(06-13-2021 08:23 AM)Hokie Mark Wrote:  

(06-13-2021 08:06 AM)ken d Wrote:  Congress being congress, debate regarding NIL is bound to spill over into the broader questions of compensation for athletes. Ultimately, the resolution of those questions is going to require addressing whether athletes whose scholarships require that they play a sport (that is, the scholarship would be revoked if they voluntarily stop participating) are either employees of the school, non-employee contractors of the school, or some other unique classification.

I don't believe Congress will set an upper limit to athlete pay. I do think they could require that if the NCAA or any conference wants to do so that it would have to be a product of a collective bargaining agreement.

Under current law, any payments made to athletes over and above tuition, books and fees related to coursework are considered taxable income, and unless I am mistaken they are classified as non-employee compensation (NEC) not subject to FICA, unemployment insurance, etc. These payments would include the value of room and board if provided on campus (dormitories, meal plans), cash payments for athletes living off campus, as well as stipends for full cost of attendance (FCOA).

If congress were to legislate that scholarship athletes are employees, rather than independent contractors, then it seems to me that existing minimum wage laws would come into play. That would require some determination of how many hours of work required of the athlete must the minimum wage calculation be applied to. A case could be made (and probably would be made by congress) that all hours spent in practice, games, and travel to and from away games should be included, and that hours spent on classwork required to maintain eligibility, both in the classroom and outside homework, reading and study (typically about two hours for every hour of class time) be included as well. The details for implementation of this would be left to the IRS as it is now.

A very sticky part of this would be determining the minimum wage required for a student-athlete receiving a partial scholarship. There is no reason to assume that these athletes are required to spend a different amount of time than those on full scholarship. If they are employees subject to minimum wage rules, they would have to be paid as much as the full scholarship athletes. So, for all sports for which scholarship limits allow for partial scholarships, the increased cost to the schools would be huge, and likely only affordable for a fraction of NCAA schools.

I wonder if athletes could be classified as salaried workers?

I don't know if that would matter. I don't think you can designate someone as salaried in order to pay them less than what they would earn as an hourly employee at minimum wage. However, I do think you could do it for the purpose of standardizing or normalizing the number of hours an employee is deemed to have worked when the actual hours worked vary from week to week, in season or out, etc.

The IRS could establish "safe harbor" rules so athletes don't have to punch a time clock, while still being fully compensated for all the hours they are required to work. So, based on rules about how many hours a week an athlete is allowed and/or expected to practice (including things like film study and strength and conditioning), plus how many credit hours a year each must complete times three, how many weeks a year the athlete's season takes, including pre-season and post-season, how many out of town trips they typically must make, etc. how often the total of class time and practice time causes the athlete to work overtime (more than 40 hours in any given week), you could come up with a pretty good estimate of hours worked to be used as a basis for each sport to determine a salary that would comply with minimum wage requirements without a lot of record keeping.

I would use the higher of the federal minimum wage or $15 per hour as the basis for this minimum salary calculation. I chose $15 because that is the highest state minimum wage currently in effect, and you don't want one school to be able to offer a higher salary to potential recruits than any other state. That minimum salary could be adjusted each year as minimum wage rates change over time.

If a football player is presumed to "work" 2,000 hours a year based on the above, his minimum salary would be $30K per year, and he would be allowed to also receive tax free the waiver of his school's tuition, books and fees on top of that salary. He could choose to live on campus by paying the going rate for his dorm room and meal plan or he could choose to live off campus with or without roommates.

Then the only questions that remains are whether an individual school or conference could decide to pay more than the minimum wage and still compete in the NCAA, and could conferences establish their own salary caps.