The ground transportation industrys use of independent contractors is increasingly being challenged in the courts, by regulatory authorities and, in some cases, in state legislatures.

Most recently, carriers have been battling efforts to reclassify independent contractors as employees in Washington, California and several states in the Northeast.

Additionally, an active plaintiffs bar -- that has found some fee revenue associated with class-action lawsuits -- is another factor.

California is one state that has stepped up audits of companies using independent contractors.

Legislation passed in the Golden State has tacked on fines for employers found intentionally misclassifying independent contractors.

Efforts by the Obama Administration to increase the number of audits of carriers that use independent contractors appear to have emboldened unions to push for state legislation to help regulators classify drivers as employees.

In September, the Internal Revenue Service and U.S. Department of Labor signed a memorandum of understanding announcing they would share information and cooperate in conducting audits to check if independent contractors should be reclassified as employees.

The IRS said that within a year or two a full 35 percent of its audits would focus on the issue of misclassification.

A recent Government Accountability Office study concluded that the federal government is losing billions of dollars in tax revenue on worker misclassification, and a Labor Department study indicated that up to 30 percent of employers misclassify their workers, the agencies said.

"Were here today to sign a series of agreements that together send a coordinated message: Were standing united to end the practice of misclassifying employees," Labor Secretary Hilda Solis said in a Sept. 19 statement.

The classification of a worker as either an employee or an independent contractor has significant implications for employers payment of payroll taxes and workers compensation, insurance and compliance with minimum wage, overtime and other laws.

And, with many state budgets shrinking, reclassification is seen, for certain states, as a way to generate additional tax revenue.

As part of the joint IRS-DOL agreement, labor commissioners and other agency leaders representing 11 states signed memorandums of understanding with the Department of Labor to participate in the effort.

The department has proposed a very potent "right-to-know" regulation that would require every employer that deals with an independent contractor to write a legal analysis of why the contractor meets the test to be classified as a contractor and not as an employee, and then give a copy to the contractor.

The regulation also would require the employer to keep a copy of the legal analysis on file for investigators.

Despite the challenges, recent changes in the composition of some state legislatures may actually have improved prospects for using independent contractors.

Still, the issue probably always will be subject to the ebbs and flows of politics.

Noted one expert: "Youre going to have to resolve it on a state-by-state basis, and youre always going to have (unions) trying to undermine independent status to create more employees who can be organized."