Frequently Asked Questions

1. What are the Actions about?

Plaintiffs are former Scale AI independent contractors and/or workers placed by HireArt to work with Scale AI or Smart Ecosystem. The Actions accuse Defendants of violating California law by misclassifying workers as independent contractors or exempt employees, and by failing to properly pay wages, overtime wages, minimum wages, wages due upon termination, and reimbursable expenses; failing to keep required payroll and other employment records; failing to furnish safe and healthful employment or a place of employment; and failing to properly provide meal periods, rest breaks, meal and rest break premiums, and accurate itemized wage statements.

The Actions also accuse Defendants of failing to comply with California paid sick leave laws, failing to provide workers' compensation insurance, failing to properly provide a seventh day of rest, failing to comply with the Wage Theft Prevention Act, failing to comply with Labor Code section 432.5, failing to pay using a proper negotiable instrument, violating CalWARN and WARN, unlawfully assigning wages, and engaging in unfair competition. Based on the same claims, Plaintiffs also assert a claim for civil penalties under the California Private Attorneys General Act (Labor Code sections 2698, et seq.) ("PAGA").

Plaintiffs are represented in the Actions by Ryan J. Clarkson, Glenn A. Danas, Maxim Gorbunov, and Zarrina Ozari of Clarkson Law Firm, P.C.; Bryan Schwartz and Sam Goity of Bryan Schwartz Law, P.C.; and Laura L. Ho and Ginger Grimes of Dardarian Ho Kan & Lee (together, "Class Counsel").

Defendants strongly deny violating any laws, deny misclassifying any workers as independent contractors or exempt employees, and deny failing to pay any wages. Defendants contend they complied with all applicable laws and maintain that Contributors are independent contractors who are not subject to the wage-and-hour laws at issue.

2. What does it mean that the Actions have settled?

The Court has made no determination as to whether Defendants or Plaintiffs are correct on the merits. Plaintiffs and Defendants attended mediation with an experienced, neutral mediator, a retired judge, in an effort to resolve the Actions by agreement rather than continuing the expensive and time-consuming litigation process. The negotiations were successful, and Plaintiffs and Defendants negotiated a proposed settlement that is subject to the Court's final approval.

Both sides agree the proposed Settlement is a compromise of disputed claims. By agreeing to settle, Defendants do not admit any violation of the California Labor Code, do not admit that Contributors are not independent contractors, and do not concede the merits of any claims asserted by Plaintiffs.

Plaintiffs and Class Counsel believe the Settlement is a good deal for Class Members because Defendants have agreed to pay a fair, reasonable, and adequate amount considering the strength of the claims and the risks and uncertainties of continued litigation, and because the Settlement is in the best interests of the Class Members and PAGA Workers. The Court preliminarily approved the proposed Class Settlement as fair, reasonable, and adequate, authorized the Notice, and scheduled a hearing to determine final approval of the Class and PAGA Settlement.

3. What are the important terms of the proposed Settlement?

A. Defendants will pay $12,500,000.00 as the Gross Settlement Amount. Defendants have agreed to deposit the Gross Settlement Amount into an account controlled by the Administrator. The Administrator will use the Gross Settlement Amount to pay Individual Class Payments, Individual PAGA Payments, and the amounts described in paragraph B below.

B. Court-Approved Deductions From Gross Settlement. At the Final Approval Hearing, Plaintiffs and/or Class Counsel will ask the Court to approve the following payments from the Gross Settlement Amount:

1. Up to $4,166,666.67 (one-third of the Gross Settlement Amount) to Class Counsel for attorneys' fees, and up to $100,000.00 for litigation expenses. To date, Class Counsel have worked and incurred expenses on the Actions without payment.

2. Up to $15,000.00 as a Class Representative Payment to each Plaintiff (up to $90,000.00 total for all named Plaintiffs) for bringing the Actions, working with Class Counsel, and representing the Class. This will be the only compensation Plaintiffs receive other than their own Individual Class Payment and any Individual PAGA Payment.

3. Up to $100,000.00 to the Administrator for services administering the Settlement.

4. Up to $500,000.00 for the PAGA Payment, allocated 65% ($325,000.00) to the LWDA and 35% ($175,000.00) in Individual PAGA Payments to PAGA Workers based on their PAGA Pay Periods.

C. Net Settlement Amount Distributed to Participating Class Members. After the deductions described above, the Administrator will distribute the remainder of the Gross Settlement Amount (the "Net Settlement Amount") to Participating Class Members based on their Class Workweeks. The estimated Net Settlement Amount is $7,543,333.33.

