Scale AI relies on a military of employees it classifies as contractors to do essential AI work like labeling images or scoring LLM answers for Big Tech and others. But the AI startup, which was recently valued at $13.8 billion, is facing increasing legal challenges over its labor practices.
On January 3, 2025, former Scale AI worker Amber Rogowicz filed a lawsuit She claimed Scale misclassified her and other employees as contractors quite than employees. The lawsuit alleges that the corporate's wages are literally $15 an hour and claims this violates California's minimum wage of $16.00 on the time of her employment (currently it’s $16.50 -Dollar).
According to the lawsuit, Rogowicz worked for Scale's Outlier subsidiary from March to June 2024. On a typical day, she worked about 10 hours, but said she was only compensated for five hours, partially since the time she spent reviewing instructions and training was not paid, the lawsuit says. Because the lawsuit challenges the contractor classification, it also alleges widespread violations of state laws governing worker pay for extra time, business expenses, day off for meals and sick days.
This is the second time in lower than a month that Scale has been sued over concerns of this nature. On December 10, 2024, a lawsuit was filed against Scale alleging widespread wage theft and employee misclassification. SFGate reported. In this lawsuit, the plaintiff sought to guide a category motion lawsuit.
Rogowicz's lawsuit just isn’t a category motion lawsuit but was filed under California's Private Attorneys General Act (PAGA), which allows employees to implement employment laws on behalf of the state. PAGA lawsuits are sometimes quicker and easier to file than class motion lawsuits, but 75% of the penalties must go to the state. Rogowicz's lawsuit doesn’t name every other plaintiffs but seeks penalties on behalf of similarly situated employees who performed AI work for Scale.
Rogowicz's lawsuit just isn’t about a particular dollar amount, but quite about statutory penalties that might amount to hundreds of dollars per employee, plus attorneys' fees.
Scale spokesman Tom Channick told TechCrunch that Scale paid Rogowicz fairly and removed her from Outlier for violating unspecified community guidelines. Scale states that it fully complies with the law and is committed to making sure that pay rates at all times meet or exceed local living wage standards. Scale added that the lawsuit just isn’t surprising because plaintiffs' lawyers often attempt to copy previous lawsuits.
In response, Bryan Schwartz, a Bay Area employment lawyer representing Rogowicz, told TechCrunch that he didn’t know the main points of Scale's allegations against Rogowicz. However, Schwartz said it’s “quite common in these cases for firms to attack the messenger” after they are accountable for potential liabilities involving a big team of workers.
“Hopefully our case will help the corporate take responsibility for and proper employee misclassification and supply relief to injured employees like our client who’ve suffered wage violations prior to now,” Schwartz said.
