It is legal because all Vector "Marketing" employees are outside contractors that are primarily commission based. If you do a demo at someone's house, I believe they pay you $16, no matter if you make the sell or not.
However, if round trip travel time is an hour, and the demo is another hour, your $16 turns into a measly $8. From then, if you also factor in gas money and general depreciation on your car from use...you are making even less than $8/hr.
On the flip side, if you do sell a knife set, you do make good money as commission is 30-50% (depending on your selling volume) of the selling price of the knife set. The knife sets are expensive too (usually $600+), but then why would someone spend $600 on cutcos when you can buy real knives like Henckels, W?STHOFs, Global, or Shuns for about the same price. So the only people you can really sell to are homemakers that do not have good knowledge of kitchen knives with $600-$100 to spend. That being said, I have heard stories of people selling well, but that is 1 success story out of hundreds of bad ones.
I personally have never worked there (why the hell would you?) but like any business student, I keep informed of opportunities everywhere. The hilarious thing is that they hang fliers in my business school (without permission) saying that they will pay up to $16/hr, luring unsuspecting, broke, college students. Luckily, professors always pull down these fliers as soon as they are put up.