I've seen people kept around for that exact reason in govt contracting. For example, one employee never pulled her weight, and managers always wanted to fire her, but she was a black senior citizen. Since she allowed them to check off 3 diversity boxes when bidding for govt contracts, the company wouldn't let anyone fire her, so she kept getting promoted because that was the only way the managers could get her off their team.
In the trades it's common to have a personal LLC so you can expense your work truck, your lunch, etc and to have your wife own the LLC so you can have a woman owned business (which makes you a more attractive sub for government jobs)