D. Tax Allocation on Payments. For Participating Class Members who were Contributors during the Class Period, 100% of the Individual Class Payment will be allocated as non-wages (IRS Form 1099, if required). For Participating Class Members who were not Contributors during the Class Period, 10% of the Individual Class Payment will be allocated as wages (IRS Form W-2) and 90% as non-wages (IRS Form 1099), if required. All PAGA Workers will receive an IRS Form 1099 for their Individual PAGA Payment, if required. If there is a second distribution, funds distributed will be allocated 100% as non-wages (IRS Form 1099, if required), regardless of Contributor status during the Class Period.

Neither side is providing tax advice. You are responsible for paying all taxes on any payment you receive from the Settlement, and you should consult a tax advisor if you have questions.

E. Need to Promptly Cash Payment Checks. Every Settlement check will show a void date on its face. If a check is not cashed by the void date, it will be automatically cancelled. Participating Class Members and PAGA Workers are bound by the applicable release regardless of whether they cash their checks.

F. The Settlement Will Be Void if the Court Denies Final Approval. If the Court does not grant final approval, or enters a Judgment that is later reversed on appeal, Defendants will not pay any money, and Participating Class Members and PAGA Workers will not be bound by the Settlement or release any claims against Defendants.

G. Administrator. The Court has appointed Simpluris, Inc. as the neutral Administrator to send the Notice, calculate and make payments, and process Requests for Exclusion, objections, and challenges. See Question 9 for the Administrator's contact information.

H. Participating Class Members' Release of Released Class Claims. Upon entry of the Judgment, Participating Class Members will be legally barred from asserting any Released Class Claims. Unless you validly opted out, you cannot sue, continue to sue, or be part of any other lawsuit against Defendants or related entities for these claims.

The Participating Class Members will be bound by the following release of Released Class Claims:

“Released Parties” means Scale AI, Inc., Smart Ecosystem, Inc., Alexandr Wang, Dennis Cinelli, Daniel Berrios, Xiaote Zhu, HireArt, Inc., and each of its or their former and present parents, subsidiaries, and affiliates as well as each of its or their directors, officers, shareholders, owners, employees, partners, managers, customers (only as it pertains to work performed for the customers through Defendants), investors, attorneys, insurers, reinsurers, predecessors, successors, assigns, and any individual or entity which could be jointly liable with one or more Defendants.

PAGA Workers’ Release of Released PAGA Claims. Upon entry of the Judgment, all PAGA Workers will be barred from asserting the PAGA claims described below against Defendants, whether or not they exclude themselves from the Class Settlement. This means that all PAGA Workers, including those who are Participating Class Members and those who opt-out of the Class Settlement, cannot sue, continue to sue, or participate in any such PAGA claim against the Released Parties.

The PAGA Workers will be bound by the following release of Released PAGA Claims:

4. How will the Administrator calculate my payment?

A. Individual Class Payments. The Administrator will calculate each Individual Class Payment by dividing the Net Settlement Amount by the total number of Class Workweeks worked by all Participating Class Members during the Class Period, and multiplying the result by each Participating Class Member's own Class Workweeks.

B. Individual PAGA Payments. The Administrator will calculate Individual PAGA Payments by dividing $175,000.00 by the total number of PAGA Pay Periods worked by all PAGA Workers, and multiplying the result by the number of PAGA Pay Periods worked by each PAGA Worker.

C. Class Workweek/PAGA Pay Period Challenges. The number of Class Workweeks and PAGA Pay Periods credited to you, as recorded in Defendants' records, is stated in your Notice. If you disagree with either number, you must challenge it in writing by September 3, 2026. Your challenge must: (i) be in writing; (ii) state your full name; (iii) state that you are challenging your Class Workweeks and/or PAGA Pay Periods; (iv) state the number of Class Workweeks and/or PAGA Pay Periods you believe you completed in California during the Class Period and/or PAGA Period; (v) include documentation supporting the challenge; (vi) be signed; and (vii) be sent by fax, email, and/or mail to the Administrator by September 3, 2026.

Send copies, not originals, of pay stubs or other supporting records. Documents will not be returned to you. The Administrator will accept Defendants' calculation of your Class Workweeks and/or PAGA Pay Periods as accurate unless you submit records containing contrary information. The Administrator will resolve challenges based on your submission and on input from Class Counsel (who will advocate on your behalf) and Defendants' Counsel. The Administrator will promptly inform you of its determination. The Administrator's decision is final and cannot be appealed or otherwise challenged.

