Under federal law, a live-in caregiver for an elderly parent is usually owed at least minimum wage for every hour worked, and room and board is only a capped credit toward that pay. "Live-in" is also a legal status with a residence test, not just a staffing package an agency sells. If your parent can no longer be alone at night, know these rules before you sign anything: they decide what a lawful arrangement costs and whether overtime is owed.

In This Guide

What Counts as a Live-In Caregiver

Federal law uses "live-in" more narrowly than most families do, and the difference changes what you owe. Under the Fair Labor Standards Act (FLSA), a domestic service worker such as a home health aide or personal care aide is a live-in only if they reside on the employer's premises either permanently or for extended periods of time.

The U.S. Department of Labor (DOL) applies three thresholds:

  • Permanently: the worker lives, works and sleeps in the home seven days a week and has no home of their own other than the one the employer provides.
  • Extended periods, by hours: the worker lives, works and sleeps there five days a week, for 120 hours or more.
  • Extended periods, by days: under 120 hours a week, the worker stays five consecutive days or nights.

DOL also says who is not a live-in. A worker hired only temporarily, such as for two weeks, is not a live-in under the FLSA. A caregiver on 24-hour shifts who doesn't reside in the home permanently or for extended periods is not a live-in either, and under the FLSA must be paid time and a half for hours over 40 in a workweek unless another exemption, such as companionship services, applies.

Testing the "3 or 4 days on" rotation

Some agency schedules sold as live-in care have one caregiver work a stretch of three or four days, then hand off to a second caregiver. Measure that against the thresholds above: three or four days is short of both five days a week and five consecutive days or nights. This is arithmetic, not a DOL ruling on any particular schedule. But in its 2013 rulemaking, DOL recorded comments that the home care industry uses "live-in" differently than DOL does, and stated that a person's need for 24-hour care does not make every worker who provides it a live-in.

Live-In Care vs. 24-Hour Care

"24-hour care" describes your parent's need; "live-in" describes the worker's legal status. You can meet the need either way, but the sleep rules differ.

Live-in caregiver Caregivers on 24-hour shifts (not live-in)
Legal status Resides in the home permanently, or 5 days/120+ hours a week, or 5 consecutive days or nights Works shifts without residing there on one of those bases
Sleep time May be excluded by a reasonable agreement; private quarters required; no more than 8 hours a night A shift under 24 hours is all paid; on a shift of 24 hours or more, up to 8 hours of sleep may be excluded by agreement
When sleep must be paid Any sleep interrupted by a call to duty is work time Interruptions are work time; if the worker can't get at least 5 hours of sleep, the whole period counts
Overtime over 40 hours Household employer may claim the live-in exemption (overtime only) Owed, unless another exemption applies

Two details from DOL's sleep-time rules trip families up. A live-in with no other home must still be paid for some other hours that week, and a live-in residing for extended periods must be paid for at least eight hours in each 24-hour period. For a shift worker under 29 CFR 785.22, DOL adds that if the worker objects to excluding sleep time, there is no agreement and every hour on duty counts as work time.

Hiring a Live-In Caregiver Yourself: What You Owe

If you or your parent hire a caregiver directly and control how the work is done, you're the caregiver's employer, with the duties that come with it. That can feel like a lot on top of everything else, but it breaks into four manageable pieces.

Pay for every hour worked

The FLSA live-in exemption is an overtime exemption only: it doesn't excuse the employer from paying at least the applicable minimum wage for all hours worked, and DOL notes that state law may require a higher hourly wage. The federal minimum wage is $7.25 an hour, and where a state's own law gives workers greater protection, the employer must comply with both. California, for example, set its statewide minimum wage at $16.90 an hour on January 1, 2026. One federal exception to watch for is the narrow companionship services exemption, covered in the agency section below, which removes both minimum wage and overtime when every one of its conditions is met.

