What would you do?
Your employer is paying you as a 1099. You answer phones, help customers and other administrative duties. Business becomes bad, and you are never paid on time, and you do not receive near your full pay on time (less than a quarter of the amount). Then because your employer is not paying you on time, or the full amount they advise you to go out and get another position. (Your money is being used to keep the business running). They even hint that you should go and get a retail position. Yet your employer owes you money.
As an employee, you cannot be paid via a 1099 - that is reserved for paying independent contractors.
If you are an employee the first place to go might be the department of labor, but that is going to open a can of worms and will almost certainly cost you your "job". I could conceivably shut the business down as well.
If you are an independent contractor then your only option is to sue for the monies owed you. Again, it will cost you your "job" unless you have a firm contract to do the work for a certain period and have fulfilled the obligations required of you in the contract.
I'd start by reviewing the difference between an employee and a contractor. You might start here:
http://www.irs.gov/Businesses/Small-Bus … mployee%3F
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