The contractor (or employee) would negotiate the appropriate contract with the customer (or employer). Typically these days such contracts specify that all pay

The contractor (or employee) would negotiate the appropriate contract with the customer (or employer). Typically these days such contracts specify that all payments will be made in an instrument such as USD or EUR, but the contract could just as easily specify BTC. Alternatively, the contract could specify that payments will be made in BTC, but the payment amount will depend on an exchange rate with some other instrument such as USD or EUR. In that case the customer is merely providing the exchange function as part of the contract.