Domestic Worker Overtime Rules: FLSA and State Overlays

Last updated September 28, 2026

General information, not advice: this page covers tax and employment topics in general terms. It is not tax or legal advice, and reading it does not create a CPA–client relationship. Tax and labor rules vary by state and situation — consult a qualified professional for your circumstances.

Overtime is where household employers most often break the law without knowing it. The federal rule is simple — 1.5× the regular rate over 40 hours a week — but it only arrived for domestic workers in 2015, a generation after everyone else got it, and several states go further than the feds. This guide covers the federal baseline, the exemptions, the state overlays that change your math, and the nanny-share complication nobody warns you about.

The federal baseline: the 2015 Home Care Rule

In October 2013, the Department of Labor issued a final rule extending FLSA minimum wage and overtime protections to domestic service workers; it took effect January 1, 2015. Before that, many household workers were excluded under the old “companionship” interpretation.

The current federal rule (DOL fact sheet):

Domestic service workers are entitled to overtime — 1.5× the regular hourly rate for all hours over 40 in a workweek.
Live-in domestic workers (employed directly by the household they live with) are exempt from overtime but not from minimum wage. They must still be paid at least the federal minimum wage for all hours worked.
Casual babysitters — someone who babysits on an occasional, irregular basis — are exempt from both minimum wage and overtime. Your regular weekly sitter is not “casual”; the neighbor’s teenager who covers date night twice a month is.
Third-party employers (agencies) can’t claim the live-in exemption at all.

Pending federal proposal (current as of September 2026): On July 2, 2025, the Department of Labor published a notice of proposed rulemaking — “Application of the Fair Labor Standards Act to Domestic Service” (90 Fed. Reg. 28976) — that would rescind the 2013 rule and return to the pre-2015 framework. The comment period closed September 2, 2025, and no final rule has been issued, so everything above remains the operative law. (Separately, the Department has paused its own enforcement of the 2013 rule against home-care agencies while the proposal is pending — an enforcement choice, not a change in the law, and one that doesn’t affect families directly employing household workers.) Re-check this annually on the DOL’s domestic service page.

The worked math

Your nanny earns $25/hr and works 45 hours this week:

Regular pay: 40 × $25 = $1,000
Overtime rate: $25 × 1.5 = $37.50
Overtime pay: 5 × $37.50 = $187.50
Week total: $1,187.50

Five extra hours a week, sustained all year: 5 × $37.50 × 52 = $9,750/year — on top of the base $52,000. That’s why the true-cost model assumes a hard 40-hour schedule. If your family’s actual need is 45 hours, budget the 45-hour number, not the 40-hour number with “occasional” overtime.

The “regular rate” includes non-discretionary bonuses and shift differentials — you can’t dodge OT by relabeling pay. And overtime is computed per workweek (any fixed 7-day period you define), not per pay period: 50 hours one week and 30 the next is still 10 overtime hours, even on a biweekly paycheck.

State overlays: where the federal floor isn’t the ceiling

Federal law is the minimum. States can be stricter, and several are — in ways that change the math substantially. If your state isn’t listed here, check your state labor department; don’t assume the federal rule is the whole story.

California — daily overtime, the strictest regime. Non-live-in domestic workers get 1.5× after 8 hours in a day or 40 in a week, and double time after 12 hours in a day. Live-in workers get overtime after 9 hours/day. A nanny working four 10-hour days (40 hours total) earns 8 overtime hours in California and zero under federal law. (CA DIR Domestic Worker Bill of Rights FAQ)

New York — 40 hours, 44 for live-in. Overtime at 1.5× after 40 hours/week; live-in domestic workers after 44. Plus a required 24-hour day of rest each week (work it and it’s overtime) and three paid rest days per year after one year of service. (NY DOL Domestic Workers’ Bill of Rights)

Massachusetts — 40 hours plus rest-day rules. 1.5× after 40 hours/week, and workers at 40+ hours/week must get 24 consecutive hours of rest weekly (48 monthly); working a rest day voluntarily still pays the overtime rate. Employers of workers at 16+ hours/week must provide a written agreement covering pay, hours, and benefits. (Mass.gov domestic workers)

New Jersey — newly covered (2024). The Domestic Workers Bill of Rights, effective July 1, 2024, brought domestic workers under the NJ wage-and-hour law for the first time: minimum wage plus overtime, plus written contracts for workers at 5+ hours/month, paid sick leave, and employer registration for payroll taxes. (NJDOL employer guidance)

Hawaii — 40 hours, explicitly including domestic workers. Hawaii’s wage-and-hour law was amended to cover domestic service workers: minimum wage plus 1.5× after 40 hours/week. (HI DLIR domestic workers’ rights)

The pattern: roughly a dozen states plus D.C. now have domestic-worker-specific statutes. The federal 40-hour rule is your starting assumption everywhere; then check your state for daily overtime (CA), live-in thresholds (NY), rest-day premiums (MA, NY), and written-agreement mandates (MA, NJ).

The exemptions, precisely

Live-in workers (federal): exempt from overtime, not from minimum wage. The exemption applies when the worker resides in the household and is employed directly by the family — not by an agency. But states override this: California and New York both impose overtime thresholds on live-in workers, so “live-in” is not a blanket pass.

Casual babysitters (federal): exempt from both minimum wage and overtime. “Casual” means irregular and intermittent — the DOL’s classic example is the occasional date-night sitter. A sitter who works every Tuesday and Thursday afternoon on a set schedule is not casual; she’s a part-time household employee, and the $3,000 FICA threshold applies to her.

Companionship services (federal): a narrow exemption for workers providing fellowship and protection (not hands-on care) to elderly or disabled individuals, limited to 20% care work. This almost never covers nannies or housekeepers — don’t stretch it.

Here’s the scenario: two families share one nanny, 25 hours each, 50 hours total. Each family pays for “their” 25 hours and assumes no overtime is owed. Is that right?

It depends on the employment structure, and it’s genuinely murky:

If each family is a truly separate employer (separate agreements, separate payroll, the nanny could theoretically quit one and keep the other), most payroll providers treat each family’s hours separately — no overtime at 25 hours each.
If the arrangement looks like joint employment (one shared agreement, coordinated schedules, families acting together on hiring/firing), the DOL’s joint-employment principles can combine the hours — 50 total, 10 at overtime, with both families jointly liable.

The practical guidance: structure the share as two clearly separate employments from day one (separate work agreements, separate payroll accounts, separate tax filings — yes, each family files its own Schedule H), and confirm the hours-counting with your payroll provider in writing. The tax side is unambiguous — each family is separately a household employer — but the wage-and-hour side deserves a direct question to your provider or an employment attorney before the first shared week.

Also note: if either family pushes the nanny over 40 hours in a week on their own schedule, that family owes overtime on their hours regardless of the share structure.

Compliance checklist

Define your workweek (any fixed 7-day period) and put it in the work agreement
Track actual hours worked — every week, in writing; the DOL requires it and “we agreed on salary” is not a defense
Know your state’s rule, not just the federal one (daily OT? live-in threshold? rest-day premium?)
Price overtime into the offer: a 45-hour need at $25/hr is a $61,750/year commitment, not $52,000
In a nanny share, get the employment structure and hours-counting confirmed in writing before week one
Revisit annually — states amend these statutes regularly, and the federal rule itself is under review