NCAA proposes "Power" schools directly pay out NIL deals

NCAA proposes "Power" schools directly pay out NIL deals - Printable Version

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RE: NCAA proposes "Power" schools directly pay out NIL deals - Goose - 12-07-2023

(12-07-2023, 12:54 PM)82lsju Wrote:
Quote:In a landslide vote, 94% of Stanford’s graduate worker voters said ‘yes’ to being represented by the Stanford Graduate Workers Union (SGWU), according to an email announcement on Thursday. The final vote count was 1639 to 108, with a turnout rate of just over half.

https://stanforddaily.com/2023/07/06/stanford-graduate-workers-unionize/

How is that possible? Slaves can't vote, let alone unionize :-).

RE: NCAA proposes "Power" schools directly pay out NIL deals - PersonalLegend - 12-07-2023

(12-05-2023, 05:57 PM)jacket3ree Wrote:
(12-05-2023, 01:36 PM)lex24 Wrote:
Goose dateline='[url=tel:1701796673' Wrote: 1701796673[/url]']
IMO the University directly paying players to participate in athletics unquestionably would make them employees of the University. It would end any pretense that they are amateurs. It in no way could be connected to their "name, image, or likeness". It would be pay for service, period. I am sure the IRS and the State of California would see it that way.

The follow-on consequences would be "interesting". How long would athletic departments remain tax exempt, and would subsidizing sports that don't make money be an allowable cost of doing business? How does that fit with Title IX requirements? What if compensation was deferred and you had to "vest" by remaining "employed"? How does the portal work then :-). IMO, too ugly to contemplate.

First, I disagree. They’re not being paid for their services. They’re being compensated for the universities use of their name and likeness. It’s no different than if Stanford started marketing using Reese Witherspoon. She’d be entitled to be paid for the use of her name and likeness. Doesn’t make her an employee.

Second, even if I’m wrong – which is quite possible- the power five conferences will have scores of lawyers analyzing this. No way they’re going to go that route if there’s even a colorable claim that this turns the athletes into employees.

I don't think you are wrong. Isn't this like every contract I sign? 'Consultant is an independent contractor and in no way shape or form considered employees of [client]?' We get paid and 'work' for the client, but we don't work for the client.

Just because your contract says you aren’t an employee doesn’t make it so. There are very specific IRS tests. I’m sure one of the smart people here can google them.

If it walks, quacks, and flies like a duck, the IRS is gonna call it a duck. Doesn’t matter if the contract says it’s a frog.

Get your popcorn ready.

RE: NCAA proposes "Power" schools directly pay out NIL deals - Mick - 12-07-2023

(12-07-2023, 06:58 PM)PersonalLegend Wrote:
(12-05-2023, 05:57 PM)jacket3ree Wrote:
(12-05-2023, 01:36 PM)lex24 Wrote:
Goose dateline='[url=tel:1701796673' Wrote: 1701796673[/url]']
IMO the University directly paying players to participate in athletics unquestionably would make them employees of the University. It would end any pretense that they are amateurs. It in no way could be connected to their "name, image, or likeness". It would be pay for service, period. I am sure the IRS and the State of California would see it that way.

The follow-on consequences would be "interesting". How long would athletic departments remain tax exempt, and would subsidizing sports that don't make money be an allowable cost of doing business? How does that fit with Title IX requirements? What if compensation was deferred and you had to "vest" by remaining "employed"? How does the portal work then :-). IMO, too ugly to contemplate.

First, I disagree. They’re not being paid for their services. They’re being compensated for the universities use of their name and likeness. It’s no different than if Stanford started marketing using Reese Witherspoon. She’d be entitled to be paid for the use of her name and likeness. Doesn’t make her an employee.

Second, even if I’m wrong – which is quite possible- the power five conferences will have scores of lawyers analyzing this. No way they’re going to go that route if there’s even a colorable claim that this turns the athletes into employees.

I don't think you are wrong. Isn't this like every contract I sign? 'Consultant is an independent contractor and in no way shape or form considered employees of [client]?' We get paid and 'work' for the client, but we don't work for the client.

