Scale AI Under Investigation By U.S. Department Of Labor For Fair Pay Practices

The U.S. Department of Labor (DOL) is investigating the American data-annotation and AI–training startup Scale AI for possible Fair Labor Standards Act vioations.

According to TechCrunch, the investigation has been active since 2024 but the company hasn’t been accused of any law violation yet.

The law regulates employment aspects such as illegal retaliation against workers, minimum wage, unpaid wages, and misclassification of employees as contractors.

Scale AI, founded in 2016 and backed by Nvidia and Microsoft, has been previously accused of exploitation of Kenyan workers to train AI through the platform Remotasks, making them quit operations in the country as complaints grew.

Other ex-workers in the United States have filed a lawsuit against the company for violating minimum wage rates and misclassification of employees as contractors.

Joe Osborne, Scale AI spokesperson, told TechCrunch that the current investigation was initiated under the previous administration and that the company’s system had been misunderstood by previous regulators.

Alexandr Wang, CEO and founder of Scale AI, attended President Trump’s inauguration in January and signed a contract with the U.S. government to support military planning this week.

Osborne assured that they have been collaborating with the DOL to meet requirements and explain their gig-based business model. “Hundreds of thousands of people use our platform to showcase their skills and earn extra money,” he said.

The startup is based in San Francisco and has shown significant growth in the past few years. Scale AI was valued at $13.8 billion last year, and has been expanding its partnerships since then. Just a few days ago, the company also signed a new contract with Qatar to improve and modernize government services during the next five years.