I do not pretend for a moment to be the attorney here, but it is my understanding that members of LLC, unless that LLC has made an 8832 election, are mandatorily considered self-employed and must make quarterly SEP payments, and that they cannot be employed as W-2 because, as a creature of state statute, the LLC is not held at the federal level (for tax purposes) to be a distinct entity apart from its members.
This is false in at least the commonly understood case, you can elect to be treated like an S-Corp under an LLC and receive a salary and keep your SEP-IRA among other things.
The obligation to be 1099 is the default case for single-proprietor LLCs but can be overcome as I described above. It is not necessarily the case for multiple-member LLCs.
FYI:
I am not a lawyer, but I have done all this before.
