Our last hires were brought in for a two-part interview, on the same day. The first was an interview to ensure the personality fit was there, to ensure that the differences we all bring to the table could be a strength.
The candidates were then given a running API server, a postman collection, swagger docs, and an empty directory. We asked them to solve a specific problem - one that we already showed the candidate is solved in production, one we make clear cannot be solved in the two hours they're given. Then, the candidate is encouraged to work on the problem, and ask questions.
Multiple team members check in on the candidate throughout the period, in order to offer support, suggestions, pick things apart, and be a sounding board. Then, when things are done we sit down as a minimum of three people (candidate + 2 staff) to discuss the output and outcome.
This isn't the most fair, and can definitely be stressful. At the same time, I feel like it's pretty equitable.