New York State Enacts Fashion Workers Act

New York Governor Kathy Hochul has signed into law the Fashion Workers Act, which will go into effect on June 19, 2025. The Fashion Workers Act requires model management companies to register their businesses and imposes several duties and responsibilities on both model management companies and clients related to work with models in New York.

Variations of this law (A05631/S09832) have been proposed by the New York legislature since 2022.

WHO IS COVERED BY THE ACT

A “model management company” is defined as any person or entity that “(a) is in the business of managing models participating in entertainments, exhibitions or performances; (b) procures or attempts to procure, for a fee, employment or engagements [for] models; or (c) renders vocational guidance or counseling services to models for a fee” in New York.

Additionally, a “model” is defined as “an individual, regardless of the individual’s status as an independent contractor or employee, who performs modeling services for a client and/or model management company or who provides showroom, parts, or fit modeling services.”

“Client” is further defined as “a retail store, a manufacturer, a clothing designer, an advertising agency, a photographer, a publishing company or any other such person or entity that receives modeling services from a model, directly or through intermediaries.”

We note that covered entities no longer include “creative” management companies as seen in prior iterations of the bill. Even still, the Act could have implications for any entity that uses a fee-based structure to hire models as well as retailers who engage models directly for photoshoots and other ad campaigns.

Additionally, “modelling services” includes the use of a “digital replica.” A digital replica is defined as “a significant, computer-generated or artificial intelligence-enhanced representation of a model’s likeness, including but not limited to[] their face, body, or voice, which substantially replicates or replaces the model’s appearance or performance.” This is a significant inclusion that did not exist in prior versions of the Act and demonstrates the legislature’s continued focus on the impact of artificial intelligence on employment.

DUTIES AND PROHIBITIONS: MODEL MANAGEMENT COMPANIES

The Act imposes a registration requirement instructing model management companies to be registered within one year of the Act’s effective date (i.e., June 19, 2026). Absent an exemption, model management companies with five or less employees must pay a $500 registration fee. Model management companies with more than five employees must pay a $700 registration fee. Registration must be renewed every two years.

A very limited exemption exists for model management companies (1) domiciled outside the state, (2) registered in another state with the same, or greater, requirements than the Act, and (3) that do not maintain an office in New York or solicit clients in New York. However, seeing as this law is one of the first of its kind in its creation of a registry requirement, we anticipate no model management company will meet its strict parameters under the existing landscape.

The Act further lays out duties and responsibilities the model management companies owe to their models:

• Fiduciary Duty: Model management companies have a “fiduciary duty to the models they represent.” This duty encompasses all aspects of the company’s representation, including “negotiations, contracts, financial management, and the protection of the models’ legal and financial rights.”
• Due Diligence: Model management companies must “conduct due diligence” to ensure that any employment or engagement “does not pose an unreasonable risk of danger to the model.”
• Best Efforts: Model management companies must use “best efforts to procure employment” for models signed to their company.
• Explicit Content: Model management companies must ensure that any employment requiring nudity or sexually explicit material complies with the requirements set out in Section 52(c)(3) of the Civil Rights Law, which requires the individual to knowingly and voluntarily sign an agreement depicting the sexually explicit material requested, which may also be rescinded.
• Final Agreements: Model management companies must provide models with copies of the “final agreements” the company has negotiated with clients and “any deal memos memorializing such agreements” at least 24 hours before the start of the model’s services.
• Deductions: Model management companies must clearly specify the items that will be paid for initially by the company but will ultimately be deducted from the model’s compensation.
• Financial Disclosures: Model management companies must “disclose any financial relationship” that may exist between the model management company and the client.
• Royalties: Model management companies must notify former models if the company collects royalties due to a model whom the company no longer represents.
• Certificate of Registration: Model management companies must “post a physical copy” of the company’s certificate of registration in their office, post a digital copy on the company’s website, and include “the registration number of the [company] in any advertisement, including social media profiles for the [company], for the purpose of solicitation of models . . . and in any contract with a model or client.”
• Digital Replica: Model management companies must “obtain clear written consent for the creation or use of a model’s digital replica, detailing the scope, purpose, rate of pay, and duration of such use.” This consent needs to be “obtained separately” from the representation agreement.

