For more background on the state laws and NCAA rules in this space, please see OGC’s articles on the topic of Name, Image, and Likeness (“NIL”) in college athletics.
Not every student-athlete celebrated the new NIL landscape; not everyone can benefit from it. One of the biggest equity problems ushered by these changes is that more than 20,000 international NCAA athletes were left out of the burgeoning NIL industry. This benching represents approximately twelve percent of college athletes and $13.28 million in voided potential earnings for those athletes (see NCAA, opendorse, and FiveThirtyEight).
International students and their educational institutions are subject to a bevy of immigration laws and regulations, all of which are silent regarding NIL but loud when it comes to penalties—including for unauthorized employment. Such penalties may include immediate termination of student visa status, removal/deportation, and the inability to obtain future visa statuses or permanent legal status in the U.S.—including P-1 status for professional athletes (8 U.S.C. § 1182). The Department of Labor may issue additional penalties to the university (and/or the employer) (8 U.S.C. § 1324(a)). Federal regulatory changes in this area are rare, and thus most changes come in the form of policy guidance from the Department of Homeland Security (DHS) and in particular from its subagencies, including the United States Citizenship and Immigration Services (USCIS), Customs and Border Protection (CBP), and Immigration and Customs Enforcement (ICE). Thus far, DHS has stayed relatively silent, other than to note that it “continue[s] to assess the issue of F and M international student-athletes receiving compensation for the use of their name, image and likeness” (Broadcast Message to all SEVIS Users, ICE-SEVP, July 19, 2021).
Of the three visa categories specific to international students (F-1, M-1, and J-1), the F-1 visa is the most common for international student-athletes and deserves a brief background. In addition to requiring a full course of study, the F-1 visa places heavy restrictions on international students, under “the rationale . . . that international students are in the United States to study, not to work.” There is no single definition of “work” or “employment” that covers all situations or visa statuses. In general (some exemptions for off-campus employment), only three employment options are available to F-1 students, the most common of which is on-campus employment for up to 20 hours per week when school is in session (8 C.F.R. § 214.2(f)(9)(ii))). For students wishing to work off-campus or for more than 20 hours per week, additional USCIS authorization is required. That work is typically post-graduate work directly related to the student’s field of study, including Curricular Practical Training or Optional Practical Training (see US Citizenship and Immigration Services Students and Employment). This work is commonly performed as a paid internship in the student’s field or under a one-year work permit after graduation, and as such, does not fit well into NIL opportunities. Absent extreme circumstances, or action by Congress or DHS, no other types of employment is allowed.
International students’ visas limit them to on-campus and limited off-campus employment at their institution (8 C.F.R. § 214.2(f)(9)(i)) or passive income from valid NIL work, and the NCAA Bylaws prohibit payment for work not performed (see NCAA Bylaw 12.4.1(a) and NCAA Interim NIL Policy). Thus, international student-athletes are presented with a quandary: most state NIL laws prohibit institutional payment, arranging, or deal-making for student-athletes’ NIL. That means these students must trade 20 hours per week of NIL income from the school for 20 hours a week in the university library, bookstore, or cafe. And absent clear federal immigration guidance on NIL, the above-described regulatory scheme would preclude payment for any NIL activities in the U.S. where active income is received for work performed. Put differently, if the international student-athlete must do something requested by the entity/individual to get paid for use of their NIL, that would ideally be considered active income and subject to the above-described visa employment restrictions. On the flip side, if the same athlete’s “activity” is merely permitting use of their NIL for compensation, that would seem to violate the NCAA’s admonition concerning NIL compensation for work not performed (see NCAA Interim NIL Policy). Thus, the international student-athlete in the U.S. who wants to, for profit: conduct autograph sessions; launch an apparel line; provide private tennis lessons; start a podcast; become a social media influencer for company X; or join his o-line teammates in a Pancake House NIL deal are prohibited from profiting off their NIL. These athletes must stay on the sidelines while their teammates participate in an estimated billion-dollar NIL industry. They can work at the campus mess hall to feed their teammates who can profit 365 days a year on their NIL.
Accordingly, advice from many athletic departments to international student-athletes has generally been to avoid NIL altogether or participate only if the NIL “work” can be completed entirely in the student-athlete’s home country and the payment can be made and accepted within the home country. (This advice generally covers cash and in-kind payments, which would not include, for example, spokesperson opportunities for a favorite food product from home in exchange for Instagram photo spots.)
