"Contractor" in tech means, "we want you as an employee but we're too cheap to obey the laws involved or make a commitment, so here's a 3 year contract, hope this never goes to court!". Frankly, it's a way for companies to avoid the law, though California at least has recently made this an illegal sort of arrangement via new work rules.
If he missed out on pay then it's because no one cared enough/someone didn't care enough to sort it out.