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DOL

On July 2, the U.S. Department of Labor (DOL) took an important step to restore fairness and flexibility in the home care industry by issuing a proposed rule that would rescind restrictive provisions introduced in 2013 under the Obama administration. Those earlier changes, fully enforced in 2015, significantly narrowed the “companionship services” exemption under the Fair Labor Standards Act (FLSA), adding complex and costly wage requirements for home care agencies and Medicaid-funded services.

The 2013 rule redefined key terms, eliminated the exemption for third-party employers, and imposed overtime obligations on agency-employed direct care workers — contributing to increased costs and administrative burdens. These unintended consequences have strained both providers and public programs, particularly in Medicaid-funded home and community-based services (HCBS).

Now, DOL is proposing to correct course. In its justification, the Department noted that the previous regulations “might not reflect the best interpretation of the FLSA and might discourage essential companionship services by making these services more expensive.”

Why This Matters
This proposed rule is a welcome change for providers, participants, and state Medicaid leaders alike. Overtime costs are a major driver of financial pressure in long-term services and supports. When direct care workers live in the same home as the individuals they serve, current law allows participant-directed employers to avoid overtime pay. However, because of the 2013 changes, agency-employed workers doing the exact same job do not receive the same treatment — creating an inequitable and unsustainable two-tiered system.

If finalized, the proposed rule would allow third-party agency employers to once again access the same companionship exemption. This would create consistency across employer types and make it easier to recruit and retain direct care staff — particularly in shared living or live-in arrangements that are vital to participant independence and stability.

Act Now: Submit a Letter of Support
The DOL is accepting public comments on this proposed rule, and it is crucial that the provider community raise its voice. RCPA encourages home care agencies, managed care partners, and Medicaid stakeholders to submit letters of support highlighting how this change will:

  • Increase flexibility in service delivery;
  • Align federal and state wage policy;
  • Promote cost-effective care models;
  • Support direct care worker retention; and
  • Sustain vital programs that keep individuals in their homes.

Your voice matters. Together, we can ensure federal policy reflects the realities and needs of today’s home and community-based care system. View a sample letter for public comments here.

How to Submit Your Letter of Support
Visit the Regulations government website and search for the DOL proposed rule on companionship services. Comments must be submitted by July 31, 2025

If you have any questions, contact Fady Sahhar, RCPA PD&A Division Director.

The U.S. Department of Labor (DOL) has announced it is withdrawing its previously proposed rule that would have phased out the issuance of subminimum wage certificates authorized under Section 14(c) of the Fair Labor Standards Act (FLSA). The proposed rule, initially published in December 2024, aimed to amend 29 CFR Part 525 to phase out the use of special wage certificates for workers with disabilities.

This withdrawal means Section 14(c) certificates remain in effect, and DOL will continue to issue and renew them as authorized by federal law.

Rationale for Withdrawal:

After receiving more than 17,000 comments — including strong opposition from Members of Congress, service providers, individuals with disabilities, and their families — the DOL determined:

  • It lacks clear statutory authority to unilaterally eliminate a program that Congress has explicitly mandated.
  • Section 14(c) uses the word “shall”, not “may, indicating a mandatory duty for the Department to provide for the issuance of certificates “to the extent necessary to prevent curtailment of employment opportunities.”
  • The continued use of 14(c) certificates by over 40,000 workers as of 2024 indicates ongoing need.
  • Eliminating the program without Congressional action could result in unintended disruptions to employment and disability support services.

Impact on Providers:

  • Employers currently operating under valid 14(c) certificates may continue to do so, subject to existing legal requirements.
  • The DOL has no immediate plans to change the regulatory framework of 29 CFR Part 525.
  • A future rulemaking process could still be initiated, but any substantive changes would likely require Congressional action.

The full text of the rescission can be found here.

The Department of Labor (DOL) just announced its intent to publish a Notice of Proposed Rulemaking (NPRM) that would exempt certain types of home health workers from minimum wage and overtime requirements under the Fair Labor Standards Act (FLSA). In its reasoning, DOL said that the existing regulation “might discourage essential companionship services by making these services more expensive” and is proposing to exempt those employees from the minimum wage and overtime requirements of the FLSA. The proposed rule would also allow third party employers to claim those exemptions.

DOL will be accepting comments on their NPRM up to sixty days following its publication in the Federal Register, which is currently scheduled for July 2, 2025.

Capitol hill building in the morning with colorful cloud , Washington DC.

Yesterday, on March 26, House Education and Workforce Committee Chairman Tim Walberg (R-MI), Rep. Glenn Grothman (R-WI), Rep. Virginia Foxx (R-NC), Rep. Glenn Thompson (R-PA), Rep. Burgess Owens (R-UT), Rep. Erin Houchin (R-IN), Rep. Robert Onder (R-MO), and Rep. Ryan Mackenzie (R-PA) sent a letter to Secretary of Labor Lori Chavez-DeRemer requesting that the Department of Labor (DOL) withdraw the Biden Administration 14(c) rulemaking.

Of note, the Republican committee members highlight in the letter that “the proposed rule would have far-reaching consequences, disrupting vital employment opportunities for individuals with intellectual and developmental disabilities and harming their families who depend on these programs.” The policymakers further note in the letter that, “[r]ather than eliminating critical opportunities, federal policy should focus on expanding workforce participation for individuals with disabilities, ensuring a range of employment options that accommodate their diverse needs.”

The letter comes after Republican committee members sent letters to former Acting Secretary of Labor Julie Su urging the Biden Administration to withdraw the proposed rule, including a December 2024 letter expressing their concerns that the Administration had rushed the 14(c) rulemaking as well as a January 2025 letter urging the Administration to withdraw the rulemaking and at least extend the comment period for the same.

Please find here a copy of the letter. The press release is available here. Contact Tim Sohosky, Director of IDD, or Cathy Barrick, IDD Policy Analyst, know if you have any questions.

October is National Disability Employment Awareness Month (NDEAM), which recognizes the contributions of people with disabilities to the workplace and economy as well as raising awareness about disability employment issues and ensure that people with disabilities have access to good jobs.

In the spirit of NDEAM, the U.S. Department of Labor has introduced the “Situations and Solutions Finder,” a new tool aimed at aiding employers and employees with disabilities in understanding a variety of workplace accommodations. The Situations and Solutions Finder is an AskJAN feature that provides access to more than 700 accommodation scenarios shared by Job Accommodation Network users that employers and workers with disabilities can explore.