Scale AI depends on a military of staff it categorizes as contractors to do important AI work like labeling photos or score LLM responses for Big Tech and others. But the AI startup, most lately valued at $13.8 billion, is going through mounting authorized challenges over its labor practices.
On January 3, 2025, former Scale AI employee Amber Rogowicz filed a lawsuit alleging that Scale misclassified her and different staff as contractors as an alternative of workers. The go well with claims the corporate’s pay successfully works out to $15 an hour, alleging this violates California’s $16.00 minimal wage on the time of her employment (it’s now $16.50).
Rogowicz labored for Scale’s subsidiary Outlier from March to June of 2024, in keeping with the lawsuit. On a typical day, she labored about 10 hours however mentioned she was solely compensated for 5, partly as a result of the time she spent reviewing directions and coaching wasn’t paid, the go well with claims. Because the go well with is difficult the contractor classification, it additionally alleges widespread violations of state legal guidelines that cowl worker additional time pay, enterprise bills, time-off for meals, and sick days.
This is the second time in lower than a month that Scale has been sued over these kind of considerations. On December 10, 2024, a lawsuit was filed towards Scale arguing widespread wage theft and employee misclassification, SFGate reported. In that lawsuit, the plaintiff sought to be the lead of a category motion lawsuit.
Rogowicz’s go well with is just not a category motion however was introduced underneath California’s Private Attorneys General Act (PAGA), which empowers staff to implement labor legal guidelines on behalf of the state. PAGA fits are sometimes sooner and simpler to file than class actions, however 75% of penalties should go to the state. Rogowicz’s go well with doesn’t title another plaintiffs, however seeks penalties on behalf of equally located staff who did AI work for Scale.
Rogowicz’s lawsuit isn’t looking for a selected greenback quantity however requests statutory penalties that might whole 1000’s of {dollars} per employee, plus attorneys’ charges.
Scale spokesperson Tom Channick instructed TechCrunch that Scale paid Rogowicz pretty and eliminated her from Outlier for violating unspecified group tips. Scale says it totally complies with the regulation and works to make sure that pay charges constantly meet or surpass native residing wage requirements. Scale added that the lawsuit is unsurprising as plaintiff legal professionals usually look to repeat earlier fits.
In response, Bay Area employment rights legal professional Bryan Schwartz, who’s representing Rogowicz, instructed TechCrunch that he doesn’t know the small print of Scale’s allegations towards Rogowicz. But Schwartz mentioned it’s “quite common in these instances that companies assault the messenger” when they’re on the hook for potential liabilities involving a big body of workers.
“Hopefully our case will assist the corporate take accountability for and repair its misclassification of staff, and supply reduction to these aggrieved staff like our consumer who’ve suffered wage violations up to now,” Schwartz mentioned.