Put the hours agreement in writing

You and a live-in caregiver may agree to exclude sleep time, meal time and other periods of complete freedom from all duties, when the worker can leave or stay for purely personal pursuits. DOL accepts any reasonable agreement, considering all the facts. Free periods have to be long enough for the worker to make real use of them, and any interruption by a call to duty counts as hours worked. If the hours actually worked keep differing from the agreement, DOL's Fact Sheet #79B says you must make a new written agreement. To exclude sleep time at all, DOL's guidance says you must provide private quarters in a homelike environment: living and sleeping space separate from your parent, plus access to cooking and eating facilities, a bathroom and space for recreation.

Keep a record of the hours

DOL's live-in record-keeping regulation, 29 CFR 552.110(b), requires the employer to keep a copy of the hours agreement and a record of the exact hours a live-in works, though enforcement of that 2013 requirement is suspended until any final rule on DOL's July 2025 proposal takes effect. Keep the record anyway: poor records can leave you liable for back wages.

Handle household-employer taxes

Under IRS Publication 926, a worker is your household employee if you control not only what work is done but how it's done. In 2026, if you pay one household employee cash wages of $3,000 or more, Social Security and Medicare taxes apply: 15.3% of cash wages, split 7.65% from the employee and 7.65% from you. If you pay household employees $1,000 or more in cash wages in any calendar quarter of 2025 or 2026, you also owe federal unemployment (FUTA) tax. Publication 926's family carve-outs are narrow: they cover wages paid to your spouse, your child under age 21 and your parent (with a limited Social Security and Medicare exception when your parent cares for your own child). Our guide to hiring in-home help walks through the payroll setup.

What a Lawful Live-In Week Costs at the Federal Floor

When an agency hands you a flat daily rate, or a candidate offers to work for room and board, it's hard to know whether the deal is fair or even lawful. We don't quote a market price here, because we haven't found one we can trace to an authoritative source. What the law does set is a floor, and knowing it protects both your parent's budget and you from owing back wages later. These two examples show how to build it.

Before you budget from these numbers, swap in your state's minimum wage if it's higher than $7.25. Don't count the lodging credit against overtime, and don't claim more than your real housing cost, figured as a reasonable share of the total. And set aside your share of payroll taxes if wages cross the thresholds above.

Hiring a Live-In Through an Agency

When you hire through a home care agency, the agency is usually the employer. IRS Publication 926 says that if an agency provides the worker and controls what work is done and how, the worker is not your employee. In that case, the household-employer tax rules above aren't yours to handle. Whether the agency owes its live-in overtime is a different question, and right now the honest answer is that the federal rule is in flux.

The rule as written

Under 29 CFR 552.109(c), as revised by DOL's 2013 Home Care Final Rule, a third-party employer such as a home care agency may not claim the live-in overtime exemption, even when it jointly employs the worker with your household. Under the 2013 rule as written, a home care agency must pay a live-in at least the federal minimum wage for all hours worked and time and a half for hours over 40. Your household, even as a joint employer, may still assert the exemption, and DOL says that if the household can properly claim it, the household isn't liable for overtime regardless of the agency's involvement.

What changed in 2025

On July 2, 2025, DOL published a proposed rule to rescind the 2013 rule and return to the 1975 regulations, under which agency-employed live-ins are exempt from overtime. On July 25, 2025, DOL's Wage and Hour Division issued Field Assistance Bulletin 2025-4, telling its investigators not to investigate or take enforcement action against agencies that claim the live-in exemption until any final rule takes effect. The bulletin states that it doesn't change any statutory or regulatory requirement, so the 2013 text is still the regulation.

As of October 1, 2026, DOL's July 2, 2025 proposal had not been finalized, so the agency overtime bar is neither settled nor repealed. When you compare an agency's live-in quote with a private hire, ask the agency directly how it pays its live-in caregivers for overtime and under which rule. Check your state's wage rules too: DOL notes that some state laws give workers greater protection, and employers must comply with both.

The companionship exemption is a separate, narrow question

You may also hear that a caregiver is exempt as a "companion." The FLSA companionship services exemption removes both minimum wage and overtime, but under 29 CFR 552.6 it covers fellowship and protection, and includes hands-on care (help with daily activities) only when that care is attendant to the fellowship and doesn't exceed 20% of the hours worked per person per workweek. The companionship services exemption excludes medically related services. DOL says a worker who spends more than 20% of the week on care isn't performing companionship services that week and must get at least minimum wage for all hours and overtime over 40.

