While reporting personal income is technically your own problem, the employer is required to withhold and report income taxes on all the salaries they pay out. The company doesn't have a choice in this.
He's not only jeopardising his own tax situation but also the company's, which would probably be enough reason to fire him.
Pretending that the sovereign citizen theory was correct, he still made a contract (however contracts works for him) with a company which is operating within the government laws. It's self-contradictory.