W2 employees have all kinds of protections that 1099 contractors don't. Paid sick time, FMLA leave, retirement plan contributions...A big difference is that 1099 contractors must pay their own self-employment taxes (15%) to cover Social Security and Medicare whereas W2 employees have half of that paid for by their company. (Economists would say that comes out of wages, but it still means $15/hour W2 is not directly comparable to $15/hour 1099.)