Scale AI $12.5 Million Wage And Hour Class Action Settlement

William C. Gendron

Editor in Chief

Published

July 23, 2026 1:26 PM

Updated

July 23, 2026

Who are the class members?

Class members are individuals who provided services to Scale AI or Smart Ecosystem or whom HireArt Inc. placed to perform services similar to a contributor while residing in California during the class period from Dec. 10, 2020, to Feb. 28, 2026:

Contributors include workers classified as independent contractors performing services with Scale AI or HireArt, such as generative AI annotators, prompt engineers, subject matter experts, contributors or similar roles.

Class members must have a California address associated with an account on the defendants’ platforms, including Outlier or Remotasks, a tax form or wage statement showing they worked for the companies or other proof they performed the work in California.

A subset of class members, referred to as aggrieved employees, includes all individuals who provided services as contributors or whom HireArt placed to perform similar services while residing in California during the PAGA period from Oct. 29, 2023, to Feb. 28, 2026.

The settlement administrator will use company records to determine the number of workweeks and pay periods each class member worked during the relevant periods. These figures will directly impact the amount each person receives.

How much are settlement payouts?

The total settlement fund is $12,500,000. The amount each class member receives depends on the number of weeks they worked during the class period and, if eligible, the number of pay periods they worked during the PAGA period. There are two main parts to the settlement:

Class settlement: Pays individual class payments to eligible class members based on the number of workweeks worked during the class period
PAGA settlement: Pays individual PAGA payments to aggrieved employees based on pay periods worked during the PAGA period and penalties to the California Labor and Workforce Development Agency

After deductions for administration costs, attorneys’ fees, litigation expenses, service awards and penalties to LWDA, the estimated net settlement amount available for distribution to class members is $7,543,333.33.

How does the settlement administrator calculate payments?

Individual class payment: The settlement administrator will divide the net settlement fund among participating class members based on the number of weeks they worked during the class period.
Individual PAGA payment: The PAGA portion allocates $175,000 for the settlement administrator to divide among aggrieved employees based on the number of pay periods they worked during the PAGA period.

If more than $10,000 of the aggregate amount allocated for individual class payments and individual PAGA payments remains uncashed after the void date, the settlement administrator will make a second distribution to those who cashed their checks based on the same pro rata formula.

No claim form required

Class members do not need to file a claim to receive their payment. The settlement administrator will automatically mail checks to the address on file for all eligible class members. Those who have moved or plan to move should promptly notify the settlement administrator to ensure they receive payment.

Settlement administrator's mailing address: McKinney, et al. v. Scale AI Inc., et al., c/o Settlement Administrator, P.O. Box 26170, Santa Ana, CA 92799

Settlement administrator's phone number: 833-234-6281

Settlement administrator's fax number: 714-917-7455

Settlement administrator's email: info@McKinneyScaleAISettlement.com

Class members who wish to opt out of the settlement must submit a written and signed request for exclusion by Sept. 3, 2026. The request should include their name, address, telephone number and a statement that they wish to be excluded from the settlement. Those who opt out will not receive a class payment but may still receive a PAGA payment if eligible.

Class members who believe the number of workweeks or pay periods the settlement administrator credited to them is incorrect can submit a written challenge by Sept. 3, 2026, along with supporting documentation, such as pay stubs or other records.

How class members will be paid

The settlement administrator will issue mail checks to the address on file unless the class member updates it. Checks will include both the class payment and the PAGA payment (if eligible).

If a class members loses their check before cashing it, they may request a replacement before the check’s void date.

$12.5 million Scale AI settlement fund breakdown

The $12,500,000 settlement fund will include:

Settlement administration costs: Up to $100,000
Attorneys' fees: Up to $4,166,666.67
Attorneys' expenses: Up to $100,000
Service awards to class representatives: Up to $90,000 total ($15,000 each)
PAGA penalties: $500,000 ($325,000 to the state and $175,000 to PAGA class members)
Payments to approved class members: Estimated $7,543,333.33 (net settlement amount)

Important dates

Request for exclusion deadline: Sept. 3, 2026
Deadline to challenge workweek/pay periods: Sept. 3, 2026
Final approval hearing: Oct. 30, 2026

When is the Scale AI settlement payout date?

The settlement administrator will mail payments to class members after the court grants final approval.

Why did this class action settlement happen?

The lawsuit alleged Scale AI, Smart Ecosystem and HireArt misclassified workers as independent contractors; failed to pay proper wages, overtime and minimum wages; did not reimburse business expenses; and violated various California labor laws.

The companies deny all allegations but agreed to settle to avoid the cost and uncertainty of further litigation.