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They can still work for less as a contractor, if they want, right?

Whether someone is an employee vs a contractor solely depends on the "economic reality" of their job. Neither the employer nor the employee can choose to have it classified as a contractor relationship if it isn't actually one.

For example, if Subway determines how, where, and when I make the sandwiches, and provides all the equipment and materials, then I am a de facto employee. Even if both Subway and myself voluntarily agrees that I am a contractor for whatever reason (sidestepping minimum wage laws in this case), and signs a service contract to that effect, I am still treated as an employee under the Fair Labor Standards Act.

[0] https://www.dol.gov/whd/workers/Misclassification/misclassif...

[1] https://www.dol.gov/whd/regs/compliance/whdfs13.htm

I disagree completely that employees and employers can't choose whether they are contractors. It's almost always better for companies to hire contractors, that's why they work really hard to structure it that way (see uber). Employees are more mixed in their preferences, but in my long career as a dev I've seen that being an employee is better than being a contractor.

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