1099 and W2

The employee can't switch back and forth at his/her choice for two reasons, so if uncomfortable with this, don't allow it.
1) First, remember, employment is "employment at will": the employer, not the employee, controls the terms of the job. The employer can say "this is an employee position" or "this is an independent contractor position" and only employ someone as the one or the other.
2) Whether someone is an employee or independent contractor depends on how they work, not what they--or the employer--want to call them. If the employer controls how they work (not just what they must do, but can direct or manage how they do it) and where and when the work must be done, the person is an employee, no matter what the worker or employer wants to call him. If the worker could work on his/her own hours, mostly at whatever location he/she wants, and the employer doesn't tell him how to do his/her job, he could be an independent contractor because he/she meets the criteria for independent contractor (he/she could also be an employee, if the *employer*--remember: employment at will--wants him/her to be).
Example: I used to work in the book publishing industry. The graphic artists who worked mostly on site, during regular business hours, who were subject to be being instructed, managed, etc. by the art director, were employees. A graphic artist who worked offsite, at his/her own home on his/her own hours, and who was given a task (e.g. design a book cover) and who turned in work product for review and approval without a manager looking over his/her shoulder, that was an independent contractor.