It depends on your compensation and your expenses.
Suppose your employer pays $100 an hour on a W-2. They also pay $7.65 in social security and medicare tax, and they withhold $7.65 in social security and medicare from you (plus federal and state income tax but that's the same either way).
Now, if you go 1099-MISC, will your gross be $100 per hour (costs you more in tax, saves money for the employer) or will your gross be $107.65 (same net cost to the employer, same net cost to you.)
Also, with self-employment, it is easier to deduct job-related expenses like mileage and a home office, and those expenses reduce your taxable income AND your net profit subject to SE tax. If you are a W-2 employee, your work-related expense deduction is limited by the 2% and itemizing rules, and work expenses do not reduce your income subject to FICA and medicare tax.
But I agree, that choice is probably not legal. Someday, someone could sue them, and that could come back on everyone else in your situation.
