In certain Latin American countries if 90+ Oct of your revenue comes from a single client, the tax office determines that this client is de facto your employer and you become entitled to severance and other perks when you leave or contract is ended.
But I don't want severance and other perks. I just want money so I can save up my own buffer and buy my own perks.
I think it's very good that the tax service is looking out for underpaid freelancers struggling on the edge of poverty (or often below it), but highly paid software engineers can take care of themselves. If my current client wants to end our contract tomorrow, I'm fine with that. That's why he's hiring me, and not an employee. And that's why he's paying me as much as he is.
I'm all for drawing a line somewhere based on hourly rate. Below $50/h (or wherever you want to draw that line), you may be entitled to employee benefits, above that line, you're on your own, because you can take care of yourself.
I don't think the pay rate really matters, and you could always decline it. I think this is more meant to safely allow someone to put most of their eggs in one basket - generally that's a risky move and the client could simply refuse to pay and put you out of business, but as a client there's a lot of value in being the main priority
