Scale AI, valued at $13.8 billion, faces growing legal scrutiny over its labor practices. The company, which relies on contractors to perform tasks like image labeling and rating large language model (LLM) responses, has been hit with its second wage-related lawsuit in under a month.
On January 3, 2025, Amber Rogowicz, a former worker for Scale’s subsidiary Outlier, filed a lawsuit claiming she and others were misclassified as contractors instead of employees. According to the lawsuit, Rogowicz’s effective hourly pay was $15—below California’s minimum wage of $16 during her employment (now $16.50). The suit alleges Scale failed to compensate for time spent on training and reviewing instructions, resulting in violations of state laws covering overtime pay, business expenses, and mandatory time-off for meals and sick days.
Rogowicz worked for Outlier from March to June 2024, typically clocking 10-hour days but allegedly being paid for only half of that time. The suit, filed under California’s Private Attorneys General Act (PAGA), seeks penalties on behalf of similarly situated workers. While not a class action, PAGA suits allow workers to act on behalf of the state, with 75% of penalties directed to state coffers. Statutory penalties in this case could reach thousands of dollars per worker.
This follows a December 10, 2024, lawsuit accusing Scale of wage theft and worker misclassification. That suit, reported by SFGate, seeks class-action status.
Responding to Rogowicz’s claims, Scale spokesperson Tom Channick stated that the company paid Rogowicz fairly and removed her from Outlier for violating community guidelines. Channick added that Scale complies with labor laws and ensures its pay rates meet or exceed local living wage standards. He dismissed the lawsuit as an attempt by plaintiff lawyers to mimic prior suits.
Bryan Schwartz, Rogowicz’s attorney, rejected Scale’s assertions, labeling them a typical tactic to discredit whistleblowers. Schwartz expressed hope that the lawsuit would prompt Scale to address its alleged worker misclassification and provide relief to those affected.
With legal challenges mounting, Scale faces increasing pressure to reassess its treatment of workers and its reliance on contractor classification for essential tasks.
Featured image courtesy of Fox Business
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