You are essentially a contractor, so they pretty much have the right to tell you what to do and how to do it if you want to keep the contracted job with them, with a few exceptions. However, if the company wants you to submit reports, then that's a term of the job and thus you must.
I've been an entrepreneur most of my life, and have started and sold several businesses (and reluctantly shut down a few, too
). Presently I own a consulting firm in Nashville and we have both 1099 contractors and W-2 employees. But I am not an attorney, nor do I know the employment laws of the state of California. So if you have concerns, I'd recommend contacting your state's employee resource department -
http://www.edd.ca.gov. If you openly and honestly explain your predicament, they can tell you what is and what is not within the legal limits in your state.