Just because your contract says you aren’t an employee doesn’t make it so. There are very specific IRS tests. I’m sure one of the smart people here can google them.

If it walks, quacks, and flies like a duck, the IRS is gonna call it a duck. Doesn’t matter if the contract says it’s a frog.

Get your popcorn ready.

WAY more than you want to know about independent contractors vs. employees in the great State of California, featuring AB 5 from 2019

https://www.dir.ca.gov/dlse/faq_independentcontractor.htm

RE: NCAA proposes "Power" schools directly pay out NIL deals - jonnyss - 12-07-2023

(12-05-2023, 08:04 PM)Goose Wrote:
(12-05-2023, 07:43 PM)jonnyss Wrote:
(12-05-2023, 05:17 PM)paloalto Wrote: If college athletes are classified as employees; California Assembly Bill 5, effective January 2020, forces the employer to treat them as all other employees, not as independent contractors. That would mean all benefits paid to Stanford employees would also have to be paid to the athletes. This would become unworkable in many ways. There would have to be some amendments made to California laws about employees.

what stanford staff benefits worry you? isn't health insurance the most costly benefit? all stanford students are already required to carry health insurance. starting in 2024, both staff and students have aetna health insurance; ok, stanford staff can pay higher premiums for a larger provider panel, and students only have access to the smaller epo panel, but i don't think that's much more costly to the school. certainly athletes deserve disability insurance if they don't already have it. 3 weeks vacation? they already have that. 12 weeks unpaid fmla (family medical leave act)? don't athletes already get to take time off for illness and family emergency? doesn't seem prohibitive.

now, title 9, that does seem a hurdle - or a boon to female athletes, depending how the universities play it.
Stanford would have to pay for workman's compensation, which isn't the same thing as health insurance. That could be quite expensive for athletes who are well-paid. They would also have to pay half the FICA, which is another considerable expense. Equally importantly, many state regulatory agencies, such as CAL OSHA would gain jurisdiction on workplace safety etc. Obviously the various unions would also be able to organize the athletes. In short, it would be a majorly expensive undertaking at best. At worst, it could be a litigious nightmare.

It is not that it can't be done. It can, but only if the athletic departments function as a business. They don't now.

if i recall correctly, when an employee gets workers comp, he or she doesn't get salary; savings in salary largely offset the payment (or the insurance to cover payments). in terms of the medical treatment part of workers' comp, doesn't stanford already pay medical bills for athletes when they are injured and can't "work?"

yes, fica would be in addition.

RE: NCAA proposes "Power" schools directly pay out NIL deals - Goose - 12-08-2023

(12-07-2023, 10:32 PM)jonnyss Wrote: if i recall correctly, when an employee gets workers comp, he or she doesn't get salary; savings in salary largely offset the payment (or the insurance to cover payments). in terms of the medical treatment part of workers' comp, doesn't stanford already pay medical bills for athletes when they are injured and can't "work?"

I am not sure what you mean here. Clearly an employee gets paid, either a salary or hourly. Workman's Compensation Insurance is specific insurance with specific mandated coverage for on-the-job injuries. It includes additional things like disability insurance, loss of wages benefits etc. This insurance is in addition to any "normal" health insurance employers may (or may not) provide and is required by law.

That is a major reason why you see questions on the description of your complaint when you go for medical care asking if the problem/injury is work-related. A whole different insurance process comes into play if it is. Right now, since playing football isn't "work", athletes can be covered by "regular" insurance. If they are employees, the rules change. Workman's Comp is an additional required expense Stanford would have to pay. It ain't cheap.

RE: NCAA proposes "Power" schools directly pay out NIL deals - jacket3ree - 12-08-2023

Thanks for the education everyone.

Yeah, our independent contractor status as a California corporation is really not analogous. This is more like a contract employee issue.

So, what is the ACC salary cap these days?

RE: NCAA proposes "Power" schools directly pay out NIL deals - cardcrimson - 12-08-2023

What's next?

Breaking news: Stanford trades Ayomanor and Bachmeier to Alabama for Milroe and a recruit to be named later

RE: NCAA proposes "Power" schools directly pay out NIL deals - jonnyss - 12-08-2023

(12-08-2023, 08:07 AM)Goose Wrote:
(12-07-2023, 10:32 PM)jonnyss Wrote: if i recall correctly, when an employee gets workers comp, he or she doesn't get salary; savings in salary largely offset the payment (or the insurance to cover payments). in terms of the medical treatment part of workers' comp, doesn't stanford already pay medical bills for athletes when they are injured and can't "work?"
I am not sure what you mean here. Clearly an employee gets paid, either a salary or hourly. Workman's Compensation Insurance is specific insurance with specific mandated coverage for on-the-job injuries. It includes additional things like disability insurance, loss of wages benefits etc. This insurance is in addition to any "normal" health insurance employers may (or may not) provide and is required by law.

That is a major reason why you see questions on the description of your complaint when you go for medical care asking if the problem/injury is work-related. A whole different insurance process comes into play if it is. Right now, since playing football isn't "work", athletes can be covered by "regular" insurance. If they are employees, the rules change. Workman's Comp is an additional required expense Stanford would have to pay. It ain't cheap.

exactly! workers' comp covers loss of wages. so the employer makes back a good portion of the premium by not paying wages.

after 4 decades of stonewalling (recall that NCAA lawyers invented the term "student athlete" in court filings in the 50s to get out of covering paralyzed athletes), the NCAA now requires that schools pay for long-term, catastrophic injury coverage (yay!). the cost of those premiums should go down as disability insurance covers much of the same territory.

yes, there are extra costs, but i believe offsets take away some, even much, of the bite.

RE: NCAA proposes "Power" schools directly pay out NIL deals - Goose - 12-08-2023

(12-08-2023, 09:46 PM)jonnyss Wrote: exactly! workers' comp covers loss of wages. so the employer makes back a good portion of the premium by not paying wages.

Only if he is unlucky enough to have lots of injuries. Like all insurance, it is great to have when you need it, but just a cost when you do not.

Quote:after 4 decades of stonewalling (recall that NCAA lawyers invented the term "student athlete" in court filings in the 50s to get out of covering paralyzed athletes), the NCAA now requires that schools pay for long-term, catastrophic injury coverage (yay!). the cost of those premiums should go down as disability insurance covers much of the same territory.

yes, there are extra costs, but i believe offsets take away some, even much, of the bite.

This would be true if it wasn't necessary to still insure students for accidents that happen that are NOT part of their "work". In all cases Stanford will end up buying two policies from different entities. The non-work related insurance is competitive free enterprise in terms of coverage options and rates. The workman's comp coverage is mandated by the state. You can be self-insuring, but if you are you have to meet the state requirements. Having two policies instead of one is always going to be more expensive because the risk pools overlap. It is made much worse by the State mandates that restrict what the insurers can do. It also means that in litigation the State will be a party, which raises insurance costs considerably. Workman's Comp is a considerable expense even in relatively "safe" business. In the case of football players (as with construction workers), it is even more costly.

RE: NCAA proposes "Power" schools directly pay out NIL deals - Sunnysideup - 12-09-2023

So many complicated elements if student-athletes are designated as regular university employees* and the universe shifts.

I am just going to ignore the contractor idea -- it would be litigated quickly and I'm pretty confident wouldn't have legs. Unless Congress moved to somehow create a new special protected job category of "student athlete," that was NOT subject to federal requirements (and each state recognized such job category type), the notion that the contractor idea would fly is pretty thin, as is the notion that an "employee" would be exempt from federal protections. Additionally, EACH STATE would have to essentially move to approve such exceptions. Can't see this happening.

FLSA has pretty strict (and highly litigated) regulations regarding overtime pay and what is construed as work that must be compensated for hourly employees. What is the definition of "work hours" for a student-athlete? Practice time? Games? Getting dressed in the locker room? Press conferences after games? It is likely that many legal experts would consider the extraneous hours a student-athlete puts into things like team work-outs (that are not practices), team meetings, recovery time items (such as locker room PT/trainer items), team travel to/from games, etc. as work. Even if offered to an employee as "optional" if the employee completes it/does the work, it must be compensated (If you're wondering why this is, imagine if Target made the claim that when a Target manager asked employees if they wanted/could/optionally work some hours on a Sunday afternoon, and they voluntarily showed up and did it, that it wasn't paid work because it was "optional"..."optional" work is still paid work, legally).

Hours would need to all be documented and compensated and it's clear it would hit the OT limit in season for all teams (40 hrs/wk).

Many states have their own overtime regulations, too. For example, California requires overtime pay once an employee has exceeded 8 hours in a single day. California also has the HIGHEST minimum overtime exemption salary in the country BY FAR ($64,480). (For contrast, Alabama doesn't have its own overtime exemption salary -- so the federal requirement, $35,568/year, is the salaried minimum there). So the alternative to paying overtime (which would be $$$$) to designate student-athletes as overtime exempt employees, would require paying them a minimum of $64k/year in California.

Plus all of these kinds of questions, which would have legal and financial implications....

Does going to class and doing homework (to remain NCAA eligible) count as "work"? Assuming a stipulation of a student-athlete's employment is that they remain NCAA eligible, I could see this claim happening (not suggesting I agree with it though!).

Would student-athletes only be an employee during their practice/game season? What about "off-season" practices? Can you imagine the mess if a student-athlete - "not currently employed" - is injured during a summer work-out session with friends? Do colleges have employees who cannot perform?

I seem to recall there is a federal stipulation in financial aid legislation against colleges "paying" students to enroll (I'm not referring to merit scholarships here) when federal loans or grants are involved - e.g. a student's "refund" / aid cannot exceed the published cost of attendance. From what I understand this was put into place years ago as essentially an anti-bribery/fraud prevention regulation. Now there would be significant implications involving student-athletes who are using Pell grants, receiving state grants (places like Stanford automatically apply for/receive/"process" these kinds of grants for many students behind the scenes, so many students don't even know that part of their Stanford financial aid grant is being funded in part by these sources).

There are also, more bureaucratic, university-focused elements. For example, universities would likely need to establish entirely new sets of requirements/benefits for student-athletes, as their existing policies would not fit with the concept of a student-athlete, e.g. paid vacation time. Under California law, PTO (if offered, which it is not required to be offered), is considered equivalent to compensation, e.g. it can not expire and it has to be paid out at discharge (this is an extreme oversimplification of a complicated statute/scenario, but the general gist). Do student-athletes accrue vacation? How is it paid out? What about sick time? If they *don't* accrue vacation, what happens if a student needs to miss a practice for some reason? It's just unpaid time? That's how it would work in the "real world," but I can imagine the outcry in some corners.

EEOC regulations would also apply to student athlete jobs (aka student athletes). That would be fun.

If a player is injured during a game (or heck, even a practice), and can't practice or play in the short term, they could be eligible for short-term disability. California is a state that requires short-term disability insurance offered by employers (note that Alabama law does not). One cannot claim short-term disability AND "work" -- how does this fit with the way college athletics works? Can you imagine how rapidly such claims would happen?

University gear and meals -- outside of those provided during the course of paid working hours (or required for the position, e.g. uniform) -- could be considered a fringe benefit by the IRS and could be subject to taxation.

Student-athletes would be taxed on their earnings - which may seem obvious to all of us, but their tax liability may open up another can of worms (imagining some naive 19-year-olds here).

*Many students do currently work for their universities -- shelving books in the library, as a research assistant for a professor, as an RA, working in the dining hall, whatever. Often these are work-study jobs supported in whole or part by federal work-study funding or they are funded in-kind or by block payment. Even if they are not, they are generally <20 hrs. week (8-12 is most common) and usually exempted from university HR policies.