Dear Retail Clients and Friends,
This edition of Morgan Lewis Retail Did You Know? examines the pending New York Fashion Workers Act, which, if passed by the state legislature, would create new compliance requirements, including obligations related to licensing and pay, on model and creative management companies.
The bill (S8638/A09762) seeks to amend the New York Labor Law. It requires “model” and “creative” management companies to register with the state within one year of the bill’s effective date as well as pay a $50,000 surety bond, subject to some limited exceptions.
A “model” or “creative” management company is defined as any person or entity that “(a) is in the business of managing models [or creatives] 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 counselling services to models [or creatives] for a fee” in New York.
Construed broadly, this could have massive implications not only for traditional model or creative management companies using fee-based structures, but also for retailers who directly hire models and creatives for studio photoshoots and ad campaigns.
The bill specifically applies to models, classified as employees and independent contractors, as well as creatives such as photographers, stylists, casting directors, make-up artists, and hairdressers. A “model” is further defined as an individual who “performs modeling services for a client or consents in writing to the transfer of their legal right to the use of their name, portrait, picture or image, for advertising purposes or for the purposes of trade.” A “client” is defined as a “retail store, manufacturer, clothing designer, advertising agency, photographer, publishing company, or any other such person or entity that receives modeling services from a creative, directly or through intermediaries.”
Registration must be renewed each year. The bill further lays out the duties and responsibilities the companies owe to their models and creatives. They include:
Further, the bill includes additional duties for clients and hiring parties, including:
A model or creative management company or person purporting to be a model or creative management company who fails to comply with registration will be deemed to have violated the law. Failure to comply in a timely manner, including with renewal, constitutes an additional violation. A client or hiring party can further violate the law by contracting with a company that the client knows or should have known failed to register or renew registration or had its registration revoked.
Civil penalties include up to $3,000 for the initial violation and up to $5,000 for each additional violation. Intentional failure to comply with registration constitutes a class B misdemeanor.
Lastly, a model or creative aggrieved by a violation of this law may file a complaint within two years with the commissioner. The complaint will then be sent to the company for an opportunity to respond. The commissioner will review the response and may then inform the model or creative of their right bring an action in court.
The bill was introduced in the New York state legislature by Senator Brad Hoylman and Assemblymember Karines Reyes in late March 2022 and has been referred to committee. The committee may schedule a hearing to discuss the bill and solicit additional public opinion.
While under consideration, the bill may be subject to amendment or rejected entirely by the committee. The committee may then report the bill to the full senate or assembly for consideration where it may again be amended or rejected. If passed and not vetoed by the governor, the bill will come into effect 19 days after it becomes a law.
If passed, the bill imposes significant compliance requirements for all businesses in the fashion and modeling industry, including the modeling and creatives agencies themselves and those who hire from these agencies. Companies should review their existing policies and practices as well as conduct a risk assessment to determine whether they meet duties and responsibilities, particularly those related to payment and overtime.
That said, the bill is expected to be subject to at least some revisions and debate in the months to come. Interestingly, failure to comply with the duties and responsibilities noted above does not constitute violation of the law in its current form; however, it could have implications on a company’s ability to register in the future.
If or when it does pass, further guidance is expected from the state, including the required forms to meet the registration and publication requirements.
Morgan Lewis can assist luxury and fashion clients with understanding the New York Fashion Workers Act and its potential impact on current and future business practices. Morgan Lewis has experience advising retailers on labor law compliance, including issues related to wage payment, discrimination, and retaliation.
If you have any questions or would like more information on the issues discussed in this Retail Did You Know?, please reach out to your Morgan Lewis contact, the article authors, or any of our retail team leaders: