Legal Question in Construction Law in Washington

Im not getting paid for the employer for the work that i have done

I was told by the employer without any written notice that im not getting paid becouse he was penalized by the safety inspector for the amount of 7000.00$ for wilful and repeat serious violation of safety and poor management of requaried paperwork and i was involved too becouse i was working above 10feet without harness ,i did but it was the first time and i should get just a warning or a small charge but he said that im responsible for the entire amount..im licensed bonded insured..at the end of the year we are getting form 1099 and do our own taxes,but we do not have any written contracts and i called department of labor and industries and they said it looks like im an employee and should get a W-2 form,i stopped work and told him that im going to report a contractor fraud and he replied that i can pay just 4 grands instead of 7...He is just holding the pay check and it is not legal without any written notice.the home builder that my employer work for got a ticket too and he said that im responsible for it too..sounds stupid but its what he told me..please help with any advise where i can start the process of returning money.or report that..your suggestions would be greatly appreciated.thank you

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