Indeed, it's well established now days that for purposes other than semantics employees and contractors are one in the same. You can't legally screw your workers by labeling them contractors these days. I know for sure that's the deal in FL. I assumed it was a federal thing but I could be wrong.
I'm having trouble parsing what you wrote here. Employees and contractors are very different, not one and the same. It was never legal to screw your employees by labeling them contractors, but it has always been (and remains) common, both to do it and to get away with it. In fairness, many employers are genuinely ignorant of the difference and are not deliberately trying to screw anyone, but that doesn't mean they won't get in a lot of trouble if they get caught.
I took a night diver course in what might possibly have been a legitimate contractor-instructor situation. I don't know if my instructor was even classified by the shop as a contractor vs. an employee; I didn't bother to ask. But it occurred to me as I was reading this discussion that he might have been, and that could have been legal. What I saw on my end was this: a local dive shop advertised several courses on their website, but only had the schedules posted for OW, not for any specialties. So I called the shop and told them what I was interested in, and they took down my info and told me one of their instructors would call me back. Later that day I got a call from an instructor on his personal cell. We discussed what I was looking to get out of the course, and I believe it was he who quoted me the price. He then directed me to his website to pick some dates from what he had available. He also chose the sites at which we would do the course dives, with some input from me. (I was the only student in this class.)
I did go to the shop to pick up the book and DVD, and also some lights. But I had no further interactions with them after that. I met my instructor at the first dive site to review the book work before gearing up. After getting out of our gear following the third and final dive, he gave me the temporary cert card and we finished the paperwork, and then the permanent cert card was mailed to me. I also asked him if he'd allow a friend of mine to join us on the third dive; the friend was an OW diver but had never done night diving before. He agreed, saying he usually charged a fee for that but he'd waive it. (I gave him a tip at the end that was well in excess of the fee he waived, FWIW.) At no point did either of us consult the shop about this special arrangement.
This story features the hallmarks of a legitimate contractor relationship between the instructor and the dive shop. The instructor chose his schedule, his rate of pay, and pretty much all the details of how the job was to be done other than those dictated by PADI or requested by me. The shop seems to have merely facilitated the transaction by vetting him, fielding my call, putting us in touch, and letting me pick up the materials there. Had they instead given me the schedule with dates, locations, and prices, and told him he had to be there, he would have been an employee no matter what they called him.