Home Health Aide Payroll: State-by-State Wage & Hour Rules

Picture a home health aide clocking out at a client’s house in Buffalo, driving forty minutes to the next visit in Rochester, then covering a 24-hour live-in shift for a different client the following week. Every one of those hours touches a different pay rule. That’s just an average week for a lot of home health and home care agencies, and it’s why payroll here looks nothing like payroll in a restaurant or a warehouse.

Federal wage and hour law treats home care workers as their own category. States then stack their own minimum wage schedules, paid leave mandates, and in New York’s case, a separate wage parity system on top of that. Add live-in aides, 24-hour shifts, and constant travel between clients, and you end up with a payroll process that has more exceptions than rules.

This isn’t a rundown of payroll vendors. It’s a rundown of the wage and hour rules that create real risk for home health agencies right now, state by state and rule by rule. Some of these are settled law. A couple are still moving. All ten belong on a compliance checklist for 2026.

Last updated: August 2026

1. Federal Law Treats Home Care Work as Its Own Category

Home health aides don’t fall under the same wage rules as a retail cashier or a line cook. For decades, a “companionship services” exemption let some home care employers skip minimum wage and overtime pay for aides who mostly provided fellowship or light supervision. That changed in 2013, when the U.S. Department of Labor finalized a rule narrowing the exemption. The bigger change for agencies is that the rule blocked third-party employers, meaning home care agencies and staffing companies, from claiming the exemption at all. It took effect January 1, 2015.

Nurses were never eligible for the exemption to begin with. Neither is an aide who spends more than 20% of the workweek on general household work unrelated to care, such as cleaning or errands, according to DOL Fact Sheet #25. In practice, most agency-employed home health and home care aides are entitled to at least the federal minimum wage and time-and-a-half overtime after 40 hours a week. That’s the baseline. States build on top of it, and that’s where things get complicated fast.

2. New York’s Home Care Aide Minimum Wage Runs on Its Own Schedule

New York doesn’t apply its standard minimum wage to home care aides. It runs a separate wage schedule under Public Health Law § 3614-f, and that rate sits well above the regular one. As of January 1, 2026, the home care aide minimum wage reached $19.65 an hour in New York City, Long Island, and Westchester County, and $18.65 an hour across the rest of the state, compared with the standard $17.00 and $16.00 minimum wage in those same regions, per the New York State Department of Labor’s home care aide wage fact sheet. Agencies paying the standard state minimum wage instead of the home care aide rate are underpaying, and that gap has widened with every scheduled increase since 2022.

New York also runs a separate wage parity framework for aides serving Medicaid-funded home care clients in New York City, Long Island, and Westchester. That framework requires a minimum total compensation package, including a benefits portion, not just a cash wage. Here’s the part worth flagging: this schedule has moved almost every year since 2022, and New York’s standard minimum wage shifts to a cost-of-living index starting in 2027. Don’t assume last year’s rate still applies. Check the state Department of Labor’s published schedule directly before running payroll for New York-based aides.

3. The Federal Companionship Exemption Is Under Review Right Now

This part of the law isn’t settled. In July 2025, the Department of Labor published a proposed rule that would roll back the 2013 companionship services standard and return to rules last used in 1975, according to the department’s direct care worker rulemaking page. Under the 1975 approach, third-party employers, including home care agencies, could once again claim the companionship and live-in exemptions for qualifying workers. The public comment period closed September 2, 2025.

No final rule has been published as of this writing. That matters a lot for home care agencies, since the outcome determines whether a large share of companionship-focused aides are owed overtime pay going forward or not. Until the Department of Labor issues a final decision, the safer move is to keep classifying and paying aides under the current 2013 standard. Don’t assume a rollback that hasn’t actually happened.

4. Travel Between Clients Is Paid. The Drive to Your First Visit Isn’t.

A home health aide’s day rarely stays in one house. Most agencies route aides to two, three, sometimes five clients in a single shift, and every mile in between raises a payroll question. Under the Fair Labor Standards Act, an employee’s ordinary commute from home to their first work location, and from their last location home again, generally isn’t considered work time. Travel between job sites during the workday is a different story.

Per DOL guidance on hours worked under the FLSA, “travel from job site to job site during the workday” counts as compensable time. For a home care aide, the drive from one client’s house to the next is paid time, even though the drive from the aide’s own home to that first client that morning is not. Agencies that only pay for time spent inside a client’s home, and skip the drive time between visits, are shorting workers on hours the law counts. Getting this right usually comes down to how well your time and attendance system captures clock-outs and clock-ins at each stop, not just a single daily total.

5. Live-In Aides Get Their Own Overtime Exemption, But Only With a Signed Agreement

Some clients need round-the-clock coverage, and agencies solve that with live-in aides who stay in the client’s home for extended stretches, sometimes several days at a time. Federal law has a specific overtime exemption for these workers, but it isn’t automatic. Under 29 CFR 552.102, a live-in domestic service employee can be exempt from overtime pay only if the employer and employee sign a written agreement first.

That agreement can exclude reasonable sleep time, meal periods, and off-duty personal time from paid hours, as long as those periods are long enough for the aide to actually use them for rest or personal activity. Here’s the part agencies miss most often: if a client interrupts sleep or a meal period for care needs, that interrupted time becomes paid work time again, even under a signed agreement. No agreement means no exemption. This paperwork belongs in the onboarding packet before an aide ever starts a live-in assignment, not filed away sometime after the fact.

