NEWS | DOL Drops Appeal on 2024 Overtime Rule - What NSBA, Small Business Owners Should Know

The end of this litigation removes near-term uncertainty but signals a new rulemaking phase, meaning NSBA members and small-business owners should expect continued policy shifts on overtime and prepare for potential changes to this rule.

MAY 06, 2026 | Litigation over the 2024 Biden-era overtime rule has officially come to a close, after the Department of Labor (DOL) withdrew its appeal this week, effectively resetting the regulatory landscape and opening the door for a new rulemaking process on overtime eligibility.

At the center of the dispute was the 2024 final rule issued by the DOL under the Biden administration, which sought to significantly raise the salary threshold for exemption from overtime pay under the Fair Labor Standards Act.

The rule would have increased the threshold to $58,656 annually, expanding overtime eligibility to millions of additional workers, but implementation was halted later that year following legal challenges, leaving the 2019 rule finalized during the Trump administration as the governing standard.

Under that 2019 framework, the exemption threshold remains substantially lower, meaning fewer employees automatically qualify for time-and-a-half pay. For small businesses, this has preserved a degree of predictability in labor costs over the past two years, even as uncertainty surrounding the litigation persisted.

The appeal itself was initiated during the Biden administration, but remained active into the current Trump administration, as policymakers reassessed the broader regulatory approach to wages and hour standards.

With the DOL's appeal now dropped, the legal barrier preventing new rulemaking has been removed.

Conclusion of litigation eliminates the immediate risk of the 2024 rule being reinstated; however, it also paves the way for the DOL to propose a new overtime rule, which could align more closely with the 2019 standard with targeted updates, such as incremental threshold increases, regional adjustments, or revised duties tests.

In an economic environment of uncertaintiy, the Trump administration now has the opportunity to craft a rule balancing worker protections with the operational realities facing small businesses.

NSBA will be closely monitoring any forthcoming proposed rule and engaging in the notice-and-comment process to ensure the voices of small businesses are represented in DOL evaluations and final decisions on the overtime rule change.

As always, NSBA supports commonsense policies providing clarity, flexibility, and predictability needed for small-business growth and job creation.