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The U.S. Department of Labor has degenerate its investigation into Scale AI ’s complaisance with the Fair Labor Standards Act ( FLSA ) , according to a reference directly familiar with the thing .
The FLSA is a federal constabulary that regulates misclassification of employees as main contractors and unpaid wages . TechCrunch first reported thatScale was the subject of such an investigationin March .
Upwork and HireArt , two of Scale AI ’s HR mate that were also being look into for FLSA complianceper Inc. mag , are also no longer being enquire by the DOL , they each confirmed to TechCrunch .
Scale AI , whichwas value last year at $ 13.8 billion , depends on an army of prole it categorizes as contractors to do critical AI oeuvre , like labeling image for Big Tech .
However , Scalehas been suedby ex - workers alleging they were underpaid and misclassified as contractors instead of employee , deny them memory access to benefit like sickish leave .
It ’s not clear exactly why the DOL drop the probe .
San Francisco - found Scale AI decline to point out . Updated on May 9 , 2025 – Scale AI confirmed this intelligence mail - publication , with spokesperson Joe Osborne assure TechCrunch it ’s proud of with the DOL ’s decision :
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“ We ’re pleased with this update , ” Osborne said . “ Creating new form of workplace in AI is vital to America ’s economic growth , and we ’re proud of the whippy earning opportunity offer through our platforms . ”
The DOL did n’t respond to a request for commentary .
There are several possible reasons for why the DOL dropped the investigation .
A late move from the DOL hints at a friendlier plan of attack to classifying workers as contractile organ , with the agencyannouncing on May 1that it was no longer impose , at least for now , a Biden - era linguistic rule which made this more hard .
Scale AI is also attempt favor with the Trump giving medication . Its CEO Alexandr WangattendedTrump ’s inauguration ( like many other technical school CEOs ) and haspublished a letter urging Trumpto “ win the AI warfare . ”
Meanwhile , Scale AI ’s former managing theater director Michael Kratsios wasconfirmedin March as the new director of the White House ’s Office of Science and Technology Policy .
The stance involves suggest the chairperson on science and tech issues , and has no oversight over the Labor Department . Kratsios did n’t directly reply to a postulation for comment .
