If the government doesn't protect people against immoral companies, who will? If an employee doesn't understand their obligations to pay extra taxes and cover their own forms of insurance, and doesn't ask for enough money up front to cover those costs, they'll go to jail and/or be bankrupt. That creates costs for taxpayers and corporations, the net loss likely higher than the cost of a bit of regulation and education.

Why not educate those employees (or ensure that they can't get stiffed for a lack of education) instead of allowing them to be funneled (or scammed) into an unproductive dead end? As a taxpayer, I'd rather see them protected and productive than unproductive and bankrupt.