On July 25, 2025, the U.S. Department of Labor (DOL) issued Field Assistance Bulletin (FAB) 2025-4, announcing that it will no longer enforce the 2013 Final Rule that restricted third-party employers from using the Companionship Services Exemption (CSE) under the Fair Labor Standards Act (FLSA). This change specifically affects the companionship exemption, which determines whether certain workers providing in-home care are exempt from minimum wage and overtime protections.
For caregiver registries, this is a significant and long-awaited change that reduces federal enforcement risk and opens the door for more confident operations under the registry model. The regulatory shift directly impacts home care worker and direct care workers, such as personal care aides and home health aides, by altering how their employment rights and wage protections are applied under federal law.
This development follows the motivated congress decision in 1974 and subsequent legislative and regulatory changes that have shaped the scope of the companionship exemption over time.
The Companionship Services Exemption is a federal labor exemption that excludes certain caregivers from overtime and minimum wage protections under the FLSA. Specifically, it applies to workers who provide non-medical, in-home support to individuals who are unable to care for themselves due to age or disability. The exemption generally covers personal care aides and home health aides who assist with daily living activities, but does not extend to practical nurses or other trained personnel who perform medically related services. Home health services that involve medical care are not covered by this exemption.
Workers providing companionship services may assist with activities such as light housework, meal preparation, and social interaction, but the exemption does not apply if medically related tasks are performed by trained personnel. The scope of the exemption is limited to non-medical care, distinguishing it from home health services that require licensed professionals. When care is provided to referred patients, the exemption may still apply if the services meet the non-medical criteria. Because of this exemption, affected workers are not entitled to FLSA's minimum wage, FLSA's overtime requirement, the hour federal minimum wage, or overtime protections.
For many years, this exemption was available to third-party employers, including caregiver registries. That changed in 2013, when the DOL issued a Final Rule prohibiting third-party employers from claiming the exemption. This effectively removed the protection for registries, opening them up to investigations and potential liability for unpaid overtime, even when their caregivers met all the criteria for the exemption. The change also impacted payroll systems, requiring employers to adjust how they classify and compensate home care workers, and increased the importance of caregiver recruitment and retention.
When the 2013 Final Rule went into effect, it created a chilling effect across the caregiver registry space. Many registry owners had to reconfigure their business model, add layers of documentation and oversight, or operate in legal gray areas to avoid DOL action. Others exited the industry altogether, citing increased risk and reduced clarity around how to remain compliant. These changes also had the effect of hindering consumer access to home care services, as increased costs and regulatory burdens made it harder for consumers to find affordable and flexible care, highlighting the close relationship between billing and compliance in the industry.
While the goal of the 2013 Rule was to ensure fair wages for in-home care workers, it left registry owners in a precarious position. Even when functioning as referral models and engaging caregivers as independent contractors, they could no longer rely on the CSE as a federal defense in DOL enforcement actions. The rule contributed to a workforce shortage and increased the difficulty attracting skilled workers to the industry. It also affected spreading employment, as agencies had to schedule multiple caregivers to cover shifts, impacting continuity of care. Most workers in the home care sector were affected by these changes, and the inability to classify more workers as exempt further strained the labor pool. Additionally, the rule had implications for the median hourly wage of caregivers, as agencies adjusted pay structures in response to new compliance requirements.
FAB 2025-4 reverses this stance. The DOL has now clarified that it will no longer enforce the 2013 Final Rule with respect to the Companionship Services Exemption. In other words, third-party employers—including caregiver registries and any third party agency—can once again claim the exemption in DOL investigations, provided the following conditions are met:
This change allows third party agency employers to benefit from the exemption, which can result in reduced labor costs for registries and agencies by exempting certain caregivers from overtime protections.
This doesn’t change the law itself, but it does shift the DOL’s enforcement priorities, effectively reducing the federal regulatory burden on compliant caregiver registries. Employers should also review applicable state law requirements, as state law may impose additional obligations beyond federal changes.
While this bulletin won’t stop a private lawsuit or override state labor laws, it offers meaningful relief and validation for registry owners who have spent the past decade navigating an uncertain compliance landscape.
Here’s why it matters:
For the first time in over ten years, caregiver registries have clear guidance that the DOL will not pursue enforcement actions related to the CSE—if the exemption criteria are followed.
This bulletin reinforces what many registry advocates have argued for years: that registries, when operated properly, can provide flexible care options while remaining compliant with labor laws.
With enforcement pressure eased, registry owners have more breathing room to evaluate and refine their operations, documentation, and contracts—without fear of sudden audits or investigations tied to the exemption alone.
Just because the DOL isn’t enforcing the rule doesn’t mean the risks are gone. Private lawsuits are still possible, and many states continue to enforce stricter employment laws. This is the time to shore up documentation, clarify caregiver roles, and ensure your model truly reflects a non-employer referral relationship.
If you’re currently operating a registry—or considering launching one—this update is an opportunity to revisit your model and evaluate your level of risk. Consider the following:
This is one of the most meaningful federal shifts impacting caregiver registries in more than a decade. The DOL’s bulletin does not eliminate all legal risk, but it does create new opportunities for compliant, sustainable growth within the registry model.
For operators who have built their business around referrals, independence, and client choice, this bulletin is a clear signal that the registry structure is once again recognized—and supported—at the federal level.
If you have questions about how this change applies to your business, now is the time to seek answers. Because while this opens the door, it’s still up to each registry to walk through it responsibly.