The Department of Labor just dropped its investigation into Scale AI

Tech Crunch - May 9th, 2025

The U.S. Department of Labor has ceased its investigation into Scale AI's compliance with the Fair Labor Standards Act, which regulates the classification of workers and wage issues. This development affects not only Scale AI, valued at $13.8 billion, but also its HR partners Upwork and Hireart. Both companies have confirmed the end of the investigations. The probes were initially launched amid allegations that Scale AI misclassified its workers as contractors, potentially denying them benefits such as sick leave. Despite the conclusion of the investigation, neither the DOL nor Scale AI provided a comment on the decision.

This development occurs against a backdrop of changing labor policies under the current administration. Recently, the DOL indicated a shift in its approach to worker classification by pausing enforcement of a rule that aimed to make it harder to categorize workers as contractors. Furthermore, Scale AI seems to have connections with the Trump administration, as its CEO Alexandr Wang has engaged with the government and its former managing director now holds a significant position in the White House's Office of Science and Technology Policy. These factors may influence the broader landscape of labor rights and tech industry practices in the U.S.

Scale Ai U.S. Department Of Labor Upwork Independent Contractors Alexandr Wang Fair Labor Standards Act Michael Kratsios Worker Classification Hireart

Story submitted by Fairstory

RATING

7.8

Fair Story

Consider it well-founded

The article provides a well-researched and timely account of the U.S. Department of Labor's decision to drop its investigation into Scale AI, supported by credible sources. It effectively communicates the main facts and potential implications, although it could benefit from a wider range of perspectives and more detailed context regarding the legal and political factors involved. The story is clear and accessible, making it suitable for a broad audience, but its potential to provoke significant debate or drive policy changes is somewhat limited by the lack of deeper analysis or engagement with controversial aspects. Overall, it is a solid piece of journalism that raises important issues about labor rights and corporate practices in the tech industry.

Accuracy

The story demonstrates a high level of factual accuracy, with most claims supported by reliable sources. The central claim that the U.S. Department of Labor has dropped its investigation into Scale AI's compliance with the Fair Labor Standards Act is corroborated by multiple reports. The article accurately describes the FLSA's role in regulating worker classification and unpaid wages, aligning with standard legal definitions. The mention of Scale AI's valuation at $13.8 billion and its operational reliance on contractors is consistent with available data. However, the story's assertion that the exact reasons for the DOL's decision remain unclear could benefit from more explicit sourcing or evidence, though it is acknowledged as a common journalistic challenge when dealing with non-disclosures.

Balance

The article presents a reasonably balanced view of the situation by acknowledging both the cessation of the investigation and the ongoing legal challenges faced by Scale AI. However, it could provide a more comprehensive perspective by including viewpoints from labor rights advocates or former workers affected by the alleged misclassification. While it mentions the potential influence of political connections and policy shifts, it does not delve deeply into opposing perspectives or potential criticisms of the DOL's decision.

Clarity

The article is generally clear and well-structured, making it easy for readers to follow the main points. The language is straightforward, and the logical flow from the investigation's cessation to the potential reasons for this decision is well articulated. However, some readers might find the references to political connections somewhat tangential without further explanation of their relevance to the main story.

Source quality

The article cites credible sources such as TechCrunch and Reuters, which are well-regarded in the field of technology and business journalism. These sources lend authority to the claims made about the DOL's investigation and the valuation of Scale AI. However, the story would benefit from a broader range of sources, particularly those that could provide more insight into the perspectives of the workers involved or the internal deliberations of the DOL.

Transparency

The article is transparent in its reporting of the facts and acknowledges the lack of comment from both Scale AI and the DOL, which is crucial for understanding the limitations of the information presented. However, it could improve transparency by providing more context on the nature of the lawsuits against Scale AI and the specifics of the DOL's policy changes. Additionally, explaining the methodology for how the information was gathered could enhance reader trust.