texascpa
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So, Northwestern athletes, or is it employees now, are voting for unionization today. The votes apparently will not be counted until the NLRB has a chance to review the recent ruling by regional labor board. It's expected that the NLRB will confirm the regional board's decision on the employee classification.
While it can be argued to death whether these players are employees, underpaid, under-represented, etc. the fact is that the federal government has now made a decision that private university athletes are, in fact, employees of said university and deserve all of the rights and protections of non-athlete employees. It also, of course, opens up the unionization and possible collective bargaining position if the athletes do unionize. Separate from that vote, however, is the fact that they are employees now and forever, unless overturned by federal proclamation or court.
That said, there are few things that will surely come about from all of this. Before touching on those points, I want it made clear that I will never refer to college-aged athletes as "kids" as we continuously see printed and even many on this board consider. They are adults, plain and simple. The biggest difference between "kids" and "adults" is the binding rules around contracts. These adults are making adult decisions through contractual negotiations, and, eventually, enforceable contracts. It's time to start treating them as such.
Now, as far as the immediate and future ramifications of these decisions being made, I hope these adults full understood:
1) Taxation of earnings - I fully expect that the IRS will now require the athletes to report all "earnings", which includes value of the tuition, books, room/board, and could include the value of any medical benefits, depending on the benefits reaching certain value ceilings. Are the athletes ready to incur 25%+ tax bills? The institutions could "gross up" the values to mitigate the financial impact to the employees, but I suspect this will not happen, at least without union contract negotiation. The institute is not required to "gross up" the values other than for calculation Employer FICA taxes.
2) Union Dues - I fully expect that part of any collective bargaining negotiations that the union will want union dues collected from their constituents. I see no way around this. Unions need funding to run their operations and represent their members. Are the athletes ready to pony up this monthly requirement?
3) Medical Coverage - From the athletes and union reps, the key benefit they are looking for is medical coverage AFTER their college career. Athletes already receive medical coverage as part of their university plans, but it's after college that they may need continuing coverage for injuries suffered from their sport. Anyone who's been involved in Retiree Medical (FAS106) plans can attest is that plan liabilities for such coverage can easily run into the 10's of millions of dollars on an annual basis. And medical coverage is not always premium-free for the members. Many plans now require union members to pay into their coverage. Are the athletes ready and willing to pay their "fair share".
4) Strikes - Any benefits that they perceive are owed to them will need to be negotiated. Are the athletes ready to strike and possibly be replaced by scabs, or worst yet, have games and seasons cancelled because of their failed negotiations? For some, this could impact their draft status if they are not able to show themselves on the field. For most, this could warrant cessation of their tuition coverage.
5) Wages - I don't care what the union is saying or the athletes are saying, I predict within 4 years that wages will be negotiated in some form. Again, this will impact athletes' tax basis and other areas.
Now, don't take what I wrote as an argument against treating college athletes as employees, but these are the major considerations that the voters have to consider, and I hope someone has briefed them on these issues. I fully expect Northwestern athletes to vote for unionization, and then the NLRB to certify the regional office decision and then the Union. From there, it will get very interesting.
While it can be argued to death whether these players are employees, underpaid, under-represented, etc. the fact is that the federal government has now made a decision that private university athletes are, in fact, employees of said university and deserve all of the rights and protections of non-athlete employees. It also, of course, opens up the unionization and possible collective bargaining position if the athletes do unionize. Separate from that vote, however, is the fact that they are employees now and forever, unless overturned by federal proclamation or court.
That said, there are few things that will surely come about from all of this. Before touching on those points, I want it made clear that I will never refer to college-aged athletes as "kids" as we continuously see printed and even many on this board consider. They are adults, plain and simple. The biggest difference between "kids" and "adults" is the binding rules around contracts. These adults are making adult decisions through contractual negotiations, and, eventually, enforceable contracts. It's time to start treating them as such.
Now, as far as the immediate and future ramifications of these decisions being made, I hope these adults full understood:
1) Taxation of earnings - I fully expect that the IRS will now require the athletes to report all "earnings", which includes value of the tuition, books, room/board, and could include the value of any medical benefits, depending on the benefits reaching certain value ceilings. Are the athletes ready to incur 25%+ tax bills? The institutions could "gross up" the values to mitigate the financial impact to the employees, but I suspect this will not happen, at least without union contract negotiation. The institute is not required to "gross up" the values other than for calculation Employer FICA taxes.
2) Union Dues - I fully expect that part of any collective bargaining negotiations that the union will want union dues collected from their constituents. I see no way around this. Unions need funding to run their operations and represent their members. Are the athletes ready to pony up this monthly requirement?
3) Medical Coverage - From the athletes and union reps, the key benefit they are looking for is medical coverage AFTER their college career. Athletes already receive medical coverage as part of their university plans, but it's after college that they may need continuing coverage for injuries suffered from their sport. Anyone who's been involved in Retiree Medical (FAS106) plans can attest is that plan liabilities for such coverage can easily run into the 10's of millions of dollars on an annual basis. And medical coverage is not always premium-free for the members. Many plans now require union members to pay into their coverage. Are the athletes ready and willing to pay their "fair share".
4) Strikes - Any benefits that they perceive are owed to them will need to be negotiated. Are the athletes ready to strike and possibly be replaced by scabs, or worst yet, have games and seasons cancelled because of their failed negotiations? For some, this could impact their draft status if they are not able to show themselves on the field. For most, this could warrant cessation of their tuition coverage.
5) Wages - I don't care what the union is saying or the athletes are saying, I predict within 4 years that wages will be negotiated in some form. Again, this will impact athletes' tax basis and other areas.
Now, don't take what I wrote as an argument against treating college athletes as employees, but these are the major considerations that the voters have to consider, and I hope someone has briefed them on these issues. I fully expect Northwestern athletes to vote for unionization, and then the NLRB to certify the regional office decision and then the Union. From there, it will get very interesting.
Chris Emma @CEmmaScout 
