This matters more in these two industries specifically because the work looks like contractor work on paper (drivers own trucks, agents work on commission) while often functioning like employment in practice (a set schedule, dispatch-level direction, a supervisor, exclusive reliance on one company for income).
The control test, applied to drivers and agents
Under the common-law control test, regulators weigh three things, and none of them settles the question on its own.
Behavioral control. Does dispatch tell a driver the route, the schedule, and the load, or does the driver run their own business and simply contract for this one haul? Does a broker dictate an agent's hours, scripts, or lead-follow-up process, or does the agent run their own practice under the brokerage's license?
Financial control. Does the driver own or lease the truck, cover their own fuel and maintenance, and haul for multiple companies? Or is the truck company-owned, the schedule fixed, and this their only source of income? Does the agent have their own marketing budget and client base, or are they fully dependent on leads the brokerage assigns?
The relationship itself. Is there an ongoing, indefinite expectation of work, company equipment, or an exclusivity arrangement that functions like employment, regardless of what the agreement states?
Answering "yes, we control that" to most of these questions means the relationship is probably an employee relationship, no matter what the 1099 paperwork says.
Why this is a sharper risk in these two verticals specifically
Trucking and logistics. Owner-operator arrangements are common and often legitimate, a driver who owns their truck, sets their own schedule, and hauls for multiple carriers looks like a real contractor. The risk shows up when a carrier treats a 1099 driver like a W2 one in practice: fixed routes, dispatch-mandated schedules, company-branded trucks, no other clients. California's ABC test (used under AB5) makes this especially strict: a worker is presumed an employee unless the hiring company proves all three prongs, that the worker is free from the company's control, performs work outside the company's usual course of business, and is customarily engaged in an independently established trade. The industry fought this and lost: the Ninth Circuit held that federal law (the FAAAA) does not preempt AB5, the Supreme Court declined to review that in 2022, and the California Trucking Association abandoned its remaining appeal in 2024. AB5 applies to owner-operators in California, and that is settled. The practical caveat is enforcement rather than legality, since the state has brought relatively little AB5 action against carriers so far, which is a very different thing from the rule not applying.
Real estate brokerages. Agents are classified as independent contractors industry-wide, and that's generally defensible, but the carve-outs are narrower than most brokerages assume. They are purpose-specific rather than general: per NAR, roughly thirty states exempt licensees for workers' compensation and twenty-nine for unemployment insurance, and federal tax law treats a qualifying agent as a non-employee under 26 U.S.C. 3508. California exempts real estate licensees from the ABC test entirely (Labor Code 2778, routing through Business and Professions Code 10032(b)), but applies the older Borello control test in its place, so control still decides the question. The risk isn't the classification itself; it's everything layered on top of it: a brokerage that mandates specific hours, scripts, lead-handling procedures, or exclusive use of brokerage tools starts to look like it's exercising employee-level control, which undermines the contractor classification even where a statutory carve-out exists.
What it costs when this is caught
Exposure typically stacks across every year the misclassification was in place: back payroll taxes, unpaid overtime, workers' compensation premium gaps, penalties, and interest. For a trucking company, a DOT audit or a driver's workers' comp claim after an accident is a common trigger, because an injured "contractor" who was actually functioning as an employee can surface the gap at the worst possible moment, mid-claim, with no warning. For a brokerage, it's usually a departing agent's wage claim or a state labor board complaint, not a routine audit.
The bill is rarely one dramatic number. It's back taxes plus overtime plus workers' comp exposure plus penalties, compounded across however many years and however many workers were classified the same way.
How to fix it without destabilizing the business
Don't reclassify everyone overnight. Assess each role against the control test above, fix the clearest misclassifications first (the driver with a fixed schedule and company truck, the agent working mandated hours under direct supervision), document the reasoning role by role, and rebuild the intake process so new drivers and agents start correctly classified instead of drifting into the same gap over time.