Should College Athletes Want To Be Employees?
Beware Of What You Wish For
On Wednesday, a National Labor Relations Board official ruled that Northwestern football players are not “student-athletes,” but are employees of Northwestern University and can unionize.
NLRB regional director Peter Sung Ohr cited to the players’ time commitment to their sport and the fact that their scholarships were tied directly to their performance on the field as reasons for granting them union rights. He determined that the players can hold a vote on whether they want to be represented by the union, the College Athletes Players Association.
Next Step: Unionization
Should the players decide to join the union, they will have to pay dues to the union. The union would then notify Northwestern that it would like to enter into negotiations over the contracts of these employees- formerly known as students-athletes.
As employees, the players will not only be entitled to salary, they will be entitled to health benefits, health insurance, and perhaps even pensions or retirement plans. They may be entitled to other forms of insurance including disability insurance or worker’s compensation. Plus, they may be able to negotiate over their working conditions. No more 6 a.m stadium steps after losses.
Fewer Chances for Scholarships
Treating football players as employees immediately puts a huge financial strain on the University’s budget. Most athletic departments at major colleges lose money. While the football and basketball programs make a profit, the rest of the athletic department relies on that profit to finance the other, money losing sports.
The Northwestern Football team has 85 scholarship football players on its roster. If the employee benefits cost the University $20,000 per player/per year, the football program just got $1.7 million more expensive. This increase in expense could definitely cause many colleges to reconsider whether to have a football program.
But, the added costs on the University to treat the football players as employees may not stop at the football players. Under federal law in the form of Title IX, all athletes must be treated equally. That means that all the student athlete employees would be entitled to the same benefits. Now, the University will hit a huge financial benefit as many colleges have upwards of 200 scholarship athletes.
This enormous burden could cause colleges to drop football and many other sports. As a result, far fewer athletes will have the opportunity to gain a college education without cost or student loans burdening them for years to come.
Beware the Tax Man
Most importantly, no one is talking about the biggest ramification of student athletes becoming employees. THEY MAY HAVE TO PAY TAXES. And not just taxes on any stipend they receive, but taxes on the value of everything they receive: the stipend, the tuition, room and board, books, and other fees. The total compensation could easily total $60,000 to $80,00 a year.
The decision by the NLRB found that the Northwestern football players are being compensated up to $76,000 a year. In addition, a decision by the NLRB would appear to mandate that the IRS will likewise classify student athletes as employees. But, the more student athletes act like employees, the more likely the IRS could make that decision.
Are student-athlete employees prepared for a $8,000 to $10,000 tax bill from the federal government and a smaller bill from the state at the end of each season?
The decreased chances of earning a scholarship, the tax bill and the union dues should cause all student athletes to think twice about the “employee” status.
