Georgia Home Care Firms Lose FLSA Overtime Exemption
Home care companies must now comply with federal overtime rules as third-party exemptions are deemed inapplicable by the court.
Updated on Oct. 27, 2026 in Nursing Jobs
Live Poll
Should third-party home care companies be required to pay overtime to their employees?
A federal court in Georgia ruled that third-party home care companies are ineligible for the Fair Labor Standards Act (FLSA) companionship services exemption. This decision impacts compensation requirements for third-party operators, affirming the validity of the 2013 Department of Labor regulation.
Why it matters
The ruling limits the operational flexibility of home care businesses by mandating overtime pay compliance for third-party employers. It confirms that these businesses cannot rely on long-standing exemptions to bypass federal overtime standards.
A federal district court ruling affirmed the 2013 Department of Labor regulation that excludes third-party agencies from the companionship services exemption. The total number of impacted agencies across Georgia remains unknown as the underlying FLSA overtime claim proceeds.
The players
Noela, Inc.
A home care company involved in the FLSA litigation regarding overtime pay.
Department of Labor
The federal agency responsible for setting and enforcing labor standards, including the 2013 regulation on companionship services.
The details
The Northern District of Georgia court rejected the attempt by Noela, Inc. to dismiss an overtime claim by applying the Loper Bright legal standard. The court found that the 2013 Department of Labor regulation was a valid exercise of expressly delegated authority, specifically precluding third-party home care companies from utilizing exemptions intended for direct caregivers. Operators must now ensure that their payroll practices strictly adhere to standard overtime rules, as the third-party employment status no longer qualifies for this specific FLSA carve-out.
Timeline
2013: Department of Labor established the third-party exemption regulation.
October 2026: Federal court denied the motion to dismiss.
Market Landscape
This ruling reinforces the long-standing 2013 Department of Labor companionship services regulation despite evolving judicial scrutiny of agency power. It follows a pattern of courts affirming targeted federal labor protections for domestic care workers.
Home care operators must audit payroll systems to ensure full compliance with federal overtime mandates, as the third-party exemption is no longer a viable defense. Consult with employment counsel to verify if current staffing arrangements trigger mandatory overtime payments under federal law.
The takeaway
The court's decision signals that third-party care providers must treat overtime compliance as a fixed operational cost rather than an area for regulatory flexibility. Operators should review their classification of companionship service staff with legal counsel to mitigate potential liability for back wages.
Further reading
For more on labor standards and employment developments, visit Nursing Jobs.
Source note: This article includes information reported by Bloomberglaw.
Live Poll
Should third-party home care companies be required to pay overtime to their employees?
