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Run the Payroll Fee Auditor →Blog · Payroll Management · Home Health
Home Health Agencies: Hourly vs. Salaried Employee Payroll (2026)
Hourly versus salaried in a home health agency is not a preference, it is the exemption test: a salary of at least $684 a week plus a duties test. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Who in a home health agency can be salaried and exempt
Since January 1, 2015, home care agencies and other third-party employers cannot claim the companionship services exemption and must pay minimum wage and overtime after 40 hours even when the worker is jointly employed by the household. The exemption itself covers fellowship and protection only, with care limited to 20 percent of hours per consumer per workweek and no medically related tasks.
A live-in domestic worker is one who resides on the premises permanently or for extended periods, meaning 5 days a week or 120 hours or more. Since January 1, 2015, agencies may not claim the live-in overtime exemption and must pay overtime after 40 hours; workers on 24-hour shifts who do not reside on the premises are not live-in workers.
The salary math for home health agencies
The standard salary level is $684 a week, $35,568 a year. BLS puts the May 2025 national median for home health and personal care aides at $35,800, which is $688 a week, above the floor, so for that role the duties test is the whole question. Paying a salary to a non-exempt employee is legal; it just does not remove overtime, which is then computed on the salary divided by hours actually worked each week.
What changes when a role moves between the two
Moving registered nurses and LPNs from hourly to salaried changes the pay code, the timekeeping rule and the overtime treatment at once. A salaried non-exempt employee still needs hours recorded every week, and a salaried exempt one needs the exemption documented against the rule above, because in an audit the burden of proving the exemption sits with the employer.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- Since January 1, 2015, home care agencies and other third-party employers cannot claim the companionship services exemption and must pay minimum wage and overtime after 40 hours even when the worker is jointly employed by the household. The exemption itself covers fellowship and protection only, with care limited to 20 percent of hours per consumer per workweek and no medically related tasks. [DOL Fact Sheet #79A]
- A live-in domestic worker is one who resides on the premises permanently or for extended periods, meaning 5 days a week or 120 hours or more. Since January 1, 2015, agencies may not claim the live-in overtime exemption and must pay overtime after 40 hours; workers on 24-hour shifts who do not reside on the premises are not live-in workers. [DOL Fact Sheet #79B]
Read the full guide to FLSA overtime rules for employers, and the rest of the home health agency payroll library.
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Frequently Asked Questions
Can a home health agency pay registered nurses a salary and skip overtime?
Only if the role meets an exemption: the $684 weekly salary floor plus the duties test, or an industry-specific exemption. Since January 1, 2015, home care agencies and other third-party employers cannot claim the companionship services exemption and must pay minimum wage and overtime after 40 hours even when the worker is jointly employed by the household.
Does the $35,800 national median for home health and personal care aides clear the salary test?
$688 a week is above the $684 floor, so salary is not the obstacle; the duties test is. BLS OEWS, May 2025.
What does managed payroll cost for a home health agency?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Visit-based aide pay, travel time reimbursement and Medicaid billing vs payroll are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Home Health Agencies. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Overtime Pay Under the FLSA
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