The US Department of Labor is investigating the data labeling Startup Scale AI for compliance with the Fair Labor Standards Act, has learned Techcrunch.
This is a federal law that regulates unpaid wages, incorrect classification of employees such as contractors and illegal retribution against employees.
The research has been active since at least August 2024, a document seen by Techcrunch shows. And it is underway, according to a person who is immediately familiar with the issue.
The mere existence of an investigation does not mean that the AI scale has of course done something wrong, and the research could find or be rejected for the company.
Scale AI is located in San Francisco and was appreciated at $ 13.8 billion last year. It is based on an army of employees who categorizes it as contractors to do essential AI work, such as labeling images for Big Tech and other organizations.
Scale AI spokesperson Joe Osborne told Techcrunch that the investigation had started during the previous presidential administration and that scale AI was of the opinion that her work construction, testing and evaluation of AI was misunderstood by supervisors at the time.
Osborne said that Scale AI worked extensively with the DOG to explain his business model and that conversations have been productive. More generally, Osborne said that scale AI brings more “flexible opportunities for work in AI” to Americans than any other company and that feedback from its contributors is “overwhelmingly positive”.
“Hundreds of thousands of people use our platform to show their skills and earn extra money,” said Osborne.
Scale AI is indeed a popular performing work platform. But it has recently been confronted with legal challenges from some former employees about his work practices. Two lawsuits were brought against the startup – one in December 2024 and the other in January 2025 – of former employees who claimed that they were underpaid and incorrectly classified as contractors instead of employees, which refuses access to protections such as overtime and disease days.
Scale AI has strongly disputed the lawsuits and says that it fully complies with the law and works to ensure that his wage rates meet or exceed the local living standards.
Scale AI’s international work practices were also the subject of an investigation by the Washington Post in 2023. Employees abroad described by the post demanded work at Lage Loon as contractors. At the time, the company said that the wage rates were constantly improving.
The US Department of Labor website Says that it can solve most cases administratively, but that employers who violate the law can be subject to fines and possibly imprisonment. De Dol also has the authority to force employers to classify their employees as employees.
In February 2024, for example, the start -up of hotel staff Qwick arranged a DOL case by paying $ 2.1 million and announcing that all employees in California perform work using the QWick app as employees, Bloomberg Law reported.
Scale AI also seems to be one of the Silicon Valley companies that are looking for and see a favor in the new presidential administration. Are CEO and founder Alexandr Wang for example, visited The inauguration of Donald Trump in January like many other technical CEOs.
More tell, Scale AI’s former director, Michael Kratsios, is the nominee of President Trump as the new director of the Office of Science and Technology policy of the White House. Kratsios previously served as Chief Technology Officer of the US during the first Trump administration.
In this position, Kratsios Trump will advise on science and technology cases. This position has no supervision of the Ministry of Labor. Kratsios was part of a Senate hearing On February 25, but has not yet been confirmed. Kratsios did not respond to a request for comment.
Spokesperson Michael Petersen of the US Department of Labor told Techcrunch that it can confirm or refuse the existence of any research, according to long -existing policy.