Episode 15: Travel from China, H-1B cap, NIL deals

We recorded and published this week’s BAL Immigration report before U.S. Citizenship and Immigration Services announced that it would extend this year’s H-1B registration deadline. The new deadline is Monday, March 20, at 5 p.m. ET. For the latest information, visit BAL.com/news.

It’s March 16, and this is your BAL Immigration Report.

• The U.S. lifts its COVID testing requirement on travel from China.
• The H-1B cap registration window is about to close.
• We take a look at the challenges foreign student athletes face monetizing their name, image and likeness.

“It does sort of create two classes of student athletes: the U.S.-based athletes that are able to take whatever NIL deal they can, and then these foreign student athletes that have very limited options on how they would be able to take that same contract.”

—Gabriel Castro, BAL Senior Associate

U.S. news

COVID testing requirement rescinded

The Centers for Disease Control and Prevention rescinded its COVID-19 testing requirement on air travelers from China, including those from Hong Kong and Macao. The CDC implemented the measure in January amid a surge in COVID cases in China; infection levels in the country have fallen substantially since that time. U.S. government officials said they will continue to monitor travel between China and the U.S. and adjust their approach as needed.

H-1B registration window closes soon

The H-1B cap registration window is about to close. U.S. Citizenship and Immigration Services will accept registrations through noon ET, Friday, March 17. USCIS will conduct the H-1B lottery between the end of the registration period and March 31. The filing period for selected cases begins April 1. BAL will provide updates as information becomes available.

U.S. news roundup

• The S. consulate in Hyderabad, India, is closed and will reopen in a new location Monday, March 20.
• The Department of Homeland Security extended and redesignated Somalia for Temporary Protected Status.
• USCIS issued guidance on how it analyzes employers’ ability to pay proffered wages.

Spotlight

A conversation with BAL Senior Associate Gabriel Castro and BAL Senior Counsel Tiffany Derentz: the challenges foreign student athletes face monetizing their name, image and likeness — or NIL.

BAL Immigration Report: Gabriel Castro, an attorney in BAL’s Los Angeles office who leads the firm’s Sports and Entertainment practice, and Tiffany Derentz, BAL senior counsel and member of the Sports and Entertainment team, joined us. Castro noted that, for years, NIL deals were off the table.

Castro: I do think that the history of collegiate athletics focus on this term “amateurs,” and the atmosphere was you could only play for your education, for room and board, and things like that, but that you could not take income from participating in collegiate athletics, and you also could not benefit from your name, image and likeness, which was a little peculiar at the time. You saw criticisms grow over the decade leading up to the change that these athletes should be able to manage their own image and likeness and be able to profit off of it just like any other individual. Just the fact that they were playing collegiate athletics prevented them from making that money off their likeness like anyone else on the street or any other student at the university, in fact, would have been able to — the participation in athletics was what was preventing them to do so.

BAL: A breakthrough came in 2021, when a unanimous Supreme Court struck down caps on education-related benefits for student athletes in NCAA v. Alston. In a concurring opinion, Justice Brett Kavanaugh took aim at the NCAA’s broader economic model, saying it would be flatly illegal in almost any other industry in America. Shortly after, the NCAA adopted an NIL policy that allows student athletes to engage in NIL activities — such as product endorsements, personal appearances, autographs or social media posts — consistent with the laws in their schools’ states.

Castro: So you started seeing these endorsement deals, and some of them were in the traditional space of athletic endorsements — the Gatorades of the world, what you normally see for Tiger Woods or Peyton Manning. But then you start seeing some more localized deals — local restaurants were sponsoring their college quarterback and the point guard for the local team. This then expanded into what was being referred to as “collectives,” and that is primarily a group of alumni from each of these universities coming together and pooling their funds to sponsor NIL deals for athletes at these schools.

BAL: Foreign students make up about 12.5% of Division I college athletes. In the 2019-2020 season, they accounted for nearly 15% of Division I men’s college basketball and about 13% of women’s basketball, according to the Associated Press. As NIL deals took off, these athletes faced distinct challenges. Derentz noted that most foreign student athletes hold F-1 visas, which allow work only in narrow circumstances.

