In some states, even one remote employee gives the company nexus for corporate income tax in the employee's state. The employer might be trying to avoid that, or maybe just trying to avoid having to manage withholding and payroll taxes in a new state for just one employee. If that's the issue, maybe 1099-NEC is the way to go. I don't think using a contractor in another state would create nexus for the company, and they certainly wouldn't have to deal with payroll issues.
The OP talked about using "a friends address in another state." It's not clear that "another" state means the state that the employer is located in. It could be a third state. So again @stompin699, we really need to know what states are involved.
What state do you live in?
What state would you be working in?
What state is the company located in?
What state is your friend's address in?
