The Legal Storm Brewing for Scale AI: A Closer Look at Worker Misclassification Allegations
Scale AI, a major player in the tech industry with a recent valuation of $13.8 billion, is under scrutiny for its labor practices. The company employs numerous individuals as contractors for critical AI tasks like image labeling and evaluating large language models (LLM) responses. However, these practices have sparked a series of legal challenges.
On January 3, 2025, Amber Rogowicz, a former worker at Scale AI, filed a lawsuit alleging that she and others were wrongly classified as contractors rather than employees. According to her suit, the effective pay was around $15 an hour—below California’s minimum wage of $16 at the time, now increased to $16.50. Rogowicz worked with Scale’s subsidiary, Outlier, from March to June 2024. Her typical workday spanned 10 hours, but compensation covered only five, excluding unpaid time spent on instructions and training.
- Misclassification Allegations: Rogowicz claims widespread state law violations concerning overtime pay, business expenses, and meal and sick day allowances.
- Legal Precedence: This lawsuit follows another similar case filed in December 2024, citing wage theft and worker misclassification.
- PAGA Suit Dynamics: Unlike class actions, PAGA suits allow workers to enforce labor laws on behalf of the state. They are quicker to file but allocate 75% of penalties to the state.
“Hopefully our case will help the company take responsibility for and fix its misclassification of workers,” said Bryan Schwartz, representing Rogowicz.
{Bryan Schwartz}
Rogowicz’s case aims to secure penalties for similarly affected workers without naming other plaintiffs directly. The potential statutory penalties could amount to thousands per worker, along with attorneys’ fees.
In response to these allegations, Scale AI’s spokesperson Tom Channick stated that Rogowicz was paid fairly and terminated for violating community guidelines. He emphasized that Scale adheres to legal standards and ensures pay rates meet local living wage benchmarks. Channick suggested that such lawsuits are not unexpected as plaintiffs’ lawyers often replicate previous suits.
Contrarily, Bryan Schwartz pointed out the common corporate tactic of discrediting claimants when facing potential liabilities involving large worker groups. He hopes this legal challenge will push Scale towards correcting worker misclassification and addressing wage violations.
