NY Fashion Workers Act Would Imposing Significant Compliance Requirements on Models and Creative Agencies – Retail Did You Know? | Morgan Lewis

Dear Retail Customers 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 licensing and payroll obligations, for creative and model management companies.

The bill (S8638 / A09762) aims to change the New York labor law. It requires “model” and “creative” management companies to register with the state within one year of the effective date of the bill and pay a $ 50,000 bond, subject to some limited exceptions.

WHO IS COVERED BY THE LAW?

A “model” or “creative” management company is defined as any person or entity who “(a) engages in model management [or creatives] participation in entertainment, exhibitions or shows; (b) procures or attempts to procure, for remuneration, employment or assignments [][for] Models; or (c) provide professional guidance or counseling services to models [or creatives] for a fee ”in New York.

Taken broadly, this could have huge implications not only for traditional modeling or creative management companies using paid structures, but also for retailers who directly hire models and creatives for studio photography and advertising campaigns.

The bill applies specifically to models, classified as independent employees and contractors, as well as creatives such as photographers, stylists, casting directors, makeup 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, image or image, for advertising or commercial purposes. . ” A “client” is defined as a “retail store, manufacturer, clothing designer, advertising agency, photographer, publishing company or any other similar person or entity who receives modeling services from a creator, either directly or through intermediaries”.

DUTIES AND RESPONSIBILITIES

Registration must be renewed every year. The bill further defines the duties and responsibilities that companies owe to their models and creatives. They include:

  • Fiduciary duty: The company has a fiduciary duty to any model or creator that the company “manages, procures or attempts to procure … or provides career guidance or consulting services.”
  • Health & Safety: The company must conduct “reasonable research” on customers, hires, and engagements to ensure the health, safety, and well-being of models and creatives.
  • Reasonable efforts: The company must make “reasonable efforts” to get work on the model or creative.
  • Exclusive representation: The company cannot enforce exclusive representation clauses when the model or creative has not received a job or has not contracted a client through the company in the previous 60 days.
  • Explicit content: If the engagement requires nudity or other sexually explicit material, the company must comply with Section 52 (c) (3) of the Civil Rights Act, which requires the individual to knowingly and voluntarily sign an agreement depicting the sexually explicit material requested, which could also be revoked.
  • Copies of the contract and disclosures: All contracts and agreements regarding pay and scope of work must be provided to the model or creative. The company must also provide a summary in plain language and disclose “any relationship” between the company and the customer or party it hires.
  • Payment: If the company receives a payment on behalf of a model or creative, it must be immediately deposited in escrow and paid (minus any fees) within 45 days from the date of completion of the services.
  • Disputes: To the extent that there is a dispute with the tenant, the company must pay for the model or creative and then withhold payment from the customer once the dispute is resolved.
  • Publication requirement: The company must post the registration certificate in a prominent place in the office and display a digital copy of it on its website.
  • Registration number: The company must include its registration number in all advertisements, including social media profiles.
  • The shapes: The company must submit, and the state must approve, its contract or hiring form. The state will not refuse approval unless the form is “unjust, unjust and oppressive”. The company must also provide all material, including financial statements, agreements and contracts, to the model or creative in sufficiently understandable language.
  • Prohibitions: The company may not take compensation as a condition of entering into a contract with the company, charge more than the daily fair market rate for housing for the model or creative, or deduct from the model’s payment or commission any fees or expenses, including visa or visa related fees, other than those previously agreed.
  • Contract length: The contract between the company and the model or creative cannot be longer than two years and cannot be renewed without affirmative consent.
  • Commissions: Commissions cannot exceed 20%.
  • No retaliation or discrimination: The company cannot take any retaliatory action or engage in discrimination or harassment.

Additionally, the bill includes additional obligations for clients and hiring parties, including:

  • Payment: Any fees, rewards or fees must be paid within 30 days of hiring or hiring.
  • Over time: The customer must pay an hourly rate at least 50% higher than the hourly rate contracted for any employment or engagement that exceeds eight hours in any 24 hour period.
  • No discrimination or harassment: The client cannot discriminate or harass the model or the creative.

SANCTIONS FOR VIOLATIONS

A model or creative management company or a person who claims to be a model or creative management company that does not comply with registration will be deemed to have violated the law. Failure to comply promptly, even with renewal, constitutes a further violation. A client or hired party may further violate the law by contracting with a company that the client knows or should have known has not registered or renewed its registration or its registration has been 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 the registration constitutes a class B offense.

Finally, a model or a creative affected by a violation of this law can lodge a complaint with the commissioner within two years. The complaint will then be sent to the company for an opportunity to respond. The commissioner will examine the response and can then inform the model or creator of their right to take legal action.

WHAT’S NEXT

The bill was tabled in the New York state legislature by Senator Brad Hoylman and Assemblyman Karines Reyes in late March 2022 and was referred to the committee. The commission can schedule a hearing to discuss the bill and solicit further public opinion.

During the examination, the bill may be subject to change or rejected entirely by the committee. The commission can then refer the bill to the entire senate or assembly for consideration where it can be amended again or rejected. If approved and without veto by the governor, the bill will take effect 19 days after it becomes law.

PRACTICAL IMPLICATIONS

If approved, the bill imposes significant compliance requirements for all companies in the fashion and modeling industry, including modeling and creative 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 if they meet their duties and responsibilities, especially those related to payments and overtime.

That said, the bill is expected to be subject to at least some reviews and debates in the coming months. It is interesting to note that failure to comply with the aforementioned duties and responsibilities does not constitute a violation of the law in its current form; however, it may have implications for a company’s ability to register in the future.

If or when it passes, additional guidance is awaited from the state, including the forms required to meet registration and publication requirements.

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