This person needs to have quit this job since long before right now. Then he should file a claim for unemployment benefits, giving as the reason he has quit the job that he has been forced to accept working as an independent contractor when he obviously is not one. They'll perhaps tell him he's not "monetarily eligible" and he needs to appeal this decision immediately, reporting exactly what has happened as far as the employer demanding to change the employees to independent contractors. This in no way means he doesn't also need to file the necessary forms to complain to the IRS, either.
This will get the state Department of Labor involved in the fact that this employer is sluffing off not only his federal taxes, but his state employer tax responsibilities as well. The OP may or may not be adjudicated to have wages to be approved for unemployment insurance, who knows what sort of employer reporting this employer has been doing in the past, but it will come to the forefront when a claim for unemployment benefits is filed.
As far as being approved for unemployment, the OP has an excellent reason to have quit the job. In any case, it is my advice DO NOT WORK ONE MINUTE LONGER for someone who does not pay you correctly and legally and on time, decides to call you a contractor ( in other words, asks you to do something that will, in the long run, get YOU in a lot of trouble with the IRS) much less someone who yells at you and abuses you.
It is obvious this guy has not checked the labor market lately, as there is a great shortage of available workers out there, and a job of some type on every corner. You're better off working for less for a legitimate employer than working in a semi bondage type situation for this person who obviously is a jerk if not a criminal. Though no labor laws protect you from most mistreatment at the hands of your employer, you most certainly can vote with your feet and get out of there and find something else, pronto!
I have spent many years watching people in employment situations, and I've never seen anybody "fix" a bad workplace with an employer who is out to cheat both the government and their own workers. Get away quickly, cut your losses.
So, the op needs to file the SS-8 and let the them make the call. If op was improperly treated as an IC, then he has rights. If he actually can be treated as an IC, then it is what it is.
Treating an employee as an independent contractor when they are not is a violation of CA (and all other states) labor laws. A person is either an IC or not.
The point being that we don't really have enough information to say, conclusively, that he did not qualify to be an IC. I agree it's likely that he didn't, but on the basis of what we have we really don't know for sure.
My point is if they treated him as an employee originally but he could qualify as an IC, there is nothing inherently wrong or unlawful with changing him to an iC.
It doesn’t usually go that way unless the employer has an epiphany and discovered all along he could treat then person as an IC when they didn’t realize it and then makes the change.
My point to commentator is op hasn’t given enough information to make a call either way yet commentar is giving all sorts of advice with the belief op must be an employee. It may be wiser to find out for sure whether the employer can treat him as an IC before jumping off the cliff. It would suck to follow commentators advice only to find out the op can be treated as an IC and not only loses out on the job but possibly UI as well.
I have seen this situation happen several times in my days, and I have many times seen an employer spontaneously volunteer to change many people to being independent contractors after being previously classified as employees. This usually happens when they are trying to avoid paying employer taxes and benefits and such. I have rarely seen it go the other way, where independent contractors are asked to become regular benefit receiving, tax taken out employees. And it is one of those situations like being pregnant, you either are or you are not. These employers rarely want to give up the privilege of telling their employees where and when to work, for example, but they do like having ability to forget about taxes and benefits.
Leaving a job where you are being treated as a contractor when you are not is not like jumping off a cliff. It is usually a very smart move, since being a contractor without autonomy about your work schedule and such takes away any and all of the advantages of working as a contractor, and gives you all the tax liabilities and problems associated with this work status including no unemployment benefits, no regular benefits, no withholding for tax purposes in exchange for a little bit more money at the beginning of the transaction.
The fact is, while it is likely the op is improperly classified as an IC, unless you actually know it to be true you should stop telling the op to take action based on being improperly classified. It could be detrimental to the op’s wallet if you are wrong.
Op needs to speak with the DOL, or IRS and attempt to figure out the truth. Then op can take actions based on that truth.