San Francisco Investigates Scale AI’s Labor Practices Amid Concerns
URGENT UPDATE: San Francisco regulators are actively investigating Scale AI over serious concerns regarding its treatment of workers. This probe, confirmed by a Scale AI spokesperson, targets the company’s labor practices, particularly focusing on the vast number of contractors it employs to train AI models.
The investigation is spearheaded by the Office of Labor Standards Enforcement (OLSE), which oversees compliance with local labor laws including minimum wage and sick leave. Scale AI, based in San Francisco, has been under scrutiny for its classification of workers as contractors rather than employees, raising alarms about potential violations of labor regulations.
The city’s investigation is particularly focused on individuals who have worked for Scale AI as “taskers” and “freelancers” over the past three years. A notice from OLSE compliance officer Maura Prendiville, recently shared in a subreddit dedicated to gig work, indicated that the investigation is limited to city residents, including those who have worked remotely for the company.
While the OLSE has declined to provide further details on the nature of the allegations, it is essential to note that the existence of the investigation does not imply wrongdoing by Scale AI. The agency has the authority to impose fines for labor violations but could also find no basis for the allegations or choose to drop the inquiry altogether.
Scale AI spokesperson Natalia Montalvo stated that the company is fully cooperating with the OLSE and is committed to complying with all local laws. “Our dedicated teams work hard to ensure contributors are paid fairly, feel supported, and can access the flexible earning opportunities they value,” Montalvo said, emphasizing that feedback from workers has been largely positive.
This is not the first time Scale AI has faced scrutiny. Earlier this summer, the company was the subject of a federal Department of Labor investigation, which was ultimately dropped. However, some workers have previously alleged misclassification and underpayment, leading to lawsuits filed in San Francisco’s superior court.
The investigation raises pressing questions about the gig economy’s labor practices, particularly as prominent companies like Meta invest heavily in AI technology. Meta’s recent acquisition of nearly half of Scale AI for $14 billion underscores the growing financial stakes in the AI sector.
As the OLSE continues its investigation, all eyes are on the potential implications for Scale AI and the broader industry. Stakeholders are encouraged to stay informed as developments unfold.
For those who have worked with Scale AI, particularly through platforms like Outlier AI, HireArt, and Upwork, the city is seeking testimonies to assess the situation further. Upwork has stated that it does not play a role in labor classification determinations, emphasizing that the responsibility lies with the hiring business.
Stay tuned for updates as the situation develops—this investigation could have significant ramifications for the future of labor practices in the tech industry.
