College Athletes May Feel Impact of Feds’ Overtime Pay Reforms

The Department of Labor has proposed a new rule that would increase the number of U.S. workers eligible for overtime pay by 3.6 million.

The proposal—which would revise regulations for determining whether executive, administrative or professional employees are “exempt” or “nonexempt” under the Fair Labor Standards Act (FLSA)—arrives as college athletes advance towards employee recognition.

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Most salaried workers, provided they earn less than $1,059 per week ($55,068 for the year), would be guaranteed overtime pay under the DOL’s proposal. The current limit is $684 per week ($35,568 for the year). The proposed rule is open for public comment for 60 days. After that, the agency will consider feedback and then—months later, most likely—publish a final rule.

In a statement, Acting Secretary Julie Su stressed the 40-hour workweek is a “cornerstone of workers’ rights” and that many Americans work more than 40 hours without being paid time-and-a-half.

“I’ve heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that don’t come anywhere close to compensating them for their sacrifices,” Su added.

The FLSA guarantees minimum wage and overtime pay for many workers, though broad categories of professionals are FLSA exempt—meaning they’re denied FLSA’s protections. How much and how (hourly or salary) a worker is paid are two key factors in assessing FLSA eligibility, with type of work another important criterion. Physicians, attorneys, teachers, scientists, engineers, accountants, actors, musicians and journalists are usually exempt.

Whether a professional athlete is FLSA exempt has triggered litigation.

Until they negotiated a $185 million litigation settlement in 2022, former minor league baseball players and Major League Baseball battled over whether the players were exempt. Part of the legal debate centered on what counts as “work” (time spent on exercise and conditioning, for example) and whether players were seasonal workers, which can lead to non-exempt status.

In 2018, former President Donald Trump signed the Save America’s Pastime Act, which extinguished FLSA protections for minor league players going forward as they pertain to in-season play (not spring training). Earlier this year, MLB and minor league players, through the MLBPA, agreed on their first CBA. It resolved pay and other employment issues.

Overtime pay protections for college athletes are not currently a source of legal debate because those athletes are not considered employees—yet.

There are several ways college athletes could gain recognition as employees in the next year or two.

In Johnson v. NCAA, college athletes argue they‘re FLSA employees. The athletes emphasize they effectively work a 40-hour (or more) week. They insist they should be paid at least the rate of work-study students, some of whom are paid to work at sporting events.

In February, a three-judge panel on the U.S. Court of Appeals for the Third Circuit appeared supportive of the Johnson plaintiffs. The judges surmised that although the NCAA claims college athletes do not expect pay, that likely reflects the NCAA and its member schools agreeing to not pay them.

College athletes could also gain recognition as employees if the NLRB, and later the courts, find that the NCAA, Pac-12 and USC are joint employers of Trojan football and men’s and women’s basketball players under the National Labor Relations Act. Recent conference realignment, with conferences morphing into national leagues and requiring athletes to crisscross the country to play games, make it more likely college athletes will be deemed employees.

If college athletes are employees, their potential eligibility to form a union or multiple unions (such as by school, sport and/or conference) would become a key factor in determining compensation. This is a complex area of law. State laws vary on the eligibility of public sector employees—including those employed at state colleges—to unionize and recognition of employee status under the FLSA would not guarantee unionization rights.

As unionized employees, college athletes could negotiate a CBA with their school and, possibly, their conference and the NCAA. A CBA would address wage and other employment issues and, through what is known as the non-statutory labor exemption, exempt the policies from antitrust scrutiny.

Non-unionized college athletes could sign employment contracts with their schools, though university employees are usually employed by appointment letters that express a salary or hourly rate. Amount and method of payment, along with nature of the work, would be prime factors in assessing if the athletes are FLSA exempt or non-exempt.

If college athletes are non-exempt, they would be owed minimum wage and overtime pay for compensable “work” hours. Those hours would cover games, practices and team travel. They’d probably also include strength and conditioning and possibly study time with a school-assigned tutor or other activities that blend academics and athletics. If a school determines it is too expensive to pay college athletes, it might convert a sport into a club team. Colleges would need to comply with Title IX’s gender equity requirements in paying athletes wages and keeping and cutting teams.

College athletes’ wages would also be subject to state law protections for minimum wage and overtime pay. Athletes at Georgetown, George Washington, American, Howard and other D.C. schools could benefit from D.C.’s minimum wage of $17 per hour, the highest in the country, and overtime pay of $25.50 per hour.

As college sports will likely learn in the coming years, the landscape of labor law has many nuances and is subject to change.

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