IN REVIEW: THE FASHION WORKERS ACTIN REVIEW: THE FASHION WORKERS

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Introduction

In December 2024, New York enacted the Fashion Workers Act (FWA), marking a historic shift in labor regulations within the fashion and modeling industry. The Act will become effective in June 2025 and is aimed to protect people in the fashion industry. More specifically, photographers, stylists, and makeup artists, who have historically lacked the same labor protections as traditional employees, will be protected under the Act. Before the FWA was signed, models and content creators in New York had to rely on management companies to book jobs. Unlike talent agencies, these management companies operate without licensing regulations or oversight. The FWA, backed by Senator Brad Hoylman-Sigal, is set to change that by closing this regulatory gap. This ensures that the creative workforce in fashion has basic labor protections. The law holds management companies accountable, preventing them from operating without transparency or worker safeguards. 

The FWA is the first law in the United State to implement protections for employees in the fashion industry. However, it is not the first to make regulations aimed toward the fashion industry as a whole. California enacted the Responsible Textile Recovery Act in 2024, which requires textile or apparel producers to create a plan to collect, repair, reuse, and recycle their products. CalRecycle must approve the plan, aiming to reduce landfill waste and promote long-term sustainability. While California’s Act targets environmental protections in the fashion industry, the new regulation in New York is aimed specifically at protecting people working in the industry. 

Workers in the industry are often classified as independent contractors, escaping basic protections under labor and employment laws such as minimum wage, overtime pay, or benefits. Specifically, creatives and models have often been exploited under this categorization. They have dealt with rampant wage theft by their agencies, unfair contracts with ambiguous language, and hidden fees or commissions on earnings. The FWA is groundbreaking new legislation that will have valuable legal and business impacts on both the industry in New York and in the United States as a whole. 

The Fashion Workers Act 

The FWA proposes comprehensive regulations for the fashion industry, particularly for model management companies. The New York State Fashion Workers Act aims to establish clear guidelines and protections for models. The Act defines models as “an individual, regardless of the individual’s status as an independent contractor or employee, who performs modeling services, including influencers, content creators, performing artists, and other persons who perform modeling services.” The Act imposes restrictions on model management companies: any person or entity that is in the business of managing models; procures or attempts to procure, for a fee, employment or engagements for persons seeking employment or engagement as models; or renders vocational guidance or counseling services to models for a fee. The broad definitions will include any entity that uses a fee structure to hire models or retailers that engage models directly. Previous versions of the Act included “creative” management companies, but the present language nonetheless presents implications for comprehensive protection across the modeling industry.

The Act has five key provisions to address labor exploitation concerns from the lack of present licensing and regulation of model management companies. Firstly, the Act requires model management companies, operating in New York, to register with the state’s Department of Labor. As a result, companies will be recognized and regulated under state law, in which record-keeping and reporting must also comply with state law. Workers hope that such registration and regulation will prevent wage theft, unfair deductions, and ambiguous contracts.

Secondly, the Act imposes a fiduciary duty on model management companies, requiring them to act in the best interests of the models they represent. This includes honest and transparent dealings in negotiations, contracts, and financial matters. By holding management companies to a higher standard of care, workers will have better recourse for unfair practices and contracts while discouraging companies from exploitative hiring schemes. 

Thirdly, the Act outlines specific prohibitions for model management companies including: charging upfront fees or deposits upon signing contracts, deducting fees for services not rendered, engaging in retaliatory actions against models who raise concerns or complaints, and discriminating or harassing models in any form. In addition to new regulations imposed on management companies, clients have an additional obligation under the new law. Clients hiring models are mandated to provide clear terms of employment, ensure timely compensation, and uphold the rights and well-being of the models. 

Lastly, the FWA addresses the growing use of artificial intelligence (AI) and digital replicas in the modeling industry. The Act includes provisions regulating the specific use of a model’s digital replica, defined as “a significant, computer-generated, or AI-enhanced representation of a model’s likeness.” This clause aims to protect models from the unauthorized use of their image, ensuring they retain control over their publicity rights. Not only does such a provision have strong implications for the protection of models against AI deepfakes, but it enables models to have control over photo enhancements like photo retouching or editing—a complaint many models have raised in line with anti-photoshopping campaigns and the Body Positivity Movement. 

Any non-compliance by clients or management companies can be registered through the complaint mechanism established in the Act. The commissioner of the New York Department of Labor 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 any subsequent violation. Additionally, a model may assert a private right of action by filing a complaint with the commissioner within six years after the alleged conduct.

The FWA aims to hold model management companies far more accountable to combat labor exploitation. However, as the Act goes into effect, the next few months will face significant uncertainty as companies, freelancers, brands, and models adjust to ensure compliance. As a result, significant legal and business pushback will likely emerge. 

Legal & Business Issues

The Fashion Workers Act is a bold step toward regulating an industry that has long operated in a legal gray area. For decades, management companies representing models, content creators, and other fashion professionals have avoided licensing regulation and oversight that is required of traditional talent agencies. Now, with the FWA about to take effect, both management firms and fashion brands must rethink how they engage with creative professionals. While the law seeks to protect workers from wage theft, unfair contracts, and financial exploitation, it also raises complex questions from legal and business perspectives about job security, industry ethics, and the unintended consequences of regulation.

