User registration form at a new menu path got error after submit
My mistake in my hook_menu(). The page arguments should be array('user_registration_form') and I removed the custom page callback mymodule_employee_create_form(). It did work as expected.

function mymodule_menu(){
    $items['employee/create'] = array(
        'title' =&gt; t('Create Directory'),
        'page callback' =&gt; 'drupal_get_form',
        'page arguments' =&gt; array('user_register_form'),        
        'access callback' =&gt; 'mymodule_access_directory',
        'type' =&gt; MENU_NORMAL_ITEM,
        'weight' =&gt; 0,
    );
    return $items;
}