I am currently a contract (1099) employee. After 90 days I had the option of converting to a regular employee status (W2). I did not convert to W2 status. Inadvertently, I was treated as an employee and given time off with pay. Having realized that an error was made in granting the paid time off, the company now refuses to grant me additional time off with pay because it violates company policy. Can they do this given the precedence has already been established? Where can I find legal rulings and/or definitions on this issue?

If you remain a 1099 status employee as it appears... you aren't entitled to any paid time off... its rare if they get any paid leave at all.

Just because they made one mistake doesn't establish any precident that you get the same thing forever. Or more that was ever agreed to.

If you push them on this you might find you won't have any employment status with them at all at the earliest time they could terminate it..

In fact is you was granted something you weren' entitled to or earned accidentally... they would be within their rights to recover that by any legal means.

Actually, you should be happy they don't ask you for a refund of the paid time off.

Just because they made a mistake, doesn't mean they have to continue the mistake once detected. Nor does it mean they have to swallow the mistake either.

Making a mistake does not necessarily set a precedence as you seem to believe. If they continued to provide paid time off after the mistake was noted, that might set a precedence, but that doesn't seem to be the case.

Bottom line here is you have no right to paid time off since you opted to remain as a contract employee. And that means they could require you to reimburse them for the paid time off you received. They can't, however, deduct that paid time off from your contract rate without your permission. They could sue you for return of that value.