Client B took photos and hired Contractor A to retouch or edit them.
Client B retains the copyright for the originals, but who owns the copyright for the retouched/edited photos?
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(Assuming they are sufficient to attract copyright protection)
17 U.S.C. § 103(b) provides:
The copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material.
B made a photo. B owns the copyright in the photo - Including the right to authorize derivates. Nobody but B may allow (or allow to allow) those as long as B owns the copyright.
A makes changes to the photo. A can only get copyright in his changes. If the changes amount to copyrightability is a different question, but if there is copyright in the changes, A owns the copyright in the changes.
While A can own the copyright in the changes, A being contracted to do the work can, but doesn't have to, put the work into the area of work for hire. That requires the contract for the edit to include language that says that the editing is a work for hire. If it is a work for hire, the copyright is with B wholly and A has no rights. If such language is missing, the copyright of an ordered edit is - if it exists - with A.
However, in the US, A might have less than nothing but instead a count of copyright infringement if he is not a contractor but just a random person editing the picture: if you had no right to make a derivative work, you can not have copyright in the changes you made. See Anderson v. Stallone, 11 U.S.P.Q.2d 1161 (C.D. Cal. 1989):
The Court finds that Anderson's treatment is not entitled to copyright protection. This finding is based upon the following determinations that will be delineated further below:
(a) the Rocky characters developed in Rocky I, [*16] II and III constitute expression protected by copyright independent from the story in which they are contained;
(b) Anderson's treatment appropriated these characters and created a derivative work based upon these characters without Stallone's permission in violation of [17 USC] Section 106(2);
(c) no part of Anderson's treatment is entitled to copyright protection as his work is pervaded by the characters of the first three Rocky movies that are afforded copyright protection.