What he wants and what is legal can be very different things ... if you will be doing the exact same job then that would not be allowed. https://www.irs.gov/taxtopics/tc762
If you were to allow it you would have to pay the FICA taxes that he would pay, lose any health insurance or paid time off/vacation and any workman's compensation insurance. It would require a pay increase of at least 30% to make up for what you would lose which I doubt they will be willing to pay.
