Published
July 24, 2026
This settlement resolves claims that AI-data company Scale AI, Smart Ecosystem, and staffing firm HireArt misclassified California workers who labeled data and helped train AI models as independent contractors. If you did that work in California, you may be mailed a check automatically — there is no claim form to file.
What Is This Settlement About?
Scale AI, Inc., Smart Ecosystem, Inc., and staffing company HireArt, Inc. — along with several individual defendants — agreed to a settlement totaling $12,500,000 to resolve a group of related class action lawsuits (the "Actions") brought by former workers in California. The named plaintiffs are former Scale AI independent contractors and workers placed by HireArt to work with Scale AI or Smart Ecosystem. The case is captioned McKinney, et al. v. Scale AI, Inc., et al. and is pending in the Superior Court of California, County of San Francisco (Case No. CGC-24-620481).The lawsuits accuse the defendants of violating California law by misclassifying these workers as independent contractors (or exempt employees) and, as a result, allegedly failing to properly pay minimum wages, overtime, and wages due at termination; failing to reimburse business expenses; failing to provide compliant meal and rest breaks; failing to provide accurate itemized wage statements; and a range of related wage-and-hour and recordkeeping claims. Based on the same allegations, the plaintiffs also brought a claim for civil penalties under California's Private Attorneys General Act (PAGA), in which the plaintiffs stand in the shoes of the State of California.
The defendants strongly deny that they violated any laws, deny that they misclassified anyone, and deny failing to pay any wages. They maintain that Contributors are independent contractors who are not subject to the wage-and-hour laws at issue, and they agreed to settle to avoid the risk, expense, and uncertainty of continued litigation without admitting any wrongdoing. Both sides reached the proposed settlement through mediation before a neutral, retired-judge mediator, and the court has granted preliminary approval and authorized notice to the class. The court has not yet decided whether to grant final approval.
Status
Pending Final Approval
Opt-Out / Object By
September 3, 2026
Do nothing to stay in and be paid
Estimated Payout
Share of ~$7.54M net
Cash · pro rata by Class Workweeks · $12.5M gross fund
Proof Required
Automatic Payment
No claim form to file — a check is mailed automatically
Background: What Is Scale AI?
Scale AI, Inc. is a San Francisco-based technology company founded in 2016 by Alexandr Wang. It supplies the labeled training data that powers modern artificial-intelligence systems — recruiting large numbers of people to annotate images and text, write example responses, and review and clean the raw data that foundation models learn from. Scale has provided this data-labeling work for many of the leading AI developers, and it operates worker-facing platforms such as Outlier and Remotasks through which contributors pick up tasks.In June 2025, Meta Platforms announced a multibillion-dollar investment in Scale AI (reported at roughly $14 billion for a large minority stake), and founder Alexandr Wang left to help lead Meta's AI efforts, with the company continuing under new leadership. This lawsuit is separate from that transaction — it concerns how Scale AI and its staffing partner HireArt classified and paid the California contributors who performed the annotation and AI-training work, not the Meta deal.
The workers at the center of the case — the settlement calls them "Contributors" — include people who did jobs such as Generative AI Annotators, Prompt Engineers, and Subject Matter Experts. The lawsuits allege that California law entitled these workers to employee protections that they did not receive because they were treated as independent contractors. The defendants dispute that characterization. Nothing in the settlement is a finding that the defendants did anything wrong.
Who Qualifies?
You are a member of the Settlement Class if, at any time from December 10, 2020 through February 28, 2026 (the "Class Period"), you either:• Provided services to the defendants as a Contributor while residing in California; or
• Were placed by HireArt to perform services similar to a Contributor with Scale AI or Smart Ecosystem while residing in California.
"Contributors" include individuals classified as independent contractors performing services for the defendants, such as Generative AI Annotators, Prompt Engineers, Subject Matter Experts, and similar roles, including through platforms like Outlier and Remotasks. For the settlement, "residing in California" generally means you had a California address associated with your platform account, tax form, or wage statement, or the defendants can otherwise reasonably verify you performed work in California.
A separate but overlapping group, called "PAGA Workers," covers people who did that work while residing in California during the "PAGA Period" — October 29, 2023 through February 28, 2026. This case is one of a number of California worker-classification and wage-and-hour matters; if you did similar gig or contract work, you may also be interested in the Guitar Center wage and hour settlement and the AT&T Washington meal and rest break settlement.
How Much Can You Get?
The defendants will pay a Gross Settlement Amount of $12,500,000. After court-approved deductions, the remaining money (the "Net Settlement Amount," estimated at about $7,543,333.33) is distributed to participating class members. The Administrator calculates each Individual Class Payment by dividing the Net Settlement Amount by the total Class Workweeks worked by all participating class members, then multiplying by your own Class Workweeks — so the amount varies from person to person based on how much you worked during the Class Period. Your own estimated payment is printed on the notice mailed to you.The deductions the court is asked to approve from the gross fund include: up to $4,166,666.67 (one-third) in attorneys' fees plus up to $100,000 in litigation costs for Class Counsel; up to $100,000 to the Administrator; service payments to the class representatives (subject to court approval); and up to $500,000 for PAGA penalties. Of the PAGA amount, 65% ($325,000) goes to the California Labor and Workforce Development Agency and 35% ($175,000) is paid to PAGA Workers as Individual PAGA Payments, calculated pro rata by each worker's PAGA Pay Periods.
