In order to specify "W2 Only" or to remove this restriction, go to the Settings menu and select Bookings Settings. From this page, select Hourly Rate. The Hourly Rate popup has a checkbox that allows you to specify "W2 Only" or not.

Note that if you or the office specifies “W2 Only”, then the payment terms of the booking will be W2 even if the other party has indicated something else.