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Scale AI relies on an army of workers it classifies as contractors to do basic AI jobs like tagging images or grading LLM answers for Big Tech and others. But the AI startup, the latest It was valued at 13.8 billion dollarsfaces increasing legal challenges related to labor practices
Former Scale AI employee Amber Rogowicz on January 3, 2025 sued He claimed that Scale misclassified him and other employees as contractors instead of employees. The lawsuit alleges that the company’s wages effectively reached $15 an hour, which it claims violates California’s $16.00 minimum wage at the time it worked (now $16.50).
Rogowicz allegedly worked for Outlier, a subsidiary of Scale, from March to June 2024. On a typical day, he worked about 10 hours, but he said he was only compensated for five, in part because he was not compensated for the time he spent reviewing manuals and training. Because the lawsuit challenges the contractor classification, it also alleges broad violations of state laws covering workers’ overtime pay, business expenses, meal time and sick days.
This is the second time in less than a month that Scale has been sued over such concerns. On December 10, 2024, a lawsuit was filed against Scale alleging widespread wage theft and employee misclassification. This was reported by SFGate. In that lawsuit, the plaintiff was trying to file a class action lawsuit.
Rogowicz’s lawsuit is not a class action, but was brought under California’s Personal Attorneys General Act (PAGA), which gives workers the power to enforce labor laws on behalf of the state. PAGA suits are usually faster and easier than class actions, but 75% of the penalties must go to the state. Rogowicz’s lawsuit does not name any other plaintiffs, but seeks punitive damages on behalf of similarly situated employees who worked on AI for Scale.
Rogowicz’s lawsuit does not seek a specific dollar amount, but seeks legal penalties that could run into the thousands of dollars and attorney fees for each employee.
Scale spokesperson Tom Channick told TechCrunch that Scale paid Rogowicz fairly and fired him for violating unspecified community guidelines. Scale says it is fully compliant with the law and works to ensure pay rates consistently meet or exceed local living wage standards. Scale added that plaintiff attorneys often try to copy previous lawsuits because the lawsuit is not surprising.
In response, San Francisco employment rights attorney Bryan Schwartz, who represents Rogowicz, told TechCrunch that he did not know the details of Scale’s claims against Rogowicz. But Schwartz said it’s “very common in these situations” for corporations to attack the messenger when they’re on the hook for potential liabilities involving a large workforce.
“We hope that our case will help the company take responsibility for and correct employee misclassification and help injured workers, like our client, who has suffered past wage violations,” Schwartz said.
