Why do you not want to be an employee?

Just FYI they may not have a choice either. If someone is a contractor for too long, under US law they can become considered an employee and legally require benefits. The fact it's international probably makes it more complicated, but they likely wish to avoid problems there. It's why many US companies that hire large amounts of contractors (like Microsoft) only let them work X months in a row for them before they have to leave for Y months.

What does your contract say about termination? Since you're a contractor, you have a mutually agreed contract, right?

Who's forcing you? Take it or leave it.

"You can be let go at any point subject to the conditions in the temporary contract you agreed" is literally the entire deal of contracting why would you ever think that they couldn't end your contract in the agreed manner.

Indeed - the contractor tradeoff is more money for less rights.

They are not you employer, they are your customer and they don't "force" you to do anything.

"Can they terminate me for this or will I be laid off?" - How can you be laid off or terminated if you're not an employee? You do understand that you're not an employee right now, but a business providing a service to another business?

If the company is not going to employ contractors and you don't agree to be an employee, you won't be working there.

Where you currently live and work for the company is not included in the post. American employers are internationally renowned for "at will" employment and paltry annual leave entitlements. If you work in Canada you may be covered by provincial and terratorial employment standards. I am not a lawyer but if you consider becoming an employee, find out exactly what you are legally entitled to before negotiating or signing up.

US businesses are pretty bad about misclassifying workers as contractors instead of employees. They may be under pressure to fix that problem under penalty of lawsuit. From my perspective of having many contracts simply end, you should be glad they want to convert you. It means they value you when so many other companies are downsizing, at least in the IT sector. I'd much rather be in your situation than my current one.

@DJClayworth One obvious reason is that OP as a contract may have plenty of other customers, when becoming an employee he may not have the same freedom because 1) he will not choose their own working schedule and 2) the employment contract may explicitly ban OP from taking other side jobs.

@Bakuriu I'm aware that there are lots of possible reasons, but I want to know what the OP's actual reasons are. It affects the advice to give him/her.

@Greendrake "Do X or we'll impose Y consequences" is what it means to force someone to do X

@AmagicalFishy Given that the company is always within its right to impose the Y consequences (i.e. it always can refuse to extend the contract anyway, without offering anything), I don't think it constitutes force. The contractor should not have any expectation that the contract will be extended indefinitely.

@AmagicalFishy By that logic, walking into my local supermarket and telling them "give me a 90% discount, or I will buy my groceries elsewhere" would count as forcing the supermarket to give me that discount. There is a difference between transactions both sides need to agree on to make them happen on the one hand, and the threat of active harm to compel someone to do something on the other hand.

@Greendrake i don't believe whether or not something is considered force is determined by whether or not a company has a legal right to do something. companies quite often have the "legal right" to force people to do things

@AmagicalFishy Force is the opposite to freedom. Ever heard of freedom of contract?