And the minute the employer fires this guy, if he is pissy enough about it he reports said employee to the city for no business license (assumption but if the shoe fits, wear it), then to perhaps the State for not collecting taxes....
So the keep quite about it only works as long as nobody ever has a problem and comes into your work or they talk to someone and they come to see you at work. Both things are totally beyond your control.... is losing your job with the economy the way it is right now worth it? Can you make the same amount of $ or more by building your own boxes?
The best option is to approach the employer on it and broker some kind of deal. Anything that you do outside of the store is done on their dime, they pay for all materials, they pay you for time (at a rate better than what they pay you at the store), they pay for the use of tools and power, they are responsible for the tax (that you must collect).
Business is business, at least this way you are still employed and able to continue on and build your empire up until one day you want to go your own.