This is a simple solution to the problem. Paying someone for an hour or two is absolutely nothing for a healthy company.

So if the company wants to have you write code to prove your mettle, have them pay you for the time.

Except you cannot do that in every country. You know, Labour right.

Well, in case labour laws prevent people being paid for some labour -- or if the applicant needs to be registered as an independent contractor in order to receive payment for the work -- can't the company just pay for the expenses (and a little extra) and thus compensate the applicant sufficiently? It should be possible to pay for travel, stay, lunch or other 'inconveniences' in case the labour/deliverables can't be paid for directly, right?

I'm not sure I understand. Care to elaborate? Pointers?

In my country the potential employee would have to be registered as an independent contractor before being able to charge for the provided service. And then if he wanted to become a full time employee he'd have to unregister as a contractor.

Yes. In some countries, laws are strongly in favor of employee protection (for a good reason).

That's the case here. One employer could severely abuse paying candidates for some quick job without any contract being even mentioned between the 2.

This rules out all manner of great employees. Basically all of them that have a job currently and have read their employment agreement.

In most places it is standard boilerplate that your employer gets approval rights on any outside work you do while employed by them. Current employees also have more restricted IP agreements typically which can put the contracting company in legal trouble as well.

For this reason, I've found paid real work projects problematic in that it biases against the currently employed.

Seems like the obvious solution. I know Automattic (makers of Wordpress, among other things) does that.