Jurisdiction issues are also probably a big factor.
If you have employees in N jurisdictions you potentially have to deal with N different sets of laws and regulations concerning income taxes, unemployment insurance taxes, health insurance, employment contracts, layoffs, maternity/paternity leave, unions, and probably many I've overlooked.
Remote employees in the same city? Trivial.
Different cities in the same county? Possibly slightly more work.
Different counties in the state? Maybe a slight step up in work.
Different states in the same country? Could be a big step up in work.
Different countries? Likely much more work than for employees in your country. With employees in different states in your own country things will work similarly. The bureaucracy you have to deal with for an employee in Florida and for an employee in Washington, for example, will be fairly similar, and much more similar to each other than they are to the bureaucracy you'll be dealing with for your employee in say Germany.
I think most of the companies (most likely including Automattic) are not doing it like that for remote employees from other countries. They are just "hiring" them as contractors, that is formally it's just B2B, the employee would register some kind of individual business entity in their country, send invoices, pay taxes. The contract may include things like vacations, sick days, (home office) equipment compensation, N months notice/severance pay, but it has no connection to the laws for normal employees in that country.
I think doing it differently would not be practical, because the company would have to maintain some kind of companies/offices in each country. Another option can be hiring the employee directly at the main company (not sure about US, but I am pretty sure it's possible at least for some countries in Europe), but it's also more complex and I am not sure if this would even make sense for the employee since e.g. they would not be able to access the benefits like healthcare remotely. And as long as the contract is good and the company is trustworthy, being a contractor/self-employed may have some advantages like lower taxes.
