Some contractors who worked on OpenAI projects say Handshake AI is withholding thousands of dollars in pay

• Some contractors working on OpenAI projects said Handshake AI has withheld their pay.
• Handshake AI cut off access to the projects and told some workers they'd violated their contract.
• Data annotators help train AI models and can make hundreds of dollars an hour.

Some contractors working for Handshake AI say the AI training startup has denied them up to several thousand dollars each for work they performed, after accusing them of breaking platform rules.

Dozens of others who claim to have worked for Handshake have shared similar stories on Reddit, and the company has faced lawsuits from two contractors over withheld pay.

San Francisco-based Handshake AI expanded from a job platform aimed at young professionals to the data-labeling industry. It's part of a slew of startups that pay hundreds of thousands of part-time contractors around the world to filter, rank, and train AI responses for the world's largest AI companies. This data work helps improve everything from laundry-folding robots to OpenAI's ChatGPT.

Five contractors who worked on various OpenAI projects told Business Insider that Handshake suspended their accounts without warning between the end of December and January, and four of those contractors were not paid for their work. The workers said they went to log in to work and learned their accounts had been suspended.

The contractors said that when they flagged the issue, the company told them they had violated their contract, leading to a termination. As a result, the company said the workers were ineligible for payment.

In correspondence with Handshake support seen by Business Insider, one contractor was told that they violated one or more of the three platform requirements: There were "discrepancies" in background credentials provided; the time taken to complete tasks was three to four times higher than benchmarks; and tasking was done from a non-US location, which was not allowed.

The contractor denied those violations to Handshake and Business Insider and said that those concerns could have been flagged before they spent about 50 hours working on the platform. The person, who is based in the US, said they were not compensated for any of this work, amounting to hundreds of dollars in unpaid labor.

"This decision is final. There is no appeal process, and any work associated with this violation is not eligible for payment. We will not be able to offer further consideration on this matter," Handshake support wrote to the contractor in an email.

The three other contractors described nearly identical experiences. In total, these workers reported thousands of dollars in unpaid wages.

A representative for Handshake declined to comment. OpenAI did not respond to Business Insider's requests for comment.

Matt Dunn, a partner at Getman, Sweeney, & Dunn, who specializes in labor law, said companies sometimes include provisions in the contracts that allow them to withhold pay if workers are found to be in violation of their contract.

"If they are truly independent contractors and classified correctly and there is a breach of the contract, the company could deny that payment," Dunn told Business Insider, speaking generally about contractors. "If the workers have been misclassified, the non-payment of wages would be a violation of federal or possibly state law."

The AI gig economy

Handshake CEO Garrett Lord said on a July podcast appearance that Handshake contractors make an average of over $100 to $125 an hour on the platform, applying their math, coding, or legal expertise to AI training projects. He said that the work is moving from generalist to specialist. Current freelance opportunities on the platform range from $75 per hour for software engineers and improv actors, $175 for investment bankers, and $300 and higher for those with medical degrees or Ph.D.s.

The company was last valued at $3.5 billion in January 2022, before its expansion into AI training. Handshake's investors include Coatue Management, Spark Capital, Kleiner Perkins, and Lightspeed Venture Partners, according to PitchBook.

This is not the first time contractors have complained about unpaid wages from Handshake.

In November, a contractor sued the startup in small claims court for $9,600 in income lost. In mid-January, the contractor filed to dismiss the case.

In August, a separate contractor filed an unpaid wages lawsuit against the company. They said that Handshake withheld their pay after accusing them of using AI to complete their work, even though Handshake's policy "permitted the use of ChatGPT." Handshake's current contractor agreement says that using LLMs "is strictly prohibited unless otherwise authorized in writing by Handshake." Business Insider could not confirm whether this clause was included when this contractor started working for Handshake. The case was resolved in October, with the court ruling that the contractor should be paid $6,475, the amount they said they were owed.

Handshake is one of many contracting companies capitalizing on the AI boom. As tech companies race to build large language models, the demand for human data annotation has become a multibillion-dollar market. What was once largely low-paid and generalist work has increasingly shifted toward specialist skills — from experts in law and finance to STEM.

The rapid growth of the sector has also drawn some external scrutiny. Scale AI, one of the largest players in the data labeling industry, has faced multiple lawsuits and labor complaints from contractors who allege unpaid wages and misclassification as contractors instead of employees. The company has disputed the allegations.

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