Couture Compliance? The Fashion Workers Act Imposes New Labor Protections for Industry Workers

A $2.5 trillion global industry, fashion finds its US epicenter in New York City, where it relies on models to market and showcase its variety of products. Effective June 19, the Act establishes labor protections for models and other freelance talent in New York’s fashion sector. The law also imposes new heightened consent requirements for the use of generative artificial intelligence (AI) to create or reproduce models’ likenesses. While the changes will largely impact management and agency companies, brands hiring models must also understand how these regulations may impact their work with models in New York.

Who Is Covered?

The Act applies to what it defines as “model management companies,” “models,” and “clients.”

The Act defines a “model management company” as any entity or person that is in the business of managing models for entertainment, exhibitions, or performances, procuring employment for models, or providing vocational guidance for a fee in New York. Further, a “model” is defined as an individual performing modeling services, regardless of their status as an independent contractor or employee. Finally, the term “client” is defined broadly under the Act to include retail stores, manufacturers, clothing designers, advertising agencies, photographers, publishing companies, or generally any person or entity that receives modeling services from a model, directly or through intermediaries.

Overlapping Compliance Obligations?

As previewed above, the definition of “client” was drafted to include all persons and entities that receive services from models, regardless of whether those models are hired by the brand directly or through a staffing agency, i.e., through a model management company. The stark contrast between the Act’s expansive definition of “client” with its more precise definition of “model management company” creates a crucial question for fashion brands that do not utilize model management company services when hiring models, but rather interface with their models directly without support from a third party, which is whether such brands are required to comply with the duties imposed by the Act on model management companies in addition to those imposed on all clients.

The law, as written currently, is silent on this issue. Accordingly, as matters stand, a fashion brand that hires its models directly will not be explicitly required to comply with the model management company regulations in addition to those generally imposed upon clients. The scope of the model management company definition could very well expand over time, however, and companies looking to stay ahead of the curve may wish to err on the side of complying with model management company requirements, as applicable, as well as those of clients at large.

New Legal Requirements

The Act has a number of new obligations that companies working with fashion models must comply with. Key provisions include:

• NYDL: The Act requires model management companies to register with the New York Department of Labor (NYDL) by June 19, 2026, to continue doing business in the state of New York.
• Fiduciary Duty: Companies have a “fiduciary duty to the models they represent,” which extends to “negotiations, contracts, financial management, and the protection of the models’ legal and financial rights.”
• Contracts: The Act requires model management companies to provide models with the final contractual agreements negotiated with clients and “deal memos” that memorialize these agreements. Companies are obligated to provide written contracts that were negotiated with clients to models at least 24 hours prior to the commencement of a model’s services.
• Explicit Conduct: Model management companies must comply with legal requirements for employment involving nudity or explicit material, including having models sign an agreement outlining the sexually explicit material requested and allowing the model to rescind such agreement.
• The Act also:
  • Prohibits commission fees for model management companies greater than 20% of the model’s compensation.
  • Establishes minimum compensation rates and requires a 30-minute meal break for jobs exceeding eight hours in a 25-hour period.
  • Gives models the right to be accompanied by their representatives during jobs.

The Act applies regardless of whether models are classified as independent contractors or employees.

AI Provisions

With respect to the use of generative AI, the Act requires companies to “obtain clear and conspicuous prior written consent” for the use or creation of a model’s digital replica, which 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[.]” The Act explicitly excludes minor retouching and editing.

At the same time, the Act prohibits model management companies from requiring models to grant them power of authority, thereby making it more difficult for agencies to license the use of a model’s likeness without the model’s express authorization.

Penalties

Companies that fail to comply with the Act will face monetary penalties. Section 1038 of the Act grants the state labor commissioner authority to impose fines of up to $3,000 for an initial violation, and up to $5,000 for any subsequent violations. The Act also allows models to file a complaint with the NYDL within six years of the alleged conduct, while prohibiting retaliation. If a model management company is found to have violated the Act, it will be liable to the model for actual damages, reasonable attorneys’ fees and costs, and liquidated damages unless the model management company had a good faith basis to believe they were in compliance with the Act.

Takeaways

Although New York is the first state to provide models with these explicit legal protections, the law is likely to have outsized influence given New York’s central role in the fashion industry. With the Act set to take effect on June 19, key players in the fashion industry should familiarize themselves with these new legal requirements and take steps to ensure compliance.

The Fashion & Retail team at ArentFox Schiff is closely monitoring the Act and related developments and is prepared to assist companies with compliance. If you have questions or concerns regarding the Act, please reach out to any of the authors or other members of the ArentFox Schiff team for guidance.