You keep saying that converting from IC to employee would mean their base salary would be lower. Have you ever been an Independent Contractor? This simply isn't true.
Basically take the extra social security tax they have to pay, and subtract that from salary (adjust a bit since the lower salary also lowers the tax).
If they cover health insurance then subtract that as well.
> This simply isn't true.
It's lovely hearing that something I've actually experienced is not true.
I switched from contractor with flexible hours, to employee full time (with the same company), and my take home was lower as an employee, but then again I got health insurance.
If I had to do it again I would have stayed a contractor: I made more money, and I could shop around for better health insurance.
The company might have said no and/or given me fewer hours, so I guess that's a negotiation I would have done.
Of course in California the choice would be taken away from me.
Did you even negotiate the transition or did you just accept what your company told you? How often have you gone through this?