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Home Health Agencies: Overtime Rules and Payroll Compliance (2026)
Overtime in home health agencies is time and one half after 40 hours on the regular rate, and the regular rate has to absorb visit-based aide pay and travel time reimbursement before the premium is applied. BEG runs home health agency payroll for $45 per employee per month inside the payroll software you already use, all-inclusive, live in 3 to 5 business days.
The overtime rules that apply to home health agencies
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.
Travel between clients during the workday is hours worked and the agency must pay for it; ordinary travel from home to the first client and home from the last is not. In the fact sheet example, the 30 minutes an aide spends driving from one client's home to the next is paid time.
A worked example at home health agency wages
Home health and personal care aides at the May 2025 national median of $35,800 earn about $17 an hour on a 2,080-hour year. Ten overtime hours in a week cost $258 at time and one half. If that week also carried visit-based aide pay, the amount folds into the regular rate first and the premium rises with it; leaving it out is the most common overtime error in this industry.
How the payroll is set up to get it right
Each pay component is flagged at setup as included in or excluded from the regular rate, hours are captured by workweek rather than pay period, and any industry exemption is applied per employee with the supporting record kept. Overtime is then arithmetic, not judgment, on every run.
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]
- Travel between clients during the workday is hours worked and the agency must pay for it; ordinary travel from home to the first client and home from the last is not. In the fact sheet example, the 30 minutes an aide spends driving from one client's home to the next is paid time. [DOL Fact Sheet #79D]
Read the full guide to how to calculate overtime pay, and the rest of the home health agency payroll library.
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Frequently Asked Questions
Which home health agency employees are exempt from overtime?
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.
How is overtime calculated on visit-based aide pay?
visit-based aide pay is added to the week's straight-time pay, the total is divided by hours worked to get the regular rate, and the half-time premium is paid on that rate for every hour over 40. 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.
What does an overtime hour cost at home health agency wages?
At the BLS May 2025 national median for home health and personal care aides, $35,800 a year or about $17 an hour, an overtime hour is $26 before any bonus or differential is added to the rate.
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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