The intersection of NIL (name, image, likeness) and immigration law has become one of the most pressing and complex challenges facing collegiate athletics today. The provisionally approved settlement in House v. NCAA, which proposes direct revenue-sharing of $21–22 million per school, coupled with the growing number of States that have passed laws authorizing higher education institutions to make direct payments to their athletes, has transformed what was once a niche issue into a major compliance concern for universities nationwide. For institutions with international student-athletes, this new reality brings significant risks that demand immediate attention.
From Student Issue to Institutional Liability
Historically, NIL-related immigration compliance was seen as a concern only for individual athletes. If international student-athletes violated the terms of their F-1 visa, the consequences—visa revocation, deportation, or reentry denial—were theirs alone to bear. Universities operated largely on the sidelines, uninvolved and unaffected. The proposed House settlement, or any other legal mechanism through which direct payments could come about, however, shifts the dynamic entirely. With schools now positioned to directly compensate athletes, they face heightened exposure to legal risks, including civil and criminal penalties, reputational harm, and potential loss of federal funding, if they directly compensate international student-athletes on their rosters who are not authorized for employment by the Department of Homeland Security. Fundamentally, these risks depend on the legal interpretation of “employment,” with many institutions relying on the interpretations of the DOL and the IRS rather than the more restrictive – and the more relevant for the purposes of the question at hand – definitions under the immigration regulations.
Workarounds That Don’t Work: “Independent Contractor” Agreements
Many universities hope to mitigate these risks by structuring payments to athletes as independent contractor agreements, avoiding the “employment” label to sidestep compliance challenges. Potential “misclassification” issues under labor law aside, immigration law makes no distinction between independent contractors and employees—both models require proper work authorization to perform services on US soil.
The independent contractor approach not only fails to protect international student-athletes but also leaves universities vulnerable to liability under Department of Homeland Security (DHS) regulations. Universities can be charged with “knowing hire” violations even if the compensated athletes are not W-2 employees of the school, but are instead independent contractors reporting income on IRS Form 1099. This is because under the Immigration Reform and Control Act of 1986 (IRCA), “a person or other entity who uses a contract, subcontract, or exchange…to obtain the labor of an alien in the U.S. knowing that the alien is an unauthorized alien…with respect to performing such labor, shall be considered to have hired the alien for employment in the United
States in violation of [IRCA’s hiring provision].” Knowing hire violations expose institutions and its administrators to both civil and criminal liability.
The Fallacy of “Passive Income”
Some universities also argue that direct payments to international athletes can be classified as passive income, such as royalties, to avoid labor law implications. While appealing in theory, this argument unravels because payments are expected to be distributed by the institutions solely or primarily to athletes on the rosters of revenue-generating and/or to be tied to athletic performance, with the highest-performing players or most-prized recruits receiving more than others on the same team. Immigration authorities evaluate the reality of an arrangement, not its label, and performance-based compensation will likely be classified as labor requiring employment authorization.
Moreover, to the extent that the independent contractor “passive income” agreements require athletes to make team appearances, sign autographs, or perform other services outside of training for and playing their sport, the income would not be considered passive. Immigration law does not provide the same protections as the IRS Code for non-material activities, therefore any amount of labor on US soil will require employment authorization.
The Problem With Excluding International Athletes
Another workaround some universities are considering is paying only domestic athletes while excluding international athletes on the same roster from payments. An alternative version of this strategy is to allow international student-athletes to choose whether to accept payments. While this might seem like a simple solution, it introduces a host of new problems. Unequal treatment based on citizenship or visa status raises concerns of national origin discrimination. Moreover, immigration law contains a longstanding principle that employment authorization cannot be circumvented by “volunteering” for roles that are typically compensated. The fact that domestic athletes are paid establishes that participation in such a sport constitutes labor that is usually compensated, leaving international athletes and the universities that rely on this strategy exposed to legal scrutiny.
The Need for Advocacy: A National Policy Vacuum
The harsh reality is that there is currently no viable mechanism to protect universities from these legal pitfalls while remaining compliant with labor and immigration laws. Unlike domestic athletes, who benefit from a legal landscape that recognizes their right to commercially capitalize on their NIL, international athletes and the universities supporting them are left in a gray area.
So far, the federal government has dismissed this as an issue of entitlement for a select few athletes, pointing to the relatively low number of NCAA athletes who have managed to earn significant sums of money through NIL opportunities. But this perception fails to recognize the broader implications. With the House v. NCAA settlement and other legal efforts that bring us closer to the classification of athletes as employees, this is no longer just a question of fairness and equitable
access for international athletes—it is a matter of institutional compliance with serious consequences for universities.
Universities Must Lead the Charge
To address this growing issue, universities must step forward and advocate for change, making it clear to Congress that this is not just a niche issue affecting a handful of athletes but a pressing institutional compliance challenge with far-reaching consequences. Federal lawmakers have been content to dismiss NIL concerns as issues of entitlement for a small group of student-athletes. Universities need to change that narrative and communicate the critical need for legislative solutions that address these challenges comprehensively.
Proactive Steps to Protect Universities and Athletes
In the absence of immediate policy changes, there are limited steps universities can take. One possible approach is transitioning international athletes to P-1A visas for internationally recognized athletes. However, certain recent legal developments threaten the ongoing availability of P-1A visas to international student-athletes.
House v. NCAA and similar legal efforts aimed at the classification of student-athletes as employees are reshaping the landscape of collegiate athletics, and the stakes for universities with international athletes have never been higher. Workarounds such as independent contractor agreements, excluding international athletes, or reclassifying payments as passive income are not sustainable solutions. They fail to address the underlying compliance challenges and, in many cases, create new risks.
The path forward requires universities to act decisively—not only to protect their athletes and their own institutions but to push for the federal legislation needed to provide a clear and equitable framework for student-athlete compensation that does not exclude international students. This is no longer just about fairness or opportunity for international student-athletes. It is about protecting the institutions and safeguarding the future of collegiate athletics in a rapidly changing legal and regulatory environment.
By Ksenia Maiorova, Esq., Partner and Individual and Olympic Sports Practice Group Leader, Green & Spiegel, LLC and John W. Mazzeo, Senior Director, Associate General Counsel, Vertical Screen, Inc.