Under the 2013 rule as written, agencies can't claim the FLSA companionship services exemption, and a household can claim it only if the worker meets every requirement of 552.6. The July 2025 proposal would return to the 1975 definition (fellowship, care and protection), and Field Assistance Bulletin 2025-4 tells investigators not to consider care-time limits, or act against agencies claiming the exemption, until any final rule takes effect. For a parent who needs help bathing, dressing and getting to the bathroom every day, the 20% care limit in the regulation as written is hard to stay under.

Room and Board in Exchange for Care

Some arrangements have a caregiver live with an older adult and "work for room and board." It sounds kind to everyone. Under federal wage law, though, housing is at most a capped credit toward pay.

Lodging and meals can only be a credit toward wages (the lodging credit toward the minimum wage, not overtime), and only when the worker accepts them voluntarily and without coercion. The employer must record the weekly amounts it claims. Run the numbers from worked example #1: a week's maximum lodging credit is 7.5 hours' worth of the federal minimum wage, and meals add at most 1.5 hours' worth a day. Compare that with the hours your caregiver actually works, and the difference is what you owe in wages.

If a friend or relative helps with no pay and you aren't sure whether they're an employee, talk with your state labor department or an employment attorney before the arrangement starts.

When Your Elderly Parent's Live-In Caregiver Is Family

Many families end up here: an adult child moves in with Mom, or Mom moves in with them. The rules shift in three ways.

A paid relative's nights aren't automatically paid hours

In Medicaid-funded and other publicly funded home care programs that let your parent choose a family member as the paid provider, DOL usually won't treat a relative with a pre-existing close relationship as employed beyond the hours in the program's written plan of care. That limit holds only if the plan is reasonable, meaning it would include the same paid hours if the provider weren't family: a program can't cut paid hours because the caregiver is a relative. A worker who joined the household as a hired live-in has no such limit, and all their services must be paid.

Living together can change the tax answer

Under IRS Notice 2014-7, qualified payments through a Medicaid 1915(c) waiver can be excluded from the caregiver's gross income when caregiver and recipient share the caregiver's home as the caregiver's primary residence. The exclusion doesn't apply if the caregiver keeps a separate home where they regularly live. Our guide to tax breaks for family caregivers covers the rest.

Medicaid doesn't pay a family caregiver's rent

Federal Medicaid waiver funding doesn't cover room and board. Of the regulation's two narrow exceptions, the one that touches a live-in caregiver covers waivers that allow personal caregivers: the portion of rent and food reasonably attributed to an "unrelated caregiver" who lives in the same household as the waiver participant. The unrelated-caregiver rent-and-food carve-out disappears if the waiver participant lives in the caregiver's own home or in a home the caregiver owns or leases.

If you'd rather pay a relative privately, read our guide to personal care agreements first. And if your parent is moving into your home, check whether it changes her Supplemental Security Income in our guide to SSI when a parent moves in.

Who Pays for a Live-In Caregiver for an Elderly Parent

A few public programs can help pay a caregiver who lives with your parent, and it's worth knowing which ones before you assume you're on your own.

Medicare doesn't pay for live-in care

Medicare home health is part-time or intermittent: combined skilled nursing and aide services under 8 hours a day and 28 or fewer hours a week (up to 35 on case-by-case review). It does not cover 24-hour-a-day care at home, or custodial personal care when that's the only care needed. Our guide on whether Medicare pays family caregivers explains the edges.

Medicaid pays for services, not housing

Some state Medicaid programs are built around a caregiver who lives with the person. Three examples show the range:

  • Massachusetts adult foster care: MassHealth Adult Foster Care pays a live-in caregiver, through an AFC provider agency, to give daily personal care. Your parent and the caregiver live together in either person's home, and the caregiver can be related or unrelated. A spouse can't be the paid caregiver, and MassHealth's fact sheet also excludes legal guardians. The AFC rates include nothing for room and board.
  • Indiana structured family caregiving: Indiana Structured Family Caregiving is a Medicaid waiver service that pays for a caregiver, family or not, who must live in the participant's home. The state pays a provider agency a daily rate set by assessed level of need: as of July 1, 2025, $77.54 at Level 1, $99.71 at Level 2 and $133.44 at Level 3, and the agency must pass at least 60% of the daily rate through to the caregiver.
  • California IHSS: In California's In-Home Supportive Services (IHSS) program, the person receiving care is the provider's employer. A live-in provider submits monthly timesheets for electronic visit verification, and a provider who lives with the recipient can claim the Notice 2014-7 income exclusion by filing form SOC 2298.