But not all avenues to NIL income are closed. Where the international student-athlete is—physically—is critical in the analysis. Without clear federal guidance on NIL, international student-athletes and their U.S. institutions should look to federal agency opinions in the area, labor law, and tax law for additional support. First and foremost, they should ask where the activity is being performed, as there is no U.S. immigration status—and thus no U.S. immigration law restrictions—while an international student-athlete is physically outside the United States. From an immigration law perspective, the location of the student-athlete performing the activity matters far more than the location of the business or payment. As such, in recent weeks international student-athletes have taken to Twitter and other media to forecast future NIL work in their home countries while visiting home or during academic breaks (see @JazShelley on Twitter and Berkley International Student Athlete Sam Alajiki Signs NIL Deal. However, those athletes must be diligent in following the labor and tax laws of the other country.
Second, when considering the federal immigration law, institutions should ask what the international student-athlete proposes to do, and when, where, or to whom pay or compensation accrues. If the international student-athlete voluntarily acts to support a favorite company (posting “I love Voodoo Donuts” on their personal IG account), without a formal arrangement or cash/in-kind payment, this likely won’t be considered “work.” Nor would an international student-athlete who licenses use of her image in her home country, with all profits to her parents or some third party, as U.S. immigration law only restricts the students themselves. In each of these scenarios, however, the student-athlete is made to forfeit immediate economic benefits from such activities, which is the heart of the new NIL rights granted to all her U.S.-citizen teammates.
Third and relatedly, the difference between passive income and active income may be critical. Because current federal immigration law restricts any NIL activities to certain types of income that don’t qualify as work, student-athletes and institutions should ask whether the proposed activity would generate “passive” or “active” income. If the international student-athlete must perform some action (in the U.S.) requested by the company, and obtains compensation for doing so—e.g., wages, tips, commissions, a salary, etc.—that would be considered “active” income and subject to the full panoply of immigration law restrictions. Royalties, however, present a grey area. While generally considered passive income, the level of participation/effort required to achieve those royalties—e.g., creating social media content—might cause the activity to be considered work. The more difficult question is whether royalties to a student-athlete for merely granting permission for Company X to use their NIL is considered active income. What makes this analysis complex and frustrating, however, is that the passive versus active income analysis does not directly overlay with the "quid pro quo" requirement of the NCAA’s bylaws and interim NIL rule. For example, something may be considered passive income that does not require work be performed by the student-athlete themselves. International student-athletes would then be forced to pick their violation: US immigration law or NCAA rule. In the end, DHS is likely to take an expansive view of what constitutes “work,” and even if it doesn’t, NCAA rules would prohibit it. In recent months, some institutions have relied on outside immigration counsel to provide educational guidance to its international student-athletes in this area, with an eye toward developing a middle ground that both complies with immigration law while also enabling a small slice of the NIL pie.
Guidance to international student-athletes and institutions would be much easier if the federal government would step in to provide a solution. There is precedent in this area. One can look to the subcategory added to the P-1 visa (“P-1A”) for international professional athletes and their essential support personnel as a template (8 U.S.C. § 1181, 1184(a)(15)(P)) (see USCIS Policy Manual). Congress, for example, could make a legislative fix: create a statutory exemption to the Immigration and Nationality Act permitting NIL activities by any current NCAA student-athlete with lawful status in the U.S. Even in today’s polarizing political climate, and an election year to boot, more flexible procedures in the U.S. House of Representatives would make such a change realistic. The Senate, on the other hand, would need unanimous consent to hitch onto an existing bill. Alternatively, DHS could provide a regulatory fix through formal rulemaking: updating the 1990s-era definitions of “student activity” and “permissible work” for F-1 visa holders as it pertains to NIL. Finally, because the passive/active income distinction creates a grey area when it comes to royalties, a formal regulatory change may not be necessary. As such, the quickest solution would be for DHS to provide informal regulatory guidance, through a policy memorandum, that F-1 students could engage in any NIL activity authorized under a state statute. Indeed, there is now a petition calling for such a change (see Change.org Petition for Name, Image, and Likeness Rights for International Student-Athletes).
For additional OGC Articles in this area, see generalcounsel.uoregon.edu/news
—By Bryan Dearinger, Associate General Counsel