AI company sued for wage theft, misclassification

A class action lawsuit file in San Francisco Superior Court alleges that Scale AI, a $13.8 billion AI development company, misclassified workers as independent contractors in violation of California labor laws.

The complaint, filed by former worker Steve McKinney, targets Scale AI’s practice of hiring “Taskers” through its Outlier division to perform AI training tasks, including data labeling, content creation, and prompt response evaluation.

The company allegedly recruited workers by promising wages of $25-40 per hour with flexible scheduling but then implemented algorithmic payment reductions or denials for projects exceeding designated time limits.

The plaintiff alleges the company failed to meet California’s ABC test for independent contractor classifications. Allegations include:

• Workers lacked control over task assignments, payment rates, and deadlines
• Uncompensated mandatory training and project preparation time
• Required use of company-specified software and tools
• No specialized skills or education requirements
• Risk of termination for raising concerns about working conditions

The suit seeks to represent an estimated 10,000-20,000 California workers, with potential damages in the hundreds of millions of dollars. Scale AI provides AI development services to major tech companies, including Google and Meta.