If associating with them is against the law then maybe the
Laws of the Valstiir Enclave should be updated and clarified to reflect this.
Right now the only thing mentioned that might be relevant to this is, as far as I could tell, that aiding the enemies of the empire is treason. Are monsters the enemies of the empire in this regard? I wouldn't say so.
The only mention of monsters in these laws is that they're a
blight on the enclave and that killing them is rewarded but this doesn't really designate them specifically as enemies of the enclave/empire. Only that assaulting and murdering them is generally speaking okay. There's no differentiation between various blights here (other than half-orcs who are mentioned as adventurers providing free service to the empire) so pretty reasonable to assume all monsters are treated equally under these laws.
Considering how the server has things set up regarding monsters however such as that the Shelf on the Valstiir enclave itself hasn't been (or isn't in the process of being) scoured clean of the monsters living and trading there, the boat captain ferrying people back and forth from Sullivan's Trading Post like it's no problem and some of the work order dudes being monsters that give away their location (out in the wilderness where they can be freely murdered by anyone), it seems to me that monsters aren't really a big deal unless they're actively causing trouble and so that hiring them as mercenaries shouldn't be a big deal so long as it doesn't cause trouble.
If it is a big deal after all then maybe these things should be changed to better reflect that. I think it's perfectly reasonable though that people who hire and trust monster mercenaries not to betray and eat them be probably considered completely mad by most but it's not like monsters can't become reputable, like Shark's lizardfolk fellow.