I have been a victim of a 1099 misclassification scheme. At the time I had graduated just three months ago and taken a job at a small web development agency tha

I have been a victim of a 1099 misclassification scheme. At the time I had graduated just three months ago and taken a job at a small web development agency that was run on a very tight budget- mangement was "top heavy" meaning there was about 1-2 managers per in-house developer and designer, and the rest of the team worked in India. They expected me to show up to the office every day 9-5, while I was working as an independent contractor, along with other treatment as employee (was given my own computer and desk, etc). As a few people have pointed out, yes this is common in exploitative job shops. Unfortunately it was beyond the statute of limitations when I found out I could take action by verifying status with the IRS. But I still have the physical printed out contract with me. It says $15/hr on 1099 as contract-to-hire with conversion to $20 on a W2 after 3-6 months. I was never put on a W2 and I have worked there for at least 18 months. Now to answer the actual question- how to prevent it? It's hard to say. The US has laws in place to prevent this but without acknowledgement of the problem, the bite is weak. A lot of these things occur due to simple ignorance of the victim's part. Perhaps a general "professional development" course to be taken in a junior of senior year of college could help smooth things out? Then less college graduates will be left behind, and there's less risk for them to go through the school of hard knocks after graduation. Such a course doesn't have to be limited to employee-employer or contractor relations. It can cover issues related to how to deal with workplace politics, understand what perception does to others at work, etc. There are many gotchas that people do not see entering the white-collar workforce.