your formal employer violate the H1-B term. You should negociate with your formal employer with lower wage to exchange for W-2. for the excusing the responsiblity of the violation, you should produce some kind of documenation to relieve your responsiblity such as writting a letter to your formal employer that you do not agree that. If you accept second employer 1099 payment without new petition, you violate immigration law.
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