It all depends on the nature of the consultancy agreement. If you work for the financial industry as a consultant you can expect to allow monitoring.

I don't know of a single place that makes the law clear, but if you dig in a bit, you can find a lot of resources that describe the legal differences between contractors and employees. One thing that's evident in nearly anything you can find is that contractors basically have no protections.

So if you think about this way, where federal, state or local laws might protect against things like unreasonable surveillance of an employee, very few, if any, protections are in place for contractors.

The IRS doesn't care in the slightest if an employer monitors a contractor.