The Labor Department yesterday published a final regulation that will allow manufacturers of knitted outerwear, such as hats and sweaters, to hire people to knit garments in their homes.

The rule marks the latest attempt by the Reagan administration to end a 42-year-old provision of the Federal Fair Labor Standards Act that bans firms from using home knitters unless they are handicapped or care for handicapped persons. The law was adopted after studies showed home knitters often did not receive the minimum wage or other job-related benefits.

The administration moved to lift the ban on home knitting in late 1981, saying it was unnecessary and in violation of the "spirit of free enterprise."

Labor unions, led by the International Ladies' Garment Workers' Union, objected and accused the administration of trying to undermine wage and child labor laws and "turn America back to the dark ages of industrial inhumanity."

The garment workers' union filed suit, and in November 1983 the U.S. Circuit Court of Appeals here ordered Labor Secretary Raymond J. Donovan to reimpose the ban, calling his decision to rescind it "capricious and arbitrary."

The department appealed to Chief Justice Warren E. Burger for an expedited hearing on the ban, but he declined. Donovan responded two weeks later by issuing an "emergency rule" to allow home knitting to continue while the department worked on the regulation issued yesterday.

Under the rule, which takes effect in 30 days, manufacturers must register with the Labor Department and obtain a certificate before hiring home knitters.

Susan Meisinger, deputy undersecretary for employment standards, said the certificates will help federal inspectors enforce the fair labor laws. "These regulations will enable the department to note which employers are legally using home workers so their employment and pay practices can be easily monitored," Meisinger said.

Manufacturers who fail to obtain certificates will face possible prosecution and denial of a certificate for up to a year, she said.

But Max Zimney, general counsel for the garment workers' union, said the certificates amounted to an attempt by the administration to circumvent the law.

Since 1942, manufacturers have been required to obtain work books from the Labor Department so home workers could keep track of the time they spent knitting. Zimney said that department records show that only 11 percent of the manufacturers who use home knitters have applied for the books and 90 percent of workers' entries in the journals are "false."

"This certificate system will not work because manufacturers are not going to come forward," he charged. "If they do, they can't get the advantage of home work, including the avoidance of paying unemployment insurance, federal taxes, Social Security, and dealing with such problems as immigration laws, local zoning regulations and wage-and-hour laws which the manufacturers violate in wholesale."

The Labor Department said 63,000 people work as knitters, mostly in Vermont and Maine, but it said only a fraction of them are believed to work at home.

In 1979, the Carter administration began studying home work in seven industries, including women's apparel, jewelry manufacturing, knitting, button and buckle manufacturing, handkerchief manufacturing and embroidery. The new regulation does not lift the ban on home work in the the six other industries, although some say that if the new ban withstands legal tests, the other industries will be included in the future.

Exact statistics on how many people work at home is difficult to establish. Some Labor Department officials, however, have estimated that 5 million Americans now earn livings at home.

The use of computer networks has made work at home more practical, but the department said the revival of cottage industries is largely the result of economic pressures and a desire by many working mothers, and a few fathers, to be near their children.