People get caught all the time.

When employees discover they can't rent an apartment or get a car loan because they have no documented income, they'll come to Reddit and ask what to do. People can be very helpful here...lol.

In addition to not having documented income, your employee won't be earning any social security credits (unless they are legit self-employed and pay the required taxes) and won't be able to contribute to an IRA (unless they have other earned income they pay tax on).

P.S. The employer share of social security and medicare tax is 7.65%, not 15.3%.