On July 2, 2025 the U.S. Department of Labor’s Wage and Hour Division issued a Proposed Rule on Application of the Fair Labor Standards Act to Domestic Service. The proposed rule would rescind the 2013 Home Care Final Rule extending Fair Labor Standards Act (FLSA) protections to domestic workers, including worker owners of home care cooperatives. This proposed rule would permanently strip fair labor standards protections from home care workers and impact the growth of home care cooperatives. Comments are due by September 2nd.
If enacted, the proposed rule would rescind the 2013 Home Care Rule which created key positive changes for home care cooperative workers. The rule required that most home care workers be paid the federal minimum wage and overtime by narrowly defining “companionship services” which is exempt from FLSA. Under the 2013 definition, “care” (i.e., assistance with activities of daily living and instrumental activities of daily living) is only included and thus exempt from FLSA if the work does not exceed 20% of total hours worked in a week. The 2013 rule also asserted that third-party employers, such as home care agencies, could not claim “companionship” or “live-in” exemptions to the FLSA.
On July 25th, the Department of Labor (DOL) issued a bulletin instructing Wage and Hour Division (WHD) field staff to immediately cease enforcing minimum wage and overtime protections for home care workers. Read more about this on PHI’s website.
This proposed rule would undo the 2013 extension of FLSA’s minimum wage and overtime protections to home care workers that impacted worker-owners of homecare cooperatives. For more information on which workers would lose federal minimum wage and overtime protections, please see the DOL Fact Sheet: Home Health Care and the Companionship Services Exemption Under the Fair Labor Standards Act (FLSA). That document explains which workers, including worker-owners of cooperatives, had protections extended to them under the 2013 Rule and, therefore, which workers would be impacted under this proposed rule.
If this proposed rule is finalized, workers may still have minimum wage and overtime protections under state law. As background, the National Employment Law (back in 2013) looked at how workers in every state would be affected by the extension of federal minimum wage and overtime protections (the extension that is now under threat). Even in states that have their own minimum wage and overtime protections for home care workers, we urge cooperative stakeholders to submit comments as this will create a patchwork system for home care cooperatives and their worker-owners across the country.
This rulemaking will affect cooperatives just like any other business. Cooperatives are in a position to clearly articulate the importance of hearing from worker-owners before enacting sweeping changes to rules affecting both domestic workers and their clients. Worker cooperatives have an intimate knowledge of how deep and harmful the effects of this rule change will be on the homecare sector and other domestic work fields. This is also an opportunity to illustrate the benefits of cooperative models which are more likely to preserve wage and overtime protections that are not required by the government but are vital to a living wage for workers.
Submit your own comments using this template letter.