Derentz: The challenges for foreign student athletes is that they generally cannot work. To date, the government hasn’t released any guidance as to what constitutes work or unauthorized activities in the NIL space. And because there is often money and certain actions tied to these NIL deals, when that money is coming from a U.S. source, there are a bunch of questions as to whether foreign student athletes can accept any of these NIL deals and what is allowable and what’s not allowable. Do they need to go abroad to do the activity? Can an agent host activity on their social media? Can you require them to attend a small number of events, and how many? There’s just no guidance on those questions right now. A lot of schools and students are hesitant to sign some of these deals, but they don’t want to exclude the foreign student athletes as well.

BAL: Shortly after the NCAA implemented its NIL policy, the Student and Exchange Visitor Program said it would review the policy and issue guidance. That has not happened yet. In the meantime, student athletes, their agents and legal representatives have found some workarounds. 

Castro: They’ve already seen many athletes are doing the work behind these NIL deals abroad. They’re going back to their home countries, signing a thousand autograph pages. They’re doing all the work behind an NIL deal away from the United States, and that would avoid violating U.S. immigration law.

The other approach — and we’re starting to see success on this exact case type — is that they are able to move to an alternative visa type. There’s nothing in the O-1 or the P-1 visas that would prevent a visa holder in that category from also attending class. So you could be a P-1 student professional athlete, essentially, and also maintain your student status. Same thing with the O-1, and someone with extraordinary ability could take these NIL deals, could make income through their name and image and likeness and it wouldn’t violate their immigration status.

BAL: While some NIL deals are worth millions of dollars, most are nowhere near that valuable. And Castro says that, given the costs associated with applying for P-1 or O-1 visas, this option may not be worth it for some student athletes.

Castro: It does sort of create two classes of student athletes: the U.S.-based athletes that are able to take whatever NIL deal they can, and then these foreign student athletes that have very limited options on how they would be able to take that same contract.

BAL: Derentz says the best approach would be for the government to provide guidance specifying what NIL activities are permissible on an F-1 visa.

Derentz: If you just look at this from a reasonable person point of view, these students are first and foremost students. They’re coming to the United States to study. They happen to also be athletes and are on an athletic team. But to participate in the NIL deal, they have to be a student athlete. There needs to be some room to look at some of these activities and say if they engage in these few activities, sometimes or once a week or whatever that may be, they’re still really a student at the end of the day.

BAL: For more information, read a June 2022 white paper Castro and Derentz wrote on the NCAA’s NIL rules.

Global news

China reopens borders

The Chinese government announced the full reopening of borders to foreign nationals this week. Authorities resumed issuance of all visa categories on March 15. Individuals holding unexpired visas issued before March 28, 2020, can once again use them to enter the country. China will also resume its visa-free travel policy in several areas, including Hainan, cruise ship travelers in Shanghai, foreign nationals visiting Guangdong from Hong Kong and Macao, and select tour groups to Guilin, Guangxi.

U.K. soon to require travel authorization

In the United Kingdom, authorities will begin requiring visa-exempt travelers to apply for Electronic Travel Authorization, or ETA, later this year. Qatari nationals will need to apply for ETA in November, followed by nationals of Bahrain, Jordan, Kuwait, Oman, Saudi Arabia and the United Arab Emirates next February. By the end of 2024, U.K. authorities will require all visitors who do not need a short-stay visa, including travelers from the United States and most of Europe, to obtain ETA. Travelers will be exempt if they hold a British or Irish passport. The authorization will be valid for two years and permits visitors to enter the U.K. for up to six months for tourism, family visits, business or school.

Brazil to reinstate visa requirements

In Brazil, officials announced they will reinstate visa requirements for nationals of Australia, Canada, Japan and the United States beginning Oct. 1. The policy has been suspended since March 16, 2019. The Brazilian government said it is open to negotiating visa exemption agreements with each country if they reciprocate visa-free travel.

Global news roundup

• The New Zealand government is urging FIFA Women’s World Cup travelers to apply for visas no later than April.
• Portugal has made residence permits available to nationals of Portuguese-speaking countries.
• Authorities in Thailand have announced they will introduce new landing fees for some travelers.

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