I think this is a US specific thing.

I work as a contractors with all my clients (who know of each others) and they all pay significantly more per hour compared to an employee. As an employee I could expect to make 1/4 of what I actually make.

The only exception in this arrangement was when I worked with an US company, they wanted to hire me as an employee and paid 1k per month to some company in my country just to hire me. An insane waste of money, not to mention taxes on my side.