5. How will I get paid?

The Administrator will mail a single check to every Participating Class Member and PAGA Worker for their Settlement payment, consisting of their Individual Class Payment (if a Participating Class Member) and their Individual PAGA Payment (if a PAGA Worker). If there is a second distribution and you are eligible to participate, the Administrator will mail a single second-distribution check.

Your check will be sent to the same address as the Notice. If you change your address, notify the Administrator as soon as possible. See Question 9 for the Administrator's contact information.

6. How do I opt out of the Class Settlement?

To opt out of the Class Settlement, you must submit a Request for Exclusion to the Administrator no later than September 3, 2026.

The Request for Exclusion must: (i) be in writing; (ii) state your full name; (iii) state that you are requesting exclusion from the Class Settlement in McKinney, et al. v. Scale AI, Inc., et al.; (iv) be signed; and (v) be faxed, emailed, and/or mailed to the Administrator on or before September 3, 2026. If someone else submits the request on your behalf, it will not be valid.

Excluded Class Members (Non-Participating Class Members) will not receive an Individual Class Payment and will not be bound by the release of the Released Class Claims (see Question 3.H). You cannot opt out of the PAGA portion of the Settlement. Class Members who exclude themselves from the Class Settlement but qualify as PAGA Workers remain eligible for an Individual PAGA Payment and are still required to give up their right to assert Released PAGA Claims against Defendants.

7. How do I object to the Settlement?

Only Participating Class Members may object to the Class Settlement. Class Counsel and/or Plaintiffs will file a Motion for Final Approval and a Motion for Fees, Litigation Expenses and Service Payments with the Court. Upon reasonable request, Class Counsel (see Question 9) will send you copies of these documents at no cost. You can also view them on the Important Documents page or on the Court's website docket.

A Participating Class Member who disagrees with any aspect of the Class Settlement, the Motion for Final Approval, and/or the Motion for Fees, Litigation Expenses and Service Payment may object. The written objection must be sent to the Administrator by fax, email, and/or mail. The deadline for sending written objections to the Administrator is September 3, 2026. Be sure to tell the Administrator what you object to, why you object, and any facts that support your objection. Identify the Action, and include your name, current address, telephone number, approximate dates of service with Defendants, and your signature. See Question 9 for the Administrator's contact information.

Alternatively, a Participating Class Member can object (or personally retain a lawyer to object at their own cost) by attending the Final Approval Hearing. See Question 8 for specifics regarding the Final Approval Hearing.

8. Can I attend the Final Approval Hearing?

You can, but don't have to, attend the Final Approval Hearing at 9:00 a.m. on October 30, 2026, in Department 304 of the San Francisco Superior Court, located at 400 McAllister St., San Francisco, CA 94102. At the Hearing, the judge will decide whether to grant final approval of the Settlement and how much of the Gross Settlement Amount will be paid to Class Counsel, Plaintiffs, and the Administrator. The Court will invite comment from objectors, Class Counsel, and Defense Counsel before making a decision. You can attend (or hire a lawyer to attend) either personally or virtually via video call.

It's possible the Court will reschedule the Final Approval Hearing. You should check this website beforehand, or contact Class Counsel, to verify the date and time of the Final Approval Hearing. If you wish to attend the Final Approval Hearing remotely, you may contact Class Counsel, who can then request a remote appearance in accordance with the Court's procedures. See Question 9 for Class Counsel's contact information.

9. How can I get more information?

The Agreement sets forth everything Defendants and Plaintiffs have promised to do under the proposed Settlement. The easiest way to read the Agreement, the Judgment, or any other Settlement documents is on the Important Documents page. You can also contact Class Counsel or the Administrator using the information below, or consult the Superior Court website and enter the Case Number for the Action, Case No. CGC-24-620481. You can also personally review court documents in the Clerk's Office, Room 103 of the San Francisco Superior Court's Civil Center Courthouse.

Do not telephone the Superior Court to obtain information about the Settlement.

10. What if I lose my Settlement check?

If you lose or misplace your Settlement check before cashing it, the Administrator will replace it as long as you make a replacement check request to the Administrator before the void date on the face of the original check. If your check is already void, you will have no way to recover the money.

11. What if I change my address?

To receive your check, you should immediately notify the Administrator if you move or otherwise change your mailing address.