According to the notice, settlement payments are generally allocated as non-wage amounts reported on an IRS Form 1099, with a portion allocated as wages (IRS Form W-2) for certain class members who were not Contributors during the Class Period. OpenClassActions.com does not provide tax advice; for questions about how a settlement payment affects your taxes, contact the IRS or a qualified tax professional.
How Do You Get Paid? (Nothing to File)
There is no claim form for this settlement. If the court grants final approval and you do not exclude yourself, the Administrator will automatically mail you a single check covering your Individual Class Payment (if you are a participating class member) and your Individual PAGA Payment (if you are a PAGA Worker). The only thing you need to do is make sure the Administrator has your current mailing address — if you move, update your address through the official settlement website so your check reaches you.Every check shows a void date on its face. If a check is not cashed by the void date, it is automatically cancelled, and you remain bound by the release whether or not you cash it. If more than $10,000 in the aggregate remains uncashed after the void date, there is a second distribution to class members who cashed their checks; if less than $10,000 remains, those funds go to the designated cy pres recipient, Per Scholas.
Your Options: Do Nothing, Exclude, Object, or Challenge Your Workweeks
Do nothing — you stay in the Settlement Class, are paid automatically, and give up your right to sue the defendants over the released claims once the court enters judgment.Exclude yourself (opt out) — to keep your right to pursue the class claims on your own, mail, fax, or email the Administrator a signed written Request for Exclusion by September 3, 2026. If you opt out, you will not receive an Individual Class Payment and will not be bound by the release of the Released Class Claims. Note: you cannot opt out of the PAGA portion — a PAGA Worker who opts out of the Class is still paid an Individual PAGA Payment and still releases the PAGA claims.
Object — only participating class members (those who do not opt out) may object. Send a written objection to the Administrator by September 3, 2026, explaining what you object to and why, or ask to speak at the Final Approval Hearing.
Challenge your Class Workweeks / PAGA Pay Periods — the number of Class Workweeks and PAGA Pay Periods credited to you (which determine your payment) is stated on your notice. If you disagree, submit a signed written challenge with supporting documentation (copies, not originals) to the Administrator by September 3, 2026. The Administrator's decision on a challenge is final.
Key Dates and Timeline
• Class Period: December 10, 2020 – February 28, 2026• PAGA Period: October 29, 2023 – February 28, 2026
• Deadline to opt out, object, or challenge workweeks: September 3, 2026
• Final Approval Hearing: October 30, 2026 at 9:00 AM, Department 304, San Francisco Superior Court
• Payments: mailed automatically after final approval and once the settlement becomes effective
The Final Approval Hearing date can change by court order, so confirm on the official settlement website or the court's docket if you plan to attend. You do not need to attend the hearing to be paid.
Frequently Asked Questions
Who qualifies for the Scale AI (McKinney) settlement?
The Class includes everyone who, from December 10, 2020 through February 28, 2026, either provided services to the defendants as a Contributor while residing in California, or was placed by HireArt to perform similar services with Scale AI or Smart Ecosystem while residing in California. Contributors include people classified as independent contractors doing work such as Generative AI Annotators, Prompt Engineers, and Subject Matter Experts, including through the Outlier and Remotasks platforms.
Do I have to file a claim to get paid?
No. There is no claim form. If the court grants final approval and you do not exclude yourself, the Administrator will automatically mail you a single check for your Individual Class Payment and any Individual PAGA Payment. Update your mailing address through the official settlement website if it changes so your check reaches you.
How much will I receive?
The Gross Settlement Amount is $12,500,000 and the estimated Net Settlement Amount is about $7,543,333.33. Your Individual Class Payment is based on how many Class Workweeks you worked during the Class Period relative to all participating class members, so amounts vary by person. Your own estimated amount is printed on the notice mailed to you.
What is the PAGA part of the settlement?
Up to $500,000 of the fund is allocated to PAGA penalties, split 65% ($325,000) to the California Labor and Workforce Development Agency and 35% ($175,000) in Individual PAGA Payments to PAGA Workers based on their PAGA Pay Periods. You cannot opt out of the PAGA portion; a PAGA Worker who excludes themselves from the Class Settlement is still eligible for an Individual PAGA Payment and still releases the PAGA claims.
What are the deadlines?
The deadline to opt out (request exclusion), object, or challenge your Class Workweeks or PAGA Pay Periods is September 3, 2026. The Final Approval Hearing is scheduled for October 30, 2026. If you do nothing, you stay in the Class, are paid automatically, and give up the released claims against the defendants.
Sources
• Official Settlement Website: McKinney Scale AI Settlement.com• Superior Court of California, County of San Francisco, McKinney, et al. v. Scale AI, Inc., et al., Case No. CGC-24-620481
For more class actions keep scrolling below.
Settlement Amount
$12,500,000
Case Title
McKinney, et al. v. Scale AI, Inc., et al.
Case Number
CGC-24-620481
Court
Superior Court of California, County of San Francisco
Final Approval Hearing
October 30, 2026 at 9:00 AM
Department 304, 400 McAllister St., San Francisco
Administrator
Simpluris, Inc.
Official Website
McKinney Scale AI Settlement.com