At its core, the FWA imposes new legal obligations on management companies, requiring them to register with the state, disclose financial transactions, and provide written contracts. The requirements for management companies are intended to bring greater accountability to an industry where informal agreements and verbal contracts have allowed for exploitation since its creation. Now, with workers given the legal standing to challenge wage theft, unfair deductions, and coercive agreements, the balance of power in fashion labor is shifting.

However, it is foreseeable that there will be pushback from agencies, many of which will argue that the law interferes with private business relationships or improperly categorizes certain workers as independent contractors. The classification of models, stylists, and other creatives as “workers” in need of protection could spark legal challenges over employment status, similar to those seen in other industries where freelance labor dominates, such as rideshare and gig work. Agencies may argue that the law unfairly limits how they structure agreements with talent, setting the stage for potential court battles over its enforcement. Beyond the immediate legal adjustments, the FWA also requires a broader ethical reckoning. The fashion industry has long profited from an imbalanced system that benefits agencies over workers, leaving many without fair wages or financial clarity. By forcing transparency, the law addresses the undeniable moral issue of whether this industry should be allowed to operate without basic worker protections.

From a business perspective, the FWA presents economic and structural challenges for management agencies and the brands that rely on them. Agencies must now operate with full financial transparency, a shift that could expose long-standing industry practices that have gone unregulated for years. With mandatory financial disclosures, these practices may come under legal scrutiny, potentially leading to lawsuits or even the collapse of agencies unable to comply. The cost of compliance will also likely force agencies to restructure, with some downsizing or shutting down entirely to avoid the financial burden of regulation. Brands may also face increased costs when hiring talent through agencies, as management firms adjust their fees to account for regulatory demands. This could lead some brands to circumvent agencies altogether, opting instead to hire models and creatives directly—a move that reduces costs but also transfers compliance risks onto brands themselves.

Ultimately, brands and model management companies may move even further into the unregulated employment sector—seeking AI alternatives and digital modeling to replace human models altogether. The increasing use of AI and digital avatars in fashion raises a competing concern about job security for models. If management companies and brands find compliance with the FWA too burdensome or costly, they may shift toward AI use, reducing the demand for real workers and exacerbating existing concerns about the future of creative labor in the fashion industry. Although AI use in the modeling industry remains minor, it is expected that AI use in the modeling industry could grow to 30% in the next few years, and with the FWA going into effect, this percentage could grow even higher. 

Additionally, agencies could relocate to states with fewer regulations, shifting work away from New York. With no equivalent laws in other states, brands and management firms may turn to international talent markets or outsource creative work abroad to sidestep compliance obligations. However, if the law proves effective, it could set a precedent for other fashion hubs like California and Europe, forcing a broader industry shift toward greater labor protections.

From a legal perspective, the enforcement of the FWA will likely be tested in the courts as companies challenge its provisions. Questions regarding the scope of the law, its impact on interstate commerce, and its classification of independent contractors versus employees may lead to litigation that would reshape the interpretation and application of the law. Additionally, the private right of action provision—allowing models to file complaints against management companies—could lead to a surge in lawsuits, increasing legal costs within the sector.

While the FWA faces significant hurdles as brands and management companies grapple with the approaching compliance deadline, it represents a significant step toward reshaping labor rights in an industry historically resistant to regulation. As the law takes effect, industry players will need to navigate a rapidly evolving landscape, balancing compliance with business sustainability.

Future of the Act 

While the Fashion Workers Act is a step in the right direction in addressing labor exploitation, the broader impact will depend on how effectively it is enforced and whether it strikes the right balance between regulation and business growth. The law places New York, alongside California, as a leader in fashion regulation. However, the two states are taking different approaches. California’s Responsible Textile Recovery Act focuses on environmental sustainability, while New York’s law prioritizes worker protections. Together, the Acts suggest a future where the fashion industry is increasingly held accountable not just for how it treats its workforce but also for its environmental impact.

This also raises the question: are these regulations a necessary correction, or has the government overstepped into private business operations? While many advocates argue that these laws close long-standing loopholes, others caution that increased oversight could drive jobs and production out of these states. If New York’s law proves effective and enforceable, other states and international markets may follow suit, creating a more regulated and ethical global fashion industry. However, concerns remain over litigation risks, compliance burdens, and enforcement mechanisms, particularly regarding existing contracts and the retroactive application of new policies.

The success of the FWA depends on how well it balances protection with practicality. If it strengthens worker rights without suffocating the industry, it could become a blueprint for national and international reform. If the Act disrupts job markets, it could lead to mass litigation or force companies to relocate—demonstrating an example of good intentions overshadowed by regulatory overreach. As the industry adapts, fashion brands, agencies, and policymakers alike will need to walk a fine line between ethical progress and economic sustainability.

*The views expressed in this article do not represent the views of Santa Clara University.