EPISODE 1: THE IMPACT OF “EMPLOYEE STATUS” TO A COLLEGE ATHLETE

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Why You, the Athlete, Should Care!

So, you’re a collegiate athlete (or the parent of), and you are hearing all the buzz about lawsuits against the NCAA and congress proposing NIL legislation. One topic in this mix, under scrutiny, and certain to impact you directly is whether you be come declared an “employee” of the university you attend. This is a HUGE deal! We want you to know our take on the Pro’s and Con’s.

On the Plus (+) Side:

+ You would be entitled to a guaranteed minimum wage for your work, including such activities as practice, studying film, and traveling to and from games, and overtime premium pay for work over 40 hours per week (the possibility of an exemption from overtime pay will be the topic of another article).

+ You could qualify for traditional employee benefits such as health insurance and could receive workers’ compensation benefits for injuries incurred while playing.

+ Colleges and universities would have to compete for athletes by paying higher wages, which could be tied to the projected contributions to revenue produced by your sport.

+ Some student athletes could choose to be represented by a labor union and bargain collectively for compensation and other rights and benefits (like Dartmouth Men’s Basketball).

 + NIL deals could be included as compensation but see below.

On the Negative (-) Side:

- Compensation, which might arguably include “extras” such as travel costs and allowances, would be taxable as income.‍

- Athletes who receive supplemental need-based aid could become ineligible or less eligible by virtue of receiving wages from their colleges.

‍- Negotiated compensation could potentially preclude employee athletes from engaging in NIL deals.

‍- You could lose your job and therefore your compensation in the event you perform below expectations.

‍- You are stuck with salary caps and other restraints on pay that are arrived at through collective bargaining if you unionize.

Our Final Thoughts

As you can see, this issue is complex and will have a massive impact on college athletics, pro and con. We favor a non-employee model, provided athletes can benefit from reasonable revenue sharing.  In future articles we will touch on related NIL topics such as employment contracts, the cost of employment to the university, international athletes, trademarks and other IP protections, contract law, and collective bargaining. Stay tuned!  

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ABOUT THE AUTHORS:

NILegally Speaking™ is written by PowerNIL/Ken Feinberg, attorney, in collaboration with other expert attorneys focused on employment, labor, contract, and intellectual property law.

For more information please contact:

ken@powernil.com                                                                                                                                          www.powernil.com

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