It sounds like they want to have their cake and eat it too. I.e. they want the advantages of of a 1099 contractor (not paying health insurance, etc) AND the adv

It sounds like they want to have their cake and eat it too. I.e. they want the advantages of of a 1099 contractor (not paying health insurance, etc) AND the advantages of having a 9-5 employee. If you don't mind losing the contract, I'd discuss their options. Something along these lines: "I don't think our expectations are lined up. I expected this to be a 1099 consultant position but you are treating it like it's a W2 position. Before the IRS gets all up in our business, how should be we fix this? Do you want to treat me as true independent consultant per IRS rules, have the subcontractor hire me on as a W2 employee and bill me out like we're doing now, or shake hands and go our separate ways?" In reality, this is why companies go through contracting agencies. The agencies don't (really) offer true employee benefits but the client companies still get the advantages of a 1099 employee (easy to "let go" at the end of the contract).