MultiState Insider

Employment & Labor, Legal

How State Legislation Transformed College Athlete Pay (State NIL Laws 101)

April 29, 2026 | Geoff Hawkins

California's Fair Pay to Play Act (SB 206) in 2019 launched a wave of state NIL laws college athletes can now benefit from, allowing them to profit from their name, image, and likeness for the first time in NCAA history. Following California's lead, 35 states have enacted name image likeness legislation through statutes or executive orders, creating a patchwork of rules that vary on disclosure requirements, permissible industries, and whether high school athletes can participate. The 2025 House v. NCAA settlement introduced college athlete compensation laws that allow schools to directly pay student athletes up to $20.5 million annually, separate from NIL deals, with most funds going to football and men's basketball programs. New challenges have emerged around state AI policy NIL issues, including income tax liability for athletes earning multimillion-dollar contracts and questions about their employment status, prompting seven states to consider tax exemptions for NIL earnings. President Trump's recent executive order aims to prohibit "fraudulent" NIL deals above fair market value, while states continue shaping the landscape through legislation that addresses agent protections, booster involvement, and athlete rights.