Bear in mind that the US (IRS) requirements for independent contractors are not really relevant here. The Canadian legislation is what counts. Citizens are classified based on the legislation of the country in which they are working.
(1) Beware of misclassification if hiring someone full time as a contractor in Canada. In this case the fact that the employee is planning to pick up a side gig is a good indicator they are a genuine contractor instead of a disguised employee. Similarly it helps if the worker provides their own equipment and has responsibility for their own working hours.
(2) Do not offer health and other benefits directly or via an allowance as this is the act of an employer.
(3) Instead build them into the total salary e.g. increase salary by 5k.
Lastly if engaging as a contractor make sure it is for a fixed term (e.g. 6-12 months). Towards the end of the contract initial duration both parties can assess whether the setup still works or whether an employed solution might be more appropriate.
If you have a disability, then the right to work remotely is covered as an accommodation under the Americans with Disabilities Act (ADA). Otherwise it really depends on the employer and manager.
Those companies may feel they have access to enough talent in the USA. They may have restrictions with data protection or security. They may be worried about timezones or communication. Or they may be worried about complying with foreign employment and tax regulations.
You can be employed through a third party deployment company (ArbeitnehmerÜberlassungsGesetz) for up to eighteen months. Such companies (known in other countries as Employer of Record / GEO / PEO / Umbrella companies) have an AÜG license.
We offer this to our clients in Germany. After eighteen months your company could setup (in order of complexity) a representative office, branch or subsidiary. Or you could pursue one of the self employed models.
In the USA the Department of OHSA specifically says that it (and the employer) don't bear responsibility for a home based work site. They won't do site inspections and the best they can do is give tips to the worker and have the worker complete a self-assessment. Overseas this is viewed very differently. e.g. in Australia and UK the employer is responsible for worker safety even if they are working from home.
"OSHA will not conduct inspections of employees' home offices.
OSHA will not hold employers liable for employees' home offices, and does not expect employers to inspect the home offices of their employees.
If OSHA receives a complaint about a home office, the complainant will be advised of OSHA's policy. If an employee makes a specific request, OSHA may informally let employers know of complaints about home office conditions, but will not follow-up with the employer or employee."
