The U.S. Department of Labor has stopped investigating compliance with the AI’s Fair Labor Standards Act (FLSA), according to sources who are directly familiar with the issue.
FLSA is a federal law that regulates misclassification of employees as independent contractors and unpaid wages. TechCrunch first reported that the scale was the subject of such a survey in March.
Upwork and HireArt are two AI HR partners who were also being investigated for FLSA Per Inc. Magazine, and are no longer being investigated by DOL.
Valued at $13.8 billion last year, the scale AI relies on an army of workers classified as contractors to perform important AI tasks, such as labeling Big Tech images.
However, the scale has been sued by former workers who claim to be low and misclassified as contractors on behalf of employees, denying access to benefits like sick leave.
It is not clear why DOL dropped the probe.
The San Francisco-based AI, a scale of size, declined to comment. Updated May 9, 2025 – Scale AI confirmed the publication of this news after it has been published.
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“I’m happy with this update,” Osborne said. “Creating new forms of work with AI is essential to American economic growth, and we are proud of the flexible revenue opportunities offered through our platform.”
DOL did not respond to requests for comment.
There are several reasons why DOL dropped the probe.
Recent moves from DOL suggest a more friendly approach to classifying workers as contractors, and announced on May 1 that, at least for now, it is no longer in place as a Biden-era rule that made this even more difficult.
Scale AI is also hoping to favor the Trump administration. CEO Alexandre Wang attended Trump’s inauguration (as with many other high-tech CEOs) and issued a letter urging Trump to “win the AI war.”
Meanwhile, Michael Kratsoos, former managing director of Scale AI, was confirmed in March as the new director of science and technology policy at the White House.
This position includes advising the President on issues of science and technology and does not oversee the DOL. Kratsios did not immediately respond to requests for comment.