Former employees of Scale AI, a San Francisco company in the generative artificial intelligence (AI) field, are suing the company and its 27-year-old CEO Alexandr Wang in the Superior Court of California. The class action wage theft lawsuit accuses Scale AI of exploiting its workers by misclassifying them as independent contractors, preventing them from qualifying for overtime pay. The complaint filed on December 10, 2024, calls Scale AI “the sordid underbelly propping up the generative AI industry.”
Workers of Scale AI and similar tech companies are often misclassified as independent contractors, which prevents them from qualifying for overtime wages, paid leave, and rest or meal breaks. As the complaint alleges, with the ongoing generative AI boom, these companies hire laborers in massive quantities from countries worldwide as “Taskers,” who are primarily tasked with reviewing AI prompts and data labeling to help large language models sound more human than artificial. Scale AI does not compensate for any time spent training for each project, which often had differing rules and regulations. The company expected Taskers to familiarize themselves with requirements specific to each project by reviewing guidelines, attending training webinars, and directing questions to a public Slack channel, all without compensation.
Outlier, a subsidiary of Scale AI also named in the suit, acts as the recruiter for Scale AI, drawing applicants by promising $25-40 per hour, with a schedule of their choosing. Taskers are then assigned to work on projects for companies introducing AI options such as Meta and OpenAI. The lawsuit claims that hiring Taskers as independent contractors allows Scale AI to lower expenses, providing the company an unfair competitive edge by keeping prices low. By keeping costs on wages low, Scale AI has kept an unfair advantage by lowering the high cost of building these large language models lower than its competitors.
The lawsuit also claims that Scale AI exposes its laborers to traumatic experiences. Steve McKinney, the named Plaintiff in the suit, describes working on a project for Meta named “Flamingo Safety Project,” whose focus was to train AI models how to respond to prompts from users saying they planned to hurt themselves.
It is a common wage theft tactic for employers to classify tech company workers as “independent contractors” to avoid paying overtime. If you believe you are a victim of wage theft or have questions about your rights as a worker, contact the attorneys of Pechman Law Group at 212-583-9500. We have recovered over $30 million for victims of wage theft.
