtime rules apply. Most families hiring a caregiver for a parent or spouse with real care needs are, without realizing it, outside the companionship exemption from the start.

The Rule Is Different for Agency-Employed Caregivers

In 2015, the Department of Labor's home care rule ended the companionship and live-in exemptions for third-party employers — meaning home care agencies, staffing companies, and registries that employ caregivers and send them into clients' homes 1Ref 1U.S. Department of Labor, Wage and Hour Division (2025).Application of the Fair Labor Standards Act to Direct Care Workers.The general FLSA framework covering direct care workers, including that most caregivers are entitled to minimum wage and overtime, and the history of the companionship and live-in exemptions.3Ref 3U.S. Department of Labor, Wage and Hour Division (2016).Fact Sheet #25: Home Health Care and the Companionship Services Exemption Under the FLSA.That home care workers are generally entitled to federal minimum wage and overtime, and how the companionship and live-in exemptions apply differently to agency versus direct employment.. An agency-employed caregiver is now entitled to minimum wage and overtime for hours over 40 a week, regardless of whether the work would have qualified as companionship services under the older rule.

This distinction matters because it shifts where the overtime obligation lands. If you go through a licensed agency, the agency — as the legal employer — is responsible for tracking hours and paying overtime; that cost is generally built into the agency's billing rate. If you hire directly, the overtime obligation, like every other payroll duty, becomes the family's.

State Law Often Requires More Than Federal Law

Federal law sets a floor, not a ceiling. A number of states have narrowed or eliminated the companionship exemption entirely under their own wage laws, meaning a caregiver who might be exempt from overtime under federal rules could still be entitled to it under state law. Some states also apply daily overtime thresholds — requiring overtime pay after eight hours in a single day, not only after 40 hours in a week — which federal law does not.

Because this varies significantly by state and changes periodically, the safest approach is to check your state labor department's current rule for domestic or home care workers directly, rather than assume the federal exemption is the final word. when state and federal rules conflict, the rule more favorable to the worker generally controls.

Live-In Caregivers Follow a Different Calculation

A caregiver who lives in the home is governed by a separate set of rules around how many of their hours actually count as work, including how sleep time and meal breaks are treated — a live-in arrangement is not simply a caregiver working 24 hours straight for overtime purposes. Because live-in-domestic-worker-hours involve their own counting rules distinct from a shift-based schedule, that calculation is worth treating as its own question rather than folding into a general overtime rule.

Minimum Wage Applies Even When Overtime Doesn't

It's worth separating two different questions: whether a caregiver is owed overtime, and whether they're owed at least minimum wage for every hour worked. Even in the narrow situations where a caregiver's work qualifies for the companionship exemption from overtime, federal home care minimum wage protections generally still apply to their regular hours — the exemption affects the overtime multiplier, not the wage floor itself.

This distinction also matters for family members who end up in a caregiving role themselves. Some state Medicaid programs let a beneficiary direct their own care budget and hire a caregiver of their choosing, including in certain cases a family member, and getting paid as a family caregiver through one of these self-directed arrangements still comes with the same underlying wage-and-hour questions as any other paid caregiving job, even though the funding source is different 4Ref 4Centers for Medicare & Medicaid Services (2025).Self-Directed Services.That Medicaid self-directed service delivery lets a beneficiary manage a budget and personally select, hire, and pay their own caregivers, including in some states a family member..

How to Stay Compliant as a Household Employer

Whether or not a specific caregiver technically qualifies for a narrow exemption, tracking actual hours worked from day one avoids most disputes later. A simple written log — start time, end time, tasks performed — protects both sides if a wage question ever comes up, and it removes any ambiguity about how much of the caregiver's time was companionship versus hands-on personal care. Paying a caregiver legally means treating overtime as part of the same payroll process as tax withholding, not a separate afterthought calculated only if a dispute arises.

Many families use a payroll service built for household employers once they cross into regular caregiving hours; it calculates overtime correctly, withholds the required taxes, and keeps records in the format a state labor agency or the IRS would expect to see. Becoming a household employer also raises questions beyond wages — caregiver injury liability, for instance, is a separate but related area worth understanding at the same time, since a caregiver hurt on the job may have workers' compensation questions that overlap with the same employment relationship. Given how easy this area is to get wrong, and how much it can cost in back pay and penalties if a caregiver later disputes their pay, it's worth confirming your specific situation against the Department of Labor's current guidance rather than relying on a general summary.