my fiance is a chef at a restaurant/ inn. the owner refuses to pay him legitimately. now she wants him to fill out a w-9 and file a 1099.

First off there is a massive body of California law on what constitutes an employee versus an independent contractor.  The employer does NOT simply get to pick which one they want to use, and I cannot think of any possible scenario in which a chef at a restaurant could possibly qualify as an independent contractor.  Second, it is significant tax evasion to pay an employee as an independent contractor when the person does not qualify as an independent contractor.  That is NOT a state-by state issue and MTG should know it. There are federal employment taxes that are not paid on contractors or by contractors.  The employer using the 1099 to evade those taxes is committing a crime.  Fortunately for your fiancee and his brother, there is nothing illegal under state or federal law about complying with her demands.  So they have three choices.  They can comply with her demands and simply ignore the legalities of it and file taxes as independent contractors. If they go that route, by the way, she issues the 1099, not the worker.  A 1099 is a report that you made potentially taxable payments TO someone that were not wages.  The worker never fills out a 1099.  The only problem with going that route is that they will have to pay self-employment taxes and will not be covered by things like workers comp.  I recommend refusing to go that route, but it would not get them in any legal trouble.  The second option is to refuse her demands and if she withholds pay, file a complaint with the Division of Labor Standards Enforcement of the Calif. Dept. of Industrial Relations.  http://www.dir.ca.gov/DLSE/  I'm guessing that if the employer is playing these kinds of games she probably isn't giving statutory rest and meal breaks either.  If not, your fiancee and his brother will also get an hour's pay for every missed break for as long as they worked there.  They are protected from retaliatory firing for filing the complaint.  Of course "protected" often only means you have a right to sue for wrongful termination after you are fired, but this is the most direct and "stand up" way to deal with this wrongful conduct, and DLSE will rip her a new one for withholding wages illegally like that.  The third option is to go along with her until they find a new job.  Then file taxes as an employee.  If an employer wrongfully treats you as an independent contractor and issues you a 1099 instead of a W-2, you can still file as an employee.  When you fill out your taxes, there are instructions for what to do if your employer refuses to withhold taxes and refuses to give you a W-2.  There is a pro-forma W-2 that you fill out for yourself and file with your taxes.  When the IRS gets one of those, they then go after the employer and make them prove you were actually a legitimate independent contractor.  As I said, I cannot think of any way a chef or cook in a restaurant could possibly be an independent contractor.

If the restaurant owner is asking you to fill out a W-9 and is going to give you a 1099 then that is legitimate.  It just means that she is not taking out taxes and that your boyfriend is considered an independent contractor. 

Has your boyfriend been keeping track of his wages and the amount that he has been paid?  He should have been and hopefully hs been paid by check.  If you have any other concerns see an accountant or lawyer in your area.