Scale AI relies on an army of workers it categorizes as contractors to do essential AI work like labeling images or rating LLM responses for Big Tech and others. But the AI startup, most recently valued at $13.8 billion, is facing mounting legal challenges over its labor practices.
On January 3, 2025, former Scale AI worker Amber Rogowicz filed a lawsuit alleging that Scale misclassified her and other workers as contractors instead of employees. The suit claims the company’s pay effectively works out to $15 an hour, alleging this violates California’s $16.00 minimum wage at the time of her employment (it’s now $16.50).
Rogowicz worked for Scale’s subsidiary Outlier from March to June of 2024, according to the lawsuit. On a typical day, she worked about 10 hours but said she was only compensated for five, partly because the time she spent reviewing instructions and training wasn’t paid, the suit claims. Because the suit is challenging the contractor classification, it also alleges widespread violations of state laws that cover employee overtime pay, business expenses, time-off for meals, and sick days.
This is the second time in less than a month that Scale has been sued over these types of concerns. On December 10, 2024, a lawsuit was filed against Scale arguing widespread wage theft and worker misclassification, SFGate reported. In that lawsuit, the plaintiff sought to be the lead of a class action lawsuit.
Rogowicz’s suit is not a class action but was brought under California’s Private Attorneys General Act (PAGA), which empowers workers to enforce labor laws on behalf of the state. PAGA suits are often faster and easier to file than class actions, but 75% of penalties must go to the state. Rogowicz’s suit doesn’t name any other plaintiffs, but seeks penalties on behalf of similarly situated workers who did AI work for Scale.
Rogowicz’s lawsuit isn’t seeking a specific dollar amount but requests statutory penalties that could total thousands of dollars per worker, plus attorneys’ fees.
Scale spokesperson Tom Channick told TechCrunch that Scale paid Rogowicz fairly and removed her from Outlier for violating unspecified community guidelines. Scale says it fully complies with the law and works to ensure that pay rates consistently meet or surpass local living wage standards. Scale added that the lawsuit is unsurprising as plaintiff lawyers often look to copy earlier suits.
In response, Bay Area employment rights attorney Bryan Schwartz, who is representing Rogowicz, told TechCrunch that he doesn’t know the details of Scale’s allegations against Rogowicz. But Schwartz said it is “very common in these cases that corporations attack the messenger” when they are on the hook for potential liabilities involving a large group of workers.
“Hopefully our case will help the company take responsibility for and fix its misclassification of workers, and provide relief to those aggrieved workers like our client who have suffered wage violations in the past,” Schwartz said.