In this guide7 sections
The July 24, 2025 executive order on college sports did not decide whether college athletes are employees. It told the Secretary of Labor and the National Labor Relations Board to “clarify” athletes’ status, and that question still turns on agency action, court decisions and possibly Congress. For California athletes, some rights already exist under state law, including the right to earn name, image and likeness (NIL) money.
Key takeaways
- The order (Executive Order 14322) directs federal agencies to clarify athletes’ status but does not itself make athletes employees or non-employees.
- A 2024 federal appeals court decision held that college athletes may be employees under the federal wage law if they meet a four-part test.
- California has let college athletes earn NIL compensation without losing scholarship eligibility since September 1, 2021 (Education Code §67456).
- California’s workers’ comp law excludes unpaid amateur student athletes, so a sports injury usually isn’t covered unless you are an employee.
What the executive order says
The order, titled “Saving College Sports,” states that third-party “pay-for-play” payments to college athletes are improper, while allowing payments for the fair market value an athlete provides to a third party, such as a genuine endorsement. It calls for preserving and, where possible, expanding scholarships and competition in women’s and non-revenue sports. It also gave the Secretary of Education 30 days to develop a plan with the Attorney General, the Secretary of Health and Human Services and the FTC.
On employment, the key line directs the Secretary of Labor and the NLRB to “determine and implement the appropriate measures with respect to clarifying the status of collegiate athletes.” An executive order can’t change what a statute or court decision says; it directs how federal agencies use their own authority.
Where the employee question stands
- Labor board: In 2021, the NLRB’s general counsel issued a memo saying some college athletes could be employees with the right to unionize. In February 2025, the acting general counsel withdrew it.
- Federal wage law: In July 2024, a federal appeals court held that athletes may be employees under the Fair Labor Standards Act if they perform services for a school, necessarily and primarily for the school’s benefit, under its control, in return for express or implied compensation or in-kind benefits. It sent the case back to apply that test.
- Direct pay: In June 2025, a federal court approved a national antitrust settlement that, starting July 1, 2025, lets participating schools share up to $20.5 million in the first year directly with athletes. The settlement itself doesn’t make athletes employees.
Why employee status matters
Employees get rights that independent contractors and amateurs don’t: minimum wage, overtime, meal and rest breaks in California, protection from retaliation, workers’ compensation, and in many cases the right to organize. Whether you are an employee depends on the legal test that applies and the facts, not the label a school or company uses (see the Labor Department’s fact sheet). Our guides to employee misclassification and the ABC test explain how California decides this for most workers.
California rights athletes already have
NIL compensation. Under Education Code §67456, California colleges and athletic associations can’t stop a student athlete from earning money from their name, image, likeness or athletic reputation, and earning it can’t affect scholarship eligibility. Athletes may hire a licensed agent or attorney, must disclose NIL contracts to the school, and can’t sign deals that conflict with a team contract.
Workers’ comp. Labor Code §3352(a)(11) excludes a student who plays amateur sports for a public agency or a nonprofit school and receives nothing beyond equipment, travel, meals, lodging, scholarships, grants-in-aid or similar expenses. How that exclusion applies when schools pay athletes directly hasn’t been settled. More on workers’ comp and worker status.
Example (hypothetical): Jordan, a scholarship athlete at a California university, signs an NIL deal with a local car dealer. The school can’t revoke his scholarship for it, but he must disclose the contract and avoid conflicts with the team’s sponsor deals.
Athletes who also work campus or outside jobs are employees in those jobs, with full rights to minimum wage, overtime and breaks. See our California wage orders guide.
Frequently asked questions
Did the executive order make college athletes employees?
No. It directed the Department of Labor and the NLRB to clarify athletes’ status. It did not decide the question.
Can a California school take away my scholarship for NIL deals?
No. Under Education Code §67456, earning NIL compensation can’t affect your scholarship eligibility, though you must follow disclosure and contract-conflict rules.
Am I covered by workers’ comp if I’m hurt playing college sports?
Usually not, if you receive only scholarships and expenses. If you are hurt in a campus job, workers’ comp generally applies.
Can college athletes unionize?
Only employees have union rights under federal labor law, so it depends on whether athletes are found to be employees. The 2021 labor board memo supporting athlete unionization was withdrawn in February 2025.
Talk to a California employment lawyer
Employees First Labor Law represents workers exclusively. We offer free virtual consultations if you aren’t sure whether you are being treated as an employee or a contractor. Contact us or call (310) 853-3461.
This article is general information about California law as of 2026, not legal advice for your situation. Reading it does not create an attorney-client relationship.
