At what point does "I will perform this task for compensation in the amount of $X" become illegal?

First a nitpick, a contract doesn't 'become illegal', it is and always was not binding.

Just some easy examples that aren't 'not meeting the requirements for being a independent contractor'.

* When any part of completing 'this task' requires you to break the law in order to perform it.

* When 'this task' classifies you as an employee of the payer and the compensation is under the minimum wage.

* When 'this task' is indentured servitude or slavery.

* When 'this task' requires bodily harm or injury. (e.g. You can't sell your kidney)

* When 'this task' requires a license which you don't have.

* When either party is not of sound mind or not capable of consenting to a contract (e.g. if you're drugged, drunk, too young, or mentally unfit).

Of all those you mentioned, this is the only one that applies:

* When 'this task' classifies you as an employee of the payer and the compensation is under the minimum wage.

That part right there is the problem and is why the entire issue is ridiculous. Every contract programmer should be an employee of the company that they are contracting for. Staffing firms should virtually be out of business. The only thing that minimum wage laws do for society is widen the divide between "Volunteer" and "Paid" because everything in the middle is deemed illegal for reasons that provide no discernible benefit to society while decreasing available jobs and encouraging companies to simply go to countries where they don't have to deal with:

"Well, I can afford to pay you $10 / hour for this job and I realize that you want to take this job for $10 / hour because would be very beneficial to you right now but unfortunately the state says that's not enough so I'm going to have to hire somebody in China for $10 / hour instead. Hopefully the welfare or unemployment office can help you out. As you are aware, the state knows what's best for two people to decide is agreeable."

It has always been illegal if an employer tells you you're an independent contractor but without meeting the requirements of an independent contractor relationship.

Last time someone ignored that, it cost them $240 million. I'm interested to see how much it costs Uber.

http://www.reuters.com/article/us-fedex-settlement-idUSKCN0Z...

So what's the difference between that and using a personal LLC. It's legal nitpicking about a persons choice.

> It's legal nitpicking about a persons choice.

That's actually what the law is: interpretation of statute, or what you call "nitpicking".

So to be clear, allowing 1,000,000 individuals with personal LLC's to sign up as Uber contractors via their LLC's is totally cool.

Having 1,000,000 individual sign up DIRECTLY as Uber contractors...totally illegal.

No. Again, its not the corporate structure that dictates classification, its the relationship.

https://www.irs.gov/businesses/small-businesses-self-employe...

When it's illegal. There's no underlying abstraction. The law is ad hoc.