re: What would you expect from your employer in this situation?

Three pages to get to the correct answer. And LoL at the people who advised to make a secret deal with the contractor and collect payments on the down low. This isn’t a crack deal in an alley. Contractor isn’t going to risk their deal with the company to back door pay an employee. They are going to report him the second he suggest it and the dude will he out on the street.