Avoiding businesses with questionable payment practices

Two years ago I started working for a new company, as a contractor for 90 days. Boss liked my work and wanted me to work permanently. Here’s what I don’t get though- he extended my contract with no firm limit or expiration. So I was putting in hours like a permanent full time worker but getting paid like a contractor. I don’t know if this practice is popular in the US.

Later on (like 10 months ago), due to budget problems my hours started getting cut, so now I was at 30 hours a week. But my payroll checks stopped, and instead my boss switched to using PayPal. This was most frustrating because usually I wouldn’t get paid on the dot and it takes at least 3 business days to withdraw your money to my bank account, and the 3% transaction fee. It was like getting taxed but without getting any benefits.

I no longer work there, but I would like to know if that practice is common by small companies where budget is everything and whether it is completely legal. And most importantly, how do I avoid joining these kinds of businesses in the future? Any warning signs to spot these sort of practices before I decide to work for them?

Can’t nobody take advantage of you without your permission.
Always having walk-a-way power is important.
If you don’t then you are theirs and they can abuse you at will.
“Any warning signs to spot these sort of practices before I decide to work for them?”
Sometimes you won’t know until you dive in, the question is when you realize what they are about, how will you handle it? If they need you worse than you need them, then you are in the driving seat. If not they hold all the cards…