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13h ago

Department of Labor Ends Probe Into Scale AI and HR Partners Following Policy Shift

The DOL dropped its investigation into Scale AI, Upwork, and Hireart after suspending enforcement of a Biden-era contractor classification rule, but lawsuits from former workers continue.

The offices of artificial intelligence tech company Scale AI in Montreal, Quebec, Canada April 7, 2024. REUTERS/Evan Buhler

Overview

  • The Department of Labor has officially closed its investigation into Scale AI, Upwork, and Hireart for potential Fair Labor Standards Act violations.
  • The decision follows a May 1 policy change in which the DOL announced it would no longer enforce a Biden-era rule tightening contractor classification requirements.
  • Scale AI, valued at $14 billion, relies heavily on contractors for data labeling tasks and has faced lawsuits from former workers alleging misclassification and underpayment.
  • Political connections have drawn scrutiny, including CEO Alexandr Wang’s ties to the Trump administration and former managing director Michael Kratsios’s recent appointment to a senior White House science role.
  • While the DOL investigation has concluded, legal action from ex-workers over alleged labor violations is ongoing, keeping the company under legal and public scrutiny.