What New York's Fashion Workers Act Means for Retailers

Later this year, the New York Fashion Workers Act will go into effect on June 19. 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.

Who is Covered by the Act

A "model management company" in New York is defined as any entity that manages models for entertainment or performances, arranges employment for them for a fee, or provides vocational guidance to them for a fee. A "model" is anyone who performs modeling services, regardless of employment status. A "client" includes entities such as retail stores, manufacturers, or advertising agencies that hire models for their services. The Act no longer covers "creative" management companies, but it may still affect any entity using a fee-based structure to hire models. Additionally, "modeling services" now includes the use of "digital replicas" — artificial intelligence-generated or computer-enhanced likenesses of a model, highlighting concerns over AI's impact on employment.

Duties and Prohibitions

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 while those with more than five employees must pay a $700 registration fee to 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.

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

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• “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 must be conducted to ensure that any employment or engagement “does not pose an unreasonable risk of danger to the model.”
• “Best efforts to procure employment” for models signed to their company.
• Financial disclosures must include “any financial relationship” that may exist between the model management company and the client.
• Royalties collected by model management companies must be disclosed to former models if the company collects royalties due to a model whom the company no longer represents.
• 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, noting that model management companies 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.
• 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.
• 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.
• Impose a commission fee greater than 20 percent of the model’s compensation.
• 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.
•  “Create, alter or manipulate a model’s digital replica using AI without clear, conspicuous and separate written consent from the model.”

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, including but not limited to:

• Overtime Pay: A client will compensate models at an hourly rate at least 50 percent 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.”
• 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

The New York Department of Labor (NYDOL) will enforce the Act and those model management companies in violation may pay a civil penalty 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 with a model management company that violates the Act being liable for actual damages, reasonable attorney fees and costs, and liquidated damages of no more than 100 percent of the total amount of actual damages, unless the conduct was willful, and then up to 300 percent.

Next Steps

While awaiting further guidance from the NYDOL before the law goes into effect on June 19, 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.

Leni Battaglia is a partner at Morgan Lewis & Bockius, an international law firm that provides corporate, transactional, litigation, and regulatory services across all industries.

Carolyn Corcoran is an associate at Morgan Lewis & Bockius.