The Act also outlines a number of prohibitions placed on model management companies, including the following:

• Fees: A model management company cannot “require or collect any fee or deposit from a model” at the time of signing or as a condition to entering into any agreement.
• Accommodations: A model management company cannot procure an accommodation for which the model will have to pay without providing “a written disclosure of the rate charged” in advance of the model’s stay.
• Deductions: A model management company cannot deduct or offset from a model’s pay any fee or expense other than the agreed-upon commission and any items advanced.
• Travel/Visa Costs: A model management company cannot advance the cost of travel or visa-related costs without “informed written consent” from the model.
• Contract Length and Renewal: A model management company cannot require a model to sign a model management company contract that:
  • Contains a term greater than three years; or
  • Renews without the model’s affirmative written consent.
• Commission: A model management company cannot impose a commission fee greater than 20% of the model’s compensation.
• Retaliation, Discrimination, and Harassment: A model management company cannot retaliate against a model who files or attempts to file a complaint pursuant to this law and cannot engage in discrimination or harassment because of any protected status.
• Digital Replica: A model management company cannot “create, alter, or manipulate a model’s digital replica using artificial intelligence without clear, conspicuous, and separate written consent from the model.”

The Act also states that any power of attorney agreement between a model management company and a model must be optional and “subject to termination by the model at any time and for any reason.”

DUTIES OF CLIENTS

The Act further lists the duties of a client, that is, the person or entity receiving modeling services from a model directly or through intermediaries:

• Overtime Pay: A client will compensate models at an hourly rate at least 50% higher than their contracted rate for anything that exceeds eight hours in a 24-hour period.
• Meal Break: A client will provide a 30-minute meal break for any employment that exceeds eight hours in any 24-hour period.
• Prevent Unreasonable Danger: A client will only offer employment to a model that “does not pose an unreasonable risk of danger.”
• Explicit Content: A client will ensure that any employment that requires nudity or sexually explicit material complies with the requirements set out in Section 52(c)(3) of the Civil Rights Law.
• Agent: A client will allow a model to be accompanied by their “agent, manager, chaperone, or other representative.”
• Liability Insurance: A client will “provide adequate levels of liability insurance.”
• Digital Replica: A client will “obtain clear and conspicuous prior written consent for any creation or use of a model’s digital replica, detailing the scope, purpose, rate of pay, and duration of such use.”

PENALTIES FOR VIOLATIONS

Enforcement of the Act will be conducted by the New York Department of Labor (NYDOL). The commissioner may impose a civil penalty upon a model management company in violation of the Act for up to $3,000 for a first-time violation and up to $5,000 for a subsequent violation.

Additionally, a model may assert a private right of action by filing a complaint with the commissioner within six years after of the alleged conduct. A model management company that violates the Act shall be liable for actual damages, reasonable attorney fees and costs, and liquidated damages of no more than 100% of the total amount of actual damages, unless the conduct was willful, and then up to 300%.

NEXT STEPS

Given the significant compliance burdens, we expect further guidance from the NYDOL before the law goes into effect on June 19, 2025, including on what constitutes a “violation” and required forms necessary to meet the registration requirements.

In the interim, covered entities should review their existing policies and practices as well as conduct a risk assessment to determine whether they meet the requisite duties and responsibilities, particularly those related to payment and overtime.

HOW WE CAN HELP

Morgan Lewis can assist luxury and fashion clients with understanding how the New York Fashion Workers Act will impact their current and future business practices. Morgan Lewis has an extensive background advising retailers on labor and employment compliance, including issues relating to wage payment, discrimination, and retaliation.

Law clerk Nina S. Leeds contributed to this LawFlash.