I'm On The Payroll Of The Family Business I Don't Work For - What Are The Implications?

I'm in the US, Ohio.

My grandmother has me on the payroll of her company. The only time I receive anything from this is at Christmas, when she gives me a check for several thousand dollars (this time it was 7,000). The check lists various tax expenses and a "Net Pay" of $7,000.

I asked my mother about this (who helps out at the company in some capacity) and she told me I would get a W2 in the future.

What are the implications of this legally? Do I need to report this as income on my 1040 at the end of the year? If so, does it sum with my "real" job's income or go in some separate category? Legally speaking, would I be considered as working for multiple companies? Does this open me up to legal ambiguities or assertions of unlawful behavior?

For what it's worth, I'm considering refusing the gift and asking her to remove me from the company payroll but I want to be aware of the implications of all of this before causing family drama.

Edit: Thank you for all of the responses! She does own the company. It's good to hear there aren't legal concerns (as long as the W2 doesn't say $50K????).