The College Athlete Right to Organize Act aims to establish collective bargaining rights for college athletes by amending the National Labor Relations Act (NLRA). Congress finds that college athletes face exploitative practices from the NCAA and member institutions, which deny them basic economic and labor rights by classifying them as amateurs. The bill asserts that college athletes exhibit the markers of employment, performing valuable services for compensation like grant-in-aid and stipends, under significant institutional control.

To achieve its purpose, the bill significantly amends the NLRA. It redefines "employer" to include public institutions of higher education concerning college athlete employees. An individual participating in intercollegiate sports who is a student and receives any form of direct compensation (including grant-in-aid) requiring sport participation is considered an "employee" under the Act.

Furthermore, the legislation allows for the formation of multiemployer bargaining units for college athlete employees within an intercollegiate athletic conference, provided employee representatives consent. It mandates that the National Labor Relations Board (NLRB) exercise jurisdiction over all collective bargaining matters involving these institutions and college athlete employees. The bill also prohibits any agreement that waives or permits noncompliance with its provisions.

Importantly, the Act clarifies that its provisions do not alter the tax treatment of direct compensation or affect eligibility for federal financial assistance. It specifies that direct compensation will not automatically become taxable income, nor will individuals be treated as employees for employment tax purposes, if they were not already. The bill also ensures that the treatment of qualified scholarships under existing tax law remains unchanged.