Are College Athletes Employees? Where the Biggest Question in NIL Stands
By faNILy Team ·
This week, the Protect College Sports Act cleared the Senate Commerce Committee 19-9. It would put NIL rights, scholarship protections and healthcare protections into federal law. But it deliberately skips the question that hangs over everything else in college sports: are athletes employees?
The committee's own section-by-section summary says the bill is neutral on whether athletes are employees. Sportico put it another way, noting the bill steers clear of the issue and focuses on media rights, eligibility and transfers instead. Here's why that question is so hard, and where it stands.
Where things stand today
Right now, college athletes aren't recognized as employees. That matters because employment is the doorway to a lot of other rights, including the ability to form a union and bargain collectively.
Today's model works without that. Schools pay athletes through revenue sharing under the House settlement, and athletes earn third-party NIL money from brands and others. But those payments aren't wages, and athletes aren't on payroll.
The case that could change it: Johnson v. NCAA
The most important legal test is Johnson v. NCAA, an ongoing case that asserts college athletes are student employees under the Fair Labor Standards Act and related state laws, Sportico reports.
The athletes' argument is intuitive. They say they should be treated at least as well as work-study classmates, some of whom are on scholarship and are paid to work at the same games the athletes play in. If the people selling programs and staffing the gates get paid as workers, the argument goes, the people on the field shouldn't be treated differently just because they're athletes.
Nothing has been decided yet. That's why the case is worth watching: a ruling for the athletes could open the door to wage-and-hour claims that today's system was never built to handle.
The labor board angle
The National Labor Relations Board has also weighed in over the years, and both efforts Sportico recounts had some success before they ended. In the Northwestern case, the board declined to assert jurisdiction, in part because Northwestern is a private school competing against public Big Ten schools governed by state law. In the Dartmouth case, an NLRB regional director found the players were employees because they performed work in exchange for compensation. That effort was later withdrawn by the players' union after the 2024 election shifted the political headwinds, Sportico reported.
Why Congress is stepping around it
Employment status gets complicated fast. Public universities answer to state labor law, private schools fall under federal labor law, and both often play in the same conference. Add in the questions employment would raise about wages, unions and gender equity, and it's easy to see why lawmakers chose to leave it alone for now.
What it means for athletes and families
For now, the practical takeaway is that the current system, revenue sharing plus third-party NIL, is the one athletes are operating in. Any shift toward employment would likely come from the courts or a future law, not overnight.
Families should understand which payments come from a school and which come from outside parties, since they're governed by different rules. This isn't legal advice, and anyone signing a deal should talk to a qualified professional.
What it means for fans
Whether athletes become employees or not, their name, image and likeness belong to them. That's the piece of the system fans can engage with directly, by following athletes, buying their content and connecting with them as people, not just players on a roster.