This is a structural practice our government tends to favor. They can regulate larger actors and keep them in line more easily in order to limit the options for misbehavior downstream.

To employ in the U.S., you have to report what you paid people to the tax authorities. The employer can employ and do commerce on condition of compliance and the good grace of government recognition. Individuals, in the end can do whatever they want as long as the paper trail is managed by the economic machine.