Every state runs its programs differently. Start with Medicaid HCBS waivers by state and our 50-state guide to getting paid as a family caregiver. If your parent is a veteran or a veteran's surviving spouse, also read how VA Aid and Attendance pays for in-home care.

What to Do This Week

1
Step 1

Decide who the employer will be

Your parent, you, or an agency. That choice decides who owes overtime and who handles payroll taxes.

2
Step 2

Check the residence test

Count the days and hours the caregiver will actually live in the home. Under five days or 120 hours a week (and not five consecutive days or nights), plan on paying overtime past 40 hours.

3
Step 3

Write the hours agreement

List sleep, meal and free time, and set up private quarters before you exclude any sleep time.

4
Step 4

Price the floor

Multiply the hours worked by your state's minimum wage or the federal $7.25, whichever is higher, then subtract any lodging and meal credit the caregiver voluntarily accepts.

5
Step 5

Ask an agency the overtime question

If you're comparing quotes, ask how it pays live-in overtime while the 2025 proposal is pending.

6
Step 6

Call your state Medicaid office

Ask whether your parent's state has adult foster care, structured family caregiving or a self-directed program that pays a live-in caregiver.

Frequently Asked Questions

Do you have to pay a live-in caregiver for 24 hours a day?

Not necessarily. A reasonable written agreement can exclude up to 8 hours of sleep a night, plus meal and free time, if you provide private quarters; any call to duty during those periods is paid.

Is a live-in caregiver owed overtime?

A household that directly employs a true live-in can claim the overtime exemption. A caregiver who doesn't meet the residence test, such as one on a 24-hour-shift rotation, is owed time and a half over 40 hours unless another exemption applies. For agency-employed live-ins, the regulation bars the exemption, but DOL has proposed rescinding that bar and has told investigators not to enforce it until any final rule takes effect.

Does Medicaid pay for a live-in caregiver?

Some state programs do, such as MassHealth Adult Foster Care and Indiana's Structured Family Caregiving, which pay a caregiver who lives with the person through a provider agency. Medicaid waiver funding doesn't pay a family caregiver's room and board.,,

Can I be paid to live with and care for my mom?

In some states, yes, through a Medicaid or other publicly funded home care program that lets your mom choose a family member as her paid caregiver. Your paid hours are usually limited to the program's plan of care, and if you share a home with your mom, the pay may be excludable from your income under IRS Notice 2014-7.,

Learn More

CaregiverHow to Hire an In-Home Caregiver for an Aging ParentHow to hire in-home care for an older adult: home care agency vs hiring directly, what to screen for, and the household-employer tax rules most families miss. CaregiverHow to Get Paid as a Family Caregiver: The 50-State GuideHow to get paid to care for a family member in 2026: Medicaid self-direction, VA caregiver programs, personal care agreements, plus all 50 state guides. CaregiverMedicaid Self-Direction and Consumer-Directed ServicesHow Medicaid self-direction lets a family member be your paid caregiver: employer authority, budget authority, the 1915(j) spouse rule, and how to get started. FinancialHow to Pay for In-Home CareHow to pay for in-home care in 2026: what it costs and how Medicare, Medicaid HCBS waivers, VA benefits, and long-term care insurance each help cover it. CaregiverRespite Care for Family CaregiversWhat respite care is, the in-home and facility options, and the programs (NFCSP, Lifespan Respite, Medicaid, VA) that help families pay for a caregiver's break.

Find personalized help planning live-in care for your parent at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.

Still have questions?

Brevy answers from this guide and every other guide here, and can check what you qualify for.

BC

Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.