It's a very common method to avoid all the pesky little taxes and legal liabilities that come with actually employing someone. It's also russian roulette for your company if the IRS decides your outsourcing partners are not actually real companies.

(I think the confusion is because of the term "ficticious self-employment"? I searched for a translation and that was the best I could find. I would welcome anyone to tell me what the actual colloquial term for this is)