The Justice and Labor departments are squabbling about whether a small band of federal agents who specialize in investigating organized crime in the labor movement should be allowed to carry guns, make arrests and assume other police powers.

The Labor Department says the 75 agents in its Office of Organized Crime and Racketeering need the additional authority because their investigations often put them in dangerous situations.

But the Justice Department maintains that the agents don't need police powers because they spend most of their time examining union paperwork. If they get into trouble, they can always call on the FBI, agency officials say.

Sen. Orrin G. Hatch (R-Utah), chairman of the Senate Labor and Human Resources Committee, who recently held two days of hearings on the dispute, said the flap really amounts to a "a turf fight . . . . The Justice Department doesn't want to turn something over to the Labor Department."

An aide said Hatch plans to introduce legislation this session that would give the Labor agents the power to carry guns, make arrests, engage in electronic surveillance, carry out undercover operations and pay informers.

The agents don't have those powers now because they are part of the Labor Department's inspector general's staff, which generally investigates fraud, waste and abuse in federal programs. (The only inspector general's office that has police powers is at the Agriculture Department, where it is limited to food stamp fraud investigators.)

But while the organized crime agents are technically part of the IG office, they spend most of their time working with the Justice Department's strike force on organized crime.

All of the other members of the strike force have full police powers--agents and inspectors from the FBI, Immigration and Naturalization Service, Drug Enforcement Agency, U.S. Marshals Service, Secret Service, Internal Revenue Service, U.S. Customs Service, Treasury's Bureau of Alcohol, Tobacco and Firearms and the U.S. Postal Service.

The Justice Department can deputize the IGs and give them police powers, but it rarely does that, Hatch said. The IGs claim Justice wants to keep them under the FBI's control.

However, D. Lowell Jensen, assistant attorney general in charge of the Criminal Division, told Hatch's hearing that the IGs don't need weapons because 70 percent of their investigations are in cooperation with other strike force members, usually the FBI. He said the IGs "are trained to handle paperwork of unions and the operations of unions, not to operate wire taps or engage in undercover operations."

The IGs and several other witnesses disagreed. A state police officer from New Jersey said troopers had to protect a witness in a racketeering case there for six weeks because the IGs couldn't carry guns. It cost the state $14,000 to do what the IGs could have done, he said.

In 1980, two unarmed IGs were assigned to protect convicted murderer Ralph Picardo, a government witness against several mob figures in New Jersey, according to documents the IGs gave Hatch. On several occasions, the IGs were unable to get help from the FBI or local police, which meant they had to travel unarmed with Picardo even though a "mob contract" had been put on his life, the documents said. The IGs later learned that Picardo had been carrying a gun illegally because he knew the IGs weren't armed.

Hatch said Labor Department documents showed other strike force members often were reluctant to take time away from their own investigations to pursue leads from the IGs. The IGs had to drop an investigation into the selling of union memberships in Pittsburg, Hatch said, because the FBI wasn't interested.

"What makes this particular loss so alarming," said Hatch, "is that some who bought their union membership--who never passed their welding tests--were working on nuclear power plants in Pennsylvania and Ohio."

Jensen remained unconvinced. "Why create another FBI by giving additional powers to the Labor Department agents?" he asked. That would cause confusion in the task force, he said, when the IGs bumped heads with the FBI.