For decades, the National College Athletics Association (NCAA) wielded a deceptively simple argument against student athlete employment claims: college athletes are amateurs, and amateurs by definition cannot be employees; therefore, college athletes are not employees. While this “amateurism myth” was once dominant, it has come under increasing scrutiny over the last several years. And now a new proposed bill promises the largest federal overhaul of college athletics in NCAA history.
Recent court and administrative decisions have signaled that it’s only a matter of time before college athletes are recognized as employees with full labor protections. The Protect College Sports Act (PCSA) would make some headway in that regard, swapping a chaotic patchwork of state laws and endless litigation for a single national rulebook. But on the crucial question of whether college athletes are employees, it remains silent, effectively allowing the amateurism myth to remain influential. While potentially helpful as the latest step in student athletes’ long and winding road to employee status, the PCSA would not necessarily close the book on this broader question.
Employees or Not Employees?
During a labor dispute in 2015, the National Labor Relations Board found that a particular labor unit—Northwestern University’s scholarship football players—were employees under the National Labor Relations Act. While the decision seemed to strengthen the claim that college athletes are employees, the NLRB chose not to assert jurisdiction over all student athletes, and in effect punted the larger question to future decision-makers.
Employment status is primarily outlined by the federal Fair Labor Standards Act (FLSA), which is relatively straightforward: if an individual is an employee, they are entitled to minimum wage and overtime protection. The FLSA contains no exception for “amateurs.”
The scholarship athletes in Northwestern earned roughly $61,000 annually for services—seemingly above minimum wage. But college football is often a full-time job for at least five or six months, plus a multi-month offseason schedule. Conditioning, practice, travel, games, film study, and mandatory meetings routinely exceed 40 hours weekly during the regular season. Under FLSA standards, any hours beyond 40 per week trigger overtime obligations. Yet the effective hourly wage rates drop significantly during peak competitive periods, potentially below minimum wage thresholds.
Recent Legal Developments
Since the NLRB decision, a significant federal appeals court decision, congressional action, and even a presidential executive order have entered into the debate. Each one has had an effect on the question, either moving the needle toward employee status or further away from it.
- A court decision: In July 2024, the Third Circuit Court of Appeals in Johnson v. NCAA shattered the NCAA’s long-argued definition of amateurism. The court established a four-prong “economic realities” test for determining whether a college athlete could bring forward a claim under the FLSA:
- The athlete performs services for another party (in this case, their institution);
- The services performed are primarily for that party’s benefit;
- The athlete’s services are under that party’s control; and
- The athlete receives express or implied compensation or in-kind benefits.
Although the Third Circuit’s decision didn’t solve the employment classification question, it rendered the “amateur” label legally irrelevant.
- A congressional settlement: to resolve multiple lawsuits against the NCAA that challenged athlete compensation under antitrust law, Congress reached a $2.8 Billion settlement, authorizing limited athlete compensation through direct university payments, starting July 1, 2025. Schools could now distribute approximately $20.5 million annually per Division I institution for at least ten years, though which teams and athletes get paid is at each school’s discretion. This direct compensation is in addition to any Name-Image-Likeness (NIL) payments each athlete may receive. The settlement, however, does not establish employment status or provide worker protections.
- An executive order: looking to throw the NCAA and member institutions a lifeline, the Trump administration took the extraordinary step in January 2025 of rescinding, through executive order, an NLRB memo that suggested student athletes could be employees. This reversal did not change the legal analysis—courts, not the NLRB, ultimately decide FLSA claims—but it did signal political hostility toward employment classification at the administrative level. Practically, this means we can expect slower NLRB action on unionization, but continued litigation over wage and hour claims.
A New Law on the Horizon
Introduced in May 2026, the PCSA aims to federalize college sports by creating a single national NIL standard that preempts dozens of conflicting state laws, making permanent the congressional settlement’s cap on revenue-sharing and allowing schools and conferences to collectively negotiate media rights. The PCSA would also hand the NCAA a limited antitrust exemption so it can enforce uniform rules on compensation, eligibility, transfers, recruiting, and agent conduct without being litigated on all fronts.
For college athletes, the PCSA is a genuinely mixed bag. On the plus side, it guarantees nationwide NIL rights, protects scholarships from being pulled over performance or injury, extends medical coverage well past a player’s final game, guarantees the freedom to transfer schools at least once without penalty, and institutes a 5% cap on agent fees, among other perks. There is even discussion of adding a new “retention pool” of roughly $22.5 million per school to use to keep upperclassmen from leaving, plus another $5 million earmarked for women’s and non-revenue sports.
But the gains come with significant tradeoffs. Athlete pay stays capped, several of the protections are modest or set to expire, and the bill leaves the biggest risk to colleges—employee status for college athletes, along with minimum wage and overtime protections, workers’ compensation, and collective bargaining—entirely off the table. Essentially, the PCSA caps what athletes can earn while refusing to regulate coaching salaries, buyouts, and facility arms races. In doing so, the PCSA asks the players to subsidize everyone else’s spending.
Although the bill would resolve confusion, it intentionally maintains the status quo when it comes to the employment status question, and does so at the very moment when courts are moving closer to recognizing student athletes as employees. Congress is treating college sports like the multibillion-dollar professional enterprise it is, but is refusing the one hallmark that makes those arrangements lawful in every other scenario: a genuine bargaining relationship with the workforce. In professional sports, salary caps and movement rules survive antitrust scrutiny only because players collectively negotiate those rules through independent unions. The PCSA hands the NCAA and its member institutions the benefits of the professional model without collective bargaining, shared governance, or accountability, effectively allowing the “amateur” model to continue.
The Road Ahead
If the PCSA becomes law, the legal trajectory of the college athlete conundrum remains clear despite political resistance. Since the FLSA's statutory logic is difficult to escape, district courts applying Johnson's framework will likely find athlete employment status in revenue-generating sports, though court decisions may still take years. The case for athlete employment status rests on three pillars:
- Economic reality: scholarship athletes receive substantial compensation, provide services generating billions in institutional revenue, and work under pervasive institutional control. These are hallmarks of employment, not student life.
- Statutory clarity: the FLSA contains no amateurism exception. Federal wage and hour law applies to all employees regardless of competitive level, sport, or institutional affiliation. Courts interpreting the statute must apply it as written.
- Labor justice: the NCAA's system extracts enormous value from athletes while prohibiting meaningful compensation beyond scholarships and NIL arrangements. This creates artificial scarcity benefiting universities and corporate partners while athletes bear injury risks and career uncertainty with minimal protections. Employment status would ensure minimum wage compliance, overtime compensation, workers' compensation, and collective bargaining rights—modest protections that competitive markets already provide.
College athletes being treated as employees would also create a cascade of consequences for their schools and even each other. Minimum wage and overtime obligations for full-time players would cost hundreds of millions, which may trigger tuition bumps for all students—and some universities may exit high-revenue sports entirely. Discrepancies regarding non-revenue sports could grow as employment status may not apply universally, resulting in decreased institutional investment. We might even see a shift in broadcasting rights and ticket prices.
While the courts inch towards recognizing college athletes as employees, Congress has been busy drafting a different ending with the PCSA. At the end of the day, institutions are paying students aged 18-22 for athletic services, but calling it something else to avoid labor law obligations—precisely a scenario that employment law exists to prevent. College athletes who provide services generating billions in revenue deserve the same wage protections all other workers enjoy.
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