6. 24-Hour Shifts Turn Sleep Time Into a Recordkeeping Problem

Twenty-four-hour shifts are common in home health, especially for clients who need overnight supervision. On paper, an agency might exclude eight hours of sleep time from a 24-hour shift under a live-in agreement. In practice, actual sleep rarely goes uninterrupted. A client with dementia might need help at 2 a.m. three nights a week. A client recovering from surgery might call out in pain at random hours. Every interruption chips away at the excludable sleep time, and frequent enough interruptions can undo the exclusion for that shift entirely.

Agencies that assume a flat eight hours off the clock for every 24-hour shift, with no way to log actual interruptions, are building payroll on an assumption a wage claim or a Department of Labor audit will test directly. Documenting interruptions as they happen, not reconstructing them later from memory, is usually the difference between a clean audit and a costly one.

7. Minimum Wage Isn’t One Number. It’s Roughly Fifty Different Numbers.

Agencies operating in more than one state don’t get to run payroll off a single wage table. As of mid-2026, state minimum wages range from $15.00 an hour in states like Illinois and Massachusetts to $17.13 an hour in Washington, with California at $16.90 and New York at $17.00 in its highest-cost regions, according to the U.S. Department of Labor’s state minimum wage data. Some states adjust their minimum wage every January based on inflation. Others hold steady for years, then jump. A few, including Michigan, already have increases scheduled years out.

For a home health agency staffing aides across three or four states, that’s three or four different wage floors, updated on three or four different calendars, layered on top of any home-care-specific rate like New York’s. Miss one update and you’re underpaying somewhere without realizing it, usually until a complaint or an audit surfaces the gap.

8. Paid Sick Leave Rules Don’t Look the Same in Any Two States

Wages aren’t the only thing that shifts from state to state. Paid sick leave mandates vary in accrual rate, employer size thresholds, and which workers qualify. New York, for example, requires sick leave to accrue at a rate of at least one hour for every 30 hours worked, with total hours owed ranging from 40 hours a year for the smallest employers up to 56 hours for employers with 100 or more workers, per the state’s paid sick leave program guidance.

Other states use entirely different accrual formulas, and some have no statewide mandate at all, leaving individual cities or counties to fill the gap. For a home health agency, that usually means maintaining a different leave policy for every state of operation, sometimes for every city within that state. Getting this wrong doesn’t just risk a fine. It risks an aide showing up sick to a client’s home because they didn’t realize they had leave available, which carries its own liability in a healthcare setting.

9. Blended Overtime Rates Get Messy When Aides Work More Than One Pay Rate

Plenty of home health aides don’t work at a single pay rate all week. An aide might handle standard personal care visits at one rate and a specialized skilled-care case at a higher rate, sometimes for the same agency in the same week. When that happens, overtime doesn’t simply apply to whichever rate the aide happened to be earning during the overtime hours.

Under the FLSA, overtime generally has to be calculated using a weighted average of every rate worked that week, known as the regular rate, unless the aide qualifies for one of a few narrow alternative methods. Getting this math wrong is one of the more common wage claims in home care, mostly because it’s easy to calculate overtime off the wrong base rate without noticing. That’s not a calculation anyone should be running by hand in a spreadsheet every pay period. It’s exactly the kind of math payroll software built for hourly, multi-rate workforces is meant to handle.

10. Recordkeeping Is What Saves You When a Claim or Audit Shows Up

None of the rules above matter much if you can’t prove what actually happened during a shift. Federal law requires employers to keep records of hours worked, wages paid, and the basis for those wages for every non-exempt employee, and state agencies often require more on top of that. For home health agencies, that means logging clock-in and clock-out times at each client location, not just a daily total. It means keeping signed live-in agreements on file, not just knowing one exists somewhere. It means documenting sleep interruptions on 24-hour shifts as they happen, not weeks later.

When a wage claim gets filed, whoever has the better records usually comes out ahead, since the burden often shifts to the employer to disprove an employee’s account of hours worked. Agencies that can pull a clean, time-stamped record for any aide, any shift, any client, going back years, are in a fundamentally different position than agencies reconstructing timesheets from memory after the fact.

None of this stays still for long. Wage schedules move every January. Federal rules get proposed, commented on, and sometimes reversed. State leave mandates expand. Sound familiar? The agencies that handle this well aren’t the ones scrambling to catch up every time a rate changes. They’re the ones with systems built to track multi-state wage rules, travel time, and shift documentation as a matter of course, not as a once-a-year scramble. Netchex works with home health and home care agencies to help build that kind of payroll process, one that keeps pace with the rules instead of chasing them.

Frequently Asked Questions

This guide reflects publicly available wage and hour information from federal and state labor agencies as of 2026. Wage rates, exemptions, and leave mandates change frequently and vary by state and locality. Contact your state labor department or legal counsel to confirm current requirements for your agency.

Disclaimer: Any product roadmap or future plans provided herein are for informational purposes only. They do not represent a commitment to deliver any material, code, feature, or functionality. Plans may change without notification. The development, release and timing of any features or functionality described remain at the sole discretion of Netchex, its affiliates, and partners. Netchex does not give legal, tax, or accounting advice. You are responsible for ensuring your use of Netchex product meets your individual business and compliance requirements.

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