The U.S. Department of Labor has dropped its investigation into Scale AI’s compliance with the Fair Labor Standards Act, in accordance with a supply straight aware of the matter.
The FLSA is a federal legislation that regulates misclassification of workers as unbiased contractors and unpaid wages. TechCrunch first reported that Scale was the topic of such an investigation in March.
Upwork and Hireart, two of Scale AI’s HR companions that had been additionally being investigated for FLSA compliance per Inc. journal, are additionally not being investigated by the DOL, they every confirmed to TechCrunch.
Scale AI, which was valued final 12 months at $13.8 billion, will depend on a military of employees it categorizes as contractors to do crucial AI work, like labeling photos for Big Tech.
However, Scale has been sued by ex-workers alleging they had been underpaid and misclassified as contractors as a substitute of workers, denying them entry to advantages like sick go away.
It’s not clear precisely why the DOL dropped the probe. San Francisco-based Scale AI declined to remark, whereas the DOL didn’t reply to a request for remark.
There’s a number of attainable causes, although.
Techcrunch occasion
Berkeley, CA
|
June 5
BOOK NOW
A latest transfer from the DOL hints at a friendlier method to classifying employees as contractors, with the company asserting on May 1 that it was not imposing, a minimum of for now, a Biden-era rule which made this tougher.
Scale AI can be in search of favor with the Trump administration. Its CEO Alexandr Wang attended Trump’s inauguration (like many different tech CEOs) and has printed a letter urging Trump to “win the AI warfare.”
Meanwhile, Scale AI’s former managing director Michael Kratsios was confirmed in March as the brand new director of the White House’s Office of Science and Technology Policy.
The place includes advising the President on science and tech points, and has no oversight over the DOL. Kratsios didn’t instantly reply to a request for remark.
