Is this problem an issue for both people who come here legally and illegally?
It appears to be a problem for anyone who is poor and desparate for money.
When I was in a 'wraps' business (northern US) a few years back, I was visiting an office. I noticed a colorful poster on the wall. Probably printed decades before, it was advertising a minimum-wage rate (~$3.75?) which was half the legal rate (at that time).
Can't help but imagine this tactic is widely-used. Don't imagine that anyone who badly needs the money would ask questions.