College Athlete Bill Grants Employee Status and Collective Bargaining Rights, but Protects Tax and Financial Aid Status

The College Athlete Right to Organize Act is designed to fundamentally change the relationship between major college sports programs and their athletes. This bill amends the National Labor Relations Act (NLRA) to classify college athletes at public institutions as employees if they receive any form of direct payment (like a scholarship or grant-in-aid) that requires them to play a specific sport (SEC. 3).

This is the big deal: If you’re an athlete getting that scholarship tied to your sport, you are now legally considered an employee under federal labor law. This grants you the right to organize, form a union, and collectively bargain with your college or conference over things like working conditions, safety, and compensation. Essentially, it brings the labor rights enjoyed by professional athletes and most other American workers into the world of big-time college sports, aiming to fix the power imbalance that Congress notes has long existed between institutions and athletes (SEC. 2).

The Employee Status, Minus the Tax Headaches

The authors of this bill clearly anticipated the immediate concern: If athletes are employees, does that mean their scholarships become taxable income, and do they lose federal financial aid eligibility? The answer, thanks to a specific section of the bill, is no, at least not automatically (SEC. 4).

The bill explicitly states that receiving this new "direct compensation" won't suddenly make it taxable income if it wasn't before. It also ensures that receiving this compensation won't change how your income is calculated for federal financial aid programs, like Pell Grants. This is a crucial detail for any athlete relying on aid: the bill grants labor rights without immediately triggering a massive, negative tax or financial aid consequence. It’s the policy equivalent of having your cake and eating it, too, at least on the tax front.

The NLRB Takes the Field

With college athletes now potentially unionizing, who handles the labor disputes? The National Labor Relations Board (NLRB), the federal agency that oversees collective bargaining, is given full authority here. The NLRB will be responsible for defining which groups of athletes can form a union—called a bargaining unit (SEC. 3).

In a move that could significantly change the landscape of negotiations, the bill allows the NLRB to recognize multiemployer bargaining units. This means athletes across multiple schools within the same athletic conference could potentially unionize and bargain together as one large group, provided the athletes’ representatives agree to it. This streamlines negotiations but puts a huge new burden on athletic conferences, which will now have to negotiate labor contracts that affect all their member schools simultaneously.

Who’s at the Bargaining Table?

This bill directly impacts public colleges and universities, who will now face new labor obligations. The athletes themselves gain significant leverage, moving from being “amateurs” subject to institutional control to workers with the power of collective action.

One interesting detail is the explicit exclusion of the NCAA from the definition of an “intercollegiate athletic conference” for bargaining purposes (SEC. 3). This means the conferences themselves—like the Big Ten or the SEC—will be the primary bargaining counterpart for the athletes, not the NCAA. This structure could limit the NCAA’s ability to dictate labor terms across the board, potentially decentralizing control over athlete compensation and working conditions.

For the rest of us, this bill marks a major shift in how we view college sports. If passed, it ensures that the people generating billions of dollars in revenue finally get a seat at the table to negotiate their working conditions, setting a precedent that could ripple through every major university